Since Hong Kong's Cathay Pacific Airways proclaimed its intentions to temporarily give up speculation together with Air China, the mainland's flagship carrier, to acquire China Eastern Airlines at the end of Sept., many reports have been released about Air China's other acquisitions. On Oct. 12, a news report quoted sources from the Center for Asian Pacific Aviation (CAPA) as saying that Cathay Pacific Airways is viewing Shenzhen Airlines as a potential speculation target.

 

The news report presented several reasons for the possible acquisition by Cathay Pacific: Firstly, the Chief Executive of Hong Kong Special Administrative Region, Donald Tsang, announced recently a series of measures aimed at closing the ties between HK and the Pearl River Delta, an area of 11,000 sq km that includes several thriving cities in Guangdong Province. These measures would help boost the air transportation in the Pan-Pearl River Delta; secondly, Cathay Pacific experienced a setback when buying a stake in China Eastern Airlines; thirdly, Cathay Pacific and Air China have cross-shareholdings, and meanwhile, Air China holds 25 percent share of Shenzhen Airlines. Finally, a railway line is expected to be built to link the two airports of Shenzhen and HK, causing exchanges between the two cities to become rather busier.

 

The Shanghai-based China Business News tried to confirm the news with Li Kun, president and vice chairman of the board of Shenzhen Airlines yesterday. He remained noncommittal and said that he hadn't heard anything. The newspaper then contacted Cathy Pacific for a response, but nobody answered the phone.

 

For more details, please read the full story in Chinese ( http://www.china-cbn.com/s/n/000004/20071017/020000057745.shtml).

 

(China.org.cn October 17, 2007)