Source: Reuters Author: Fang Yan 07/24/2008
Subject Concerned: Government Airlines
China Eastern Airlines and its smaller rival Shanghai Airlines said on Jul. 24 that they had not discussed a possible merger, playing down a media report on a possible tie-up that had sent their shares surging.
Shanghai Airlines said in a statement to the Shanghai Stock Exchange that neither it nor its state-run parent had taken any action on a major transaction that would be related to restructuring in the country's aviation industry.
China Eastern, which has been seeking to sell a 24 percent stake to Singapore Airlines, said in a separate statement that it had not held talks on a possible tie-up with any other airlines.
Major Chinese business magazine Caijing reported on Jul. 23 that the central government and the Shanghai city government were discussing a merger of the two Shanghai-based airlines, citing a senior industry source.
It also quoted the source as saying that the two companies had not taken part in the discussions.
Shares in both airlines rose sharply after the report.