[photopress:air_shanghai_airport2.JPG,full,alignright]Air China may seek other allies to exploit Shanghai as an international hub if its preferred partner, China Eastern Airlines, won’t sell a stake to Air China’s parent. And China Eastern has said loud and clear that it does not want to
The suggestion is that Air China would consider tying up with China Eastern’s hometown rival, Shanghai Airlines, or Hong Kong-based Cathay Pacific Airways, with which Air China has significant cross-shareholdings.
Kong Dong, the company’s acting chairman, said Air China plans to set up a subsidiary airline in Shanghai, China’s commercial center and part of the airport shown in our illustration, whether or not it finds a partner.
That is the key to the whole situation. China Airlines is strong in Beijing. But it is not strong in Shanghai where China Eastern rules the roost.
Yet Air China is the strongest and most profitable of China’s airlines and dreams of becoming a national supercarrier. To do this it need Shanghai.
If it gets Shanghai, no matter by what means, then China Eastern is dimished and the China airline scene becomes one monster – Air China – and a lot of satrapies, China Eastern, China Southern Airlines and others.
Air China’s parent, China National Aviation (CNAC), won’t reduce its offer price for up to 30% of China Eastern, even after a recent slide in the Shanghai carrier’s share price. Kong Dong states he will stick with the earlier offer
Which leaves Singapore Airlines – and its parent company, Temasek Holdings – out in the cold.
But, if Air China gets its way, it dominates China aviation and this may not be the best event ever for the traveller. What China needs, perhaps more than anything, is serious competition among the interior airlines to raise the standard of service. Especially if there is any serious hope of competing internationally for non-Chinese passengers.
Source: CargoNews Asia