Air China fighting for China Eastern stake
Thursday, 6 December 2007:Air China has moved closer to regaining control of China Eastern from Singapore Airlines last week after acquiring another 4.28 million additional shares increasing its holding to 12.07 per cent, according to a report by the Centre for Asia Pacific Aviation.
The report stated Air China was anxious to acquire China Eastern in order to become a dominant player in the country’s aviation future, however it goes against the government’s system to build several major players which includes China Southern and Grand China Airlines.
If Air China is successful in their acquisition plans, together with its partnership in Cathay Pacific and Dragonair, it would undoubtedly become a major competitor in global aviation.
However the carrier will need another 16 per cent stock by January 2008 in order to gain voting power to block Singapore Airlines/Tamasek’s bid to purchase another 24 per cent of China Eastern.
If successful, Air China will have to still have to convince a reluctant Beijing that it should purchase China Eastern instead of Singapore.