This is from the SCMP.
Monday, June 11, 2001
China Eastern purchase gets airline consolidation off ground
REUTERS in Shanghai and STAFF REPORTER
China Eastern Airlines has acquired Great Wall Airlines in the first merger since industry regulators announced plans in April to merge 10 airlines under their jurisdiction. Great Wall Airlines, based in the eastern Zhejiang province, became the Ningbo Office of China Eastern Airlines at the weekend, Liberation Daily said.
China Eastern will pay 30 million yuan (about HK$28.1 million) per year for an unspecified number of years for the acquisition under an agreement signed on May 24. The Shanghai Morning Post said China Eastern would pay a total of 428 million yuan.
Industry regulator the Civil Aviation Administration of China (CAAC) announced on April 27 plans to merge 10 companies into three groups under China Eastern, China Southern Airlines and unlisted China Air in an effort to produce competitive airlines.
Company officials were not available for comment.
"This is the first actual re-organisation after the CAAC announced the merger plans," the Liberation Daily said.
According to the CAAC plans, Shanghai-based China Eastern also will be merged with China Northwest and Yunnan airlines. China Eastern is a national carrier with a dual listing in Hong Kong and the United States.
The company's marketing director Gao Pei said earlier the merger process could take 18 months and his merged group would have 180 to 200 passenger planes by 2005 compared with 118 at the present.
China Eastern has plans to buy 15 aircraft from Bombardier, 10 from Boeing and five from Airbus. The company is waiting for approval from the mainland's regulatory body.
China Eastern now has 64 passenger planes, comprising 36 Airbus planes and 28 Boeings.
It is also considering buying a 30 per cent stake in Qingdao Airport in Shandong province.
Under the CAAC plan, China Southern would tie up with Northern and Xinjiang airlines and Air China would merge with China Southwest and Zhejiang airlines. The companies have yet to announce any mergers.
Industry analysts said the mergers would take years.