Air China Ltd's Chairman Li Jiaxiang will replace Yang Yuanyuan
as director of the China Administration of Civil Aviation, an
official at the carrier has confirmed.
"The announcement may come after the New Year's holiday," said
Huang Bin, board secretary of the country's largest carrier by
market value.
It's still unclear who will be Li's successor at Air China and
the appointment is pending approval at a shareholders' meeting,
Huang said.
Well-informed sources said Kong Dong, vice chairman of the
carrier, will be the new head. Li, 59, joined the Beijing-based
carrier in 2000 as the Party secretary and was appointed as the
chairman in 2002.
However, the appointment may impact the government-backed deal
between China Eastern Airlines and Singapore Airlines as Li planned
to merge major domestic airlines to build Air China into a super
carrier.
"After Li takes office, the government's support for the
Singapore deal will be weakened, which will affect the
shareholders' decision," said Li Lei, an analyst at China
Securities Co.
"The minority shareholders care about their own interests rather
than the cooperation. The appointment indicates that the government
is supporting Air China, so the shareholders may veto the deal at
the meeting on January 8," said Xia Fulu, an analyst at Industrial
Securities.
China Eastern and SIA signed a cooperation deal in November,
which said the Singapore carrier will pay HK$4.7 billion (US$602
million) to buy a 16-percent stake in the Shanghai-based Chinese
airline, and its parent Temasek Holdings Pte will buy an
8.3-percent stake for HK$2.5 billion at HK$3.80 a share.
(Shanghai Daily January 2, 2008)
