The limit on foreign ownership of Chinese airlines is being raised from 35 to 49 per cent of the company, said a senior official of the Civil Aviation Authority of China. However, the holding of any single foreign investor is still limited to 25 per cent. The new rules, which take effect on August 1, subject to the State Council's approval, also remove the requirement for senior managers in jointly invested airlines to be appointed by the Chinese side, allowing foreigners to serve as presidents and general managers of Chinese airlines.
Swift deals are unlikely, South China Morning Post said, although both Singapore Airlines and Cathay Pacific have said they are interested in forming partnerships in China. China's airlines are in the process of a restructuring that will reduce their numbers from 11 to three. Until that process is complete, potential foreign investors would lack audited financial information on which investment decisions could be based, according to HSBC Securities analyst Mark Webb.
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