China outlines consolidation of airline industry.

BEIJING, Jan. 9 Kyodo

China is consolidating its airline industry through a series of mergers and acquisitions that would lead to the birth of three major airline groups, according to the state media.

The state-run China Central Television (CCTV) reported Tuesday night that the Beijing-based international carrier Air China will merge with China Southwest Airlines based in Chengdu, Sichuan Province, to form a group company capitalized at 56 billion yuan ($6.76 billion).

The new company is expected to have about 20,000 employees and 118 aircraft.

The domestic carrier China Eastern Air, based in Shanghai, will merge with the regional Yunnan Airlines, based in Kunming, and acquire China Northwest Airlines based in Xian, Shaanxi Province, to create a 47.3 billion yuan company with 118 aircraft and 25,000 employees.

China Southern Airlines will merge with China Northern Airlines, based in Shenyang, and China Xinhua Airlines based in Urumqi, Xinjiang Province to create a new entity with 50.1 billion yuan in capital, 180 aircraft and 34,000 employees.

The CCTV report did not specify when the mergers would occur, saying only that the Chinese airline industry was heading for a complete overhaul this year.