Air China interested in domestic and international M&As; seeking to acquire Shenzhen Airlines

Air China Chairman, Kong Dong, stated the carrier is interested in mergers and acquisitions in domestic and international markets (Bloomberg/Reuters, 04-Mar-2010). Mr Kong added that the carrier intends to acquire Shenzhen Airlines (China's fifth largest carrier), commenting that "Shenzhen Air is very important in terms of building a strategic network". Air China has commenced an audit of Shenzhen Airlines' assets, which is expected to be completed this year. Air China, which currently has a 25% stake in Shenzhen Airlines, is seeking a hub in the Pearl River Delta to compete with Guangzhou-based China Southern Airlines. Air China also expressed concern that China Southern may seek to disrupt Air China's efforts, with Mr Kong commenting, "it's logical for China Southern to bid for Shenzhen Air". Shenzhen Airlines currently operates a fleet of more than 100 aircraft and has over 14,000 emplyees.

Air China: "We will look for acquisition opportunities abroad. But top concerns are local laws and unions, so we must be very cautious," Kong Dong, Chairman. Source: Reuters, 04-Mar-2010.