The Battle for Shanghai? – Not yet…
Even with Cathay’s backdown (for reasons that are yet to emerge), that new competitive era has now dawned, spurred by China’s massive growth and even bigger potential.
It appears Beijing stepped in to avoid a high-stakes corporate battle (possibly viewing it as a distraction as all strategic and operational focus shifts to providing a smooth Olympics next year, and/or because other sweeping changes are planned to the present structure of Chinese aviation).
Either way, it appears alliance linkages (bilateral and global groupings) are likely to be irrelevant in the tussles that loom ahead over China. Control of the key Mainland hubs is a prize that will overshadow all else – and Cathay Pacific and Singapore Airlines have committed themselves to play a leading role. But questions remain over the intentions of Air France-KLM, Lufthansa, Korean Air, Emirates, Qantas and a host of other carriers. Surely they too will be drawn into battle soon.
Cathay Pacific appears to have put the gloves down for the time being. Air China stated the ‘proposed transaction’ by its parent for China Eastern shares would not proceed now or for the next three months – ie after the China Eastern shareholder vote on the (current) SIA offer. But there are many rounds ahead…
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