Beijing to Lower Ownership Stakes in Chinese Airlines

The Chinese government said it will loosen its control over China’s big three carriers—China Southern Airlines, Air China and China Eastern Airlines—allowing its ownership stakes in the airlines to fall below 50%.

Currently, state-owned company China National Aviation Holding Co. holds a 53.5% stake in Air China, state-owned China Eastern Group holds a 56.4% stake in China Eastern and state-owned China Southern Group holds a 52% stake in China Southern.

Industry analysts in China speculated that the new regulation will allow China’s big three carriers to be just 40%-state owned, enabling a more mixed ownership structure in which outside investors take stakes in Chinese airlines.

In 2015, China Eastern introduced Atlanta-based Delta Air Lines as a strategic investor. The US carrier acquired a 3.2% stake in China Eastern for $450 million. China Southern sold a 2.7% stake to Dallas/Fort Worth-based American Airlines for $200 million in March 2017. Analysts believe more such investments would be likely under the new regulation.

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The new regulation also allows Chinese airports to welcome more non-government investors.

Source: atwonline.com

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