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China to maintain 3 major airlines - report

Beijing (XFN-ASIA) - China believes the current setup of three

major airlines is "fine" given the current state of the industry,

the Wall Street Journal reported, citing the aviation regulator.

"We believe it would be fine to maintain three major carriers based on the situation of the airline industry," said Yang Yuanyuan, minister of the General Administration of Civil Aviation of China, on the sidelines of the 17th Communist Party Congress.

The remarks come amid speculation of M&A activity among the big three - Air China, China Southern Airlines and China Eastern Airlines. The three major airline groups were formed from a restructuring of state-owned carriers in 2002.

In September China National Aviation Holding Co, which controls Air China, cancelled a joint bid with Cathay Pacific Airways Ltd to take a stake in China Eastern Airlines.