Cathay Pacific Airways Ltd and the parent company of its Chinese
affiliate have backed off from a planned joint bid for shares in
China Eastern Airlines Corp, a report carried by The Wall Street
Journal network said on Monday.
The move averted a showdown with Singapore Airlines for control
of the Chinese mainland's lucrative Shanghai gateway, said the
report.
Singapore Airlines agreed earlier this month to buy a 15.7
percent stake in Shanghai-based China Eastern to establish a
foothold in China's enormous aviation market.
Singaporean government's investment arm Temasek agreed to
simultaneously buy an additional 8.3 percent of China Eastern.
Cathay and Air China were expected to offer a higher premium for
China Eastern's shares. Air China affiliate China National Aviation
already holds an 11 percent stake in China Eastern.
Singapore Airlines' proposed investment in China Eastern would
give it access in Shanghai to a steady supply of Chinese domestic
passengers to feed into its extensive international route network,
said the report.
The jockeying for a stake in China Eastern has unfolded against
a backdrop of torrid growth in Chinese passenger traffic. With
China's economy racing ahead at an 11.5 percent annual pace for the
first half of the year, ever more Chinese can afford to take to the
skies for business and leisure, the report added.
(Xinhua News Agency September 25, 2007)
