its "neutral" rating on Air China in the expectation that the carrier
will be the biggest beneficiary of consolidation in the Chinese aviation sector.
But Goldman Sachs said China Eastern appears reluctant to work with CNAC, which would also need approval from various regulatory bodies to make a counter-bid.
"We believe China Eastern is reluctant to work with CNAC, it is not clear to us why it would agree to issue new shares to CNAC," it said.
But further consolidation within China seems increasingly likely, particularly given Li Jiaxing's appointment as head of the country's aviation regulator.
Li has said that domestic airlines should merge and consolidate further.
"We believe Air China could be the biggest beneficiaries under this scenario," Goldman Sachs said.
It added that Air China's strategic investor, Cathay Pacific, could be asked to join CNAC's bid for China Eastern.
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