Hainan Airlines to form Grand China Air

Airline Industry Information, Oct 18, 2005

AIRLINE INDUSTRY INFORMATION-(C)1997-2005 M2 COMMUNICATIONS LTD

Hainan Airlines, a Chinese carrier, has said that it plans to merge three airlines to form a new company.

The merger is reportedly part of a plan to raise capital and sell stakes in Hong Kong as the airline plans to acquire more aircraft and expand its route network. Company spokesman Sun Jinwei has said that Hainan Airlines will merge with Xinhua Airlines Co, Changan Airlines Co and Shanxi Airlines Co to form Grand China Air, shanghaidaily.com reported.

Separately, it was recently announced that Hainan Airlines will receive an additional USD25m investment from the financier George Soros.

The new investment will reportedly double the sum that Soros has already invested in the company. According to Shanghai Securities News the money will be invested in Grand China Air.

In 1995 Soros invested USD25m to buy 14.8% of Hainan Airlines.

The airline has said that it expects its net profit to increase by up to 10% in 2005.

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