China State Council to approve CAAC airline merger plan soon: report

SHANGHAI (AFX-ASIA) - The State Council will soon give approval to a plan for the merger of the Civil Aviation Administration of China's 10 airlines into three large groups, the China Business Times cited government officials as saying.	    The report cited an unnamed official as saying that the merger plan, which the CAAC has already submitted to the State Council, involves the acquisition of China Northern Airlines and Xinjiang Airlines by China Southern Airlines Group.	    China Eastern Airlines Group will acquire China Northwest Airlines, Yunnan Airlines and Great Wall Airlines, while Air China will acquire Southwest Airlines and China International Airlines.	    The official said China Southern Airlines will have total assets worth 46.4 bln yuan after the mergers, and will have 149 aircraft serving 592 air routes.	    The company will have a gearing of 77.4 pct.	    China Eastern Airlines will have assets worth 45.6 bln yuan, and 113 aircraft serving 399 routes.	    It will have a gearing of 78.3 pct.	    Air China will have total assets worth 56.05 bln yuan, and 118 aircraft serving 344 routes.	    The airline will have a gearing of 87.3 pct.	    The official said the problem of the large debts owed by China Northwest Airlines and China Northern Airlines remains unresolved, noting that China Northwest Airlines has a gearing of 113.46 pct, and has debts amounting to 9 bln yuan.	    China Southern and China Eastern will continue to negotiate with central government on this issue, seeking financial support to help dispose of the airlines' debts, the official said.

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