Air China's parent company has bid for a stake in rival China Eastern Airlines after Singapore Airlines HK$3.80 (49 US cents) a share offer was rejected.
China National Aviation Holding Co proposed to become "alliance partners" with China Eastern, China National Aviation said yesterday. Details of the offer will be announced on January 22.
Air China, the world's largest airline by market value, and affiliate Cathay Pacific Airways, are seeking a tie-up with Shanghai-based China Eastern to dominate the world's second-largest aviation market.
China National Aviation had indicated it will offer at least HK$5 a share, after minority shareholders rejected Singapore Air's bid.
"I see greater possibility for China National Aviation to win the bid," Li Lei, an analyst at China Securities, told Bloomberg News yesterday in Beijing.
"I don't think Singapore Airlines can work out a counter-bid in such short time, given the approval procedures from shareholders and Chinese industry regulators."
China Eastern spokesman Luo Zhuping wasn't immediately available yesterday for comment.
China National Aviation said on January 6 that it may seek to buy as much as 30 percent of China Eastern.
The company may also propose a cargo venture between the two carriers and Hong Kong-based Cathay Pacific, people familiar with the negotiations said on January 11.
Chinese carriers have a 44-percent share of the nation's international passenger market and less than 20 percent of its international cargo market.
(Shanghai Daily January 20, 2008)
