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The Battle for Shanghai? – Not yet…

( Asia Pacific aviation has come within a whisker of a massive power struggle between two of its most influential airlines, Cathay Pacific and Singapore Airlines. Had Cathay Pacific proceeded with plans to team up with China National Aviation Holding Co (the parent of Air China) to try to block Singapore Airlines’ (SIA) bid for China Eastern, the region would have entered a whole new level of gloves-off competition.
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…
Copyright. © Centre for Asia Pacific Aviation

________________________________________ Note to editors: About Centre for Asia Pacific Aviation The Centre for Asia Pacific Aviation (CAPA) was founded in 1990 and has since built an international reputation as the leading specialist aviation consultancy in the Asia Pacific, the Indian Subcontinent and Middle East regions. CAPA Consulting’s strategic advisory services are supported by the extensive information and data services provided by the Centre’s Market Research Unit to aviation industry leaders every day. The Centre also holds regular Aviation Leadership Summits, which provide unique opportunities for the exchange of ideas and experiences. Head Office, Sydney: Derek Sadubin, Chief Operating Officer Aurora Place, Level 4, 88 Phillip St Sydney PO Box N777, Grosvenor Place Sydney, NSW Australia 2000 Email: Southeast Asia Regional Office: Richard Pinkham, Regional Director, Southeast Asia Email: Indian Subcontinent and Middle East Office: Kapil Kaul, CEO Indian Subcontinent & Middle East Email: UK/Europe Office: David Bentley, UK Associate Email: North America Regional Office: Martti Raito, Regional Director, North America Email: North Asia Representatives: Korea: Kyung-sup Lee. Email: Japan: Reiko Sonoyama. Email: More information is available on the Centre’s website:

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