[photopress:air_Li_Jiaxing_new_chairman.jpg,full,alignright]Air China chairman Li Jiaxiang has been appoined chief of China’s civil aviation regulator. This raises some interesting fresh questions about the outcome of a planned linkup between Singapore Airlines and China Eastern Airlines.
Air China has expressed opposition to the deal and its parent will be among the minority shareholders in China Eastern that will vote on the tie-up January 8.
Li Jiaxiang will replace Yang Yuanyuan as the minister of the General Administration of Civil Aviation of China, CAAC. An official at CAAC declined to comment and it was unclear whether Li would assume his new role before the vote by China Eastern’s minority shareholders on the deal with Singapore Airlines.
Air China said Li Jiaxiang will step down as chairman of Air China and as president of its state-owned parent, China National Aviation Holding. It just did not say precisely when this will happen.
This may mean that the SIA/China Eastern Airlines may be voted down.
China Eastern plans to sell a combined 24% stake to Singapore Airlines and its parent, Temasek Holdings, for US$923 million.
Air China has said its parent, CNAHC, which holds a 12.07% stake in China Eastern’s Hong Kong-traded shares, may vote against the deal.
A partnership between China Eastern and Singapore Airlines could pose a major competitive threat and thwart CNAHC’s ambitions of having a significant presence in Shanghai, the booming financial center that is China Eastern’s hub and home base.
Air China’s operations are concentrated around its hub and home base in the capital Beijing.
China Eastern has said the Singapore Air deal is supported by China’s State Council and other government departments. As such, it said it doesn’t expect CNAHC to launch a counterbid for the stake.
Source: CargoNews Asia
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