The head of China Development Financial Holding Corp (
"Chairman Liu Tai-ying (劉泰英) plans to push for a merger with China Airlines, Far East Air Transport Corp (遠航) and TransAsia Airways (復興)," said Grace Fan (方鳳山), China Development's public relations manager.
The strategy, according to Fan, is to join forces with a foreign carrier to jointly buy the stake in China Airlines -- the world's second most deadly airline after Cubana Airlines -- hoping to bring in international expertise on airline management and maintenance.
On Wednesday, Liu also named British Airways and American Airlines as possible partners, adding that the domestic market is only big enough for two major carriers.
In anticipation of future direct air links between China and Taiwan, Liu said he is optimistic about expanding China Development's grip on the aviation sector and dreams of building the network to encompass China.
China Development currently owns a 13 percent stake in Far East and will attempt to acquire a 51-percent stake in TransAsia in two to three years.
By that time, Liu is banking on Far East's abundant domestic flights, TransAsia's money-making route between Taipei and Macau and China Airlines' international flights to form the backbone of a network for air transportation in the region.
Expressing confidence in its ability to rescue the troubled carrier -- upon whose flights 801 passengers and crew have died since 1970 -- Fan said China Development's management experience with Far East will smooth China Airlines transition to privatization if the government releases part of its stake.
That 72 percent stake is held by China Aviation Development Foundation (航發會), the government body charged with overseeing the carrier and its privatization plan.
Lauding Liu's move, Chu Yun-peng (
Chinese-language media, however, speculated that the success of privatization depends on the DPP government's willingness to let China Development take over its shares in the carrier, saying "political concerns will take priority."
But with China Airlines being a commercial hot potato few want to touch, Chu said that the government should not have too many political concerns since few companies will be interested in, or capable of, taking over.
Local media also asserted that China Development must grab a 30 percent stake to be able to take control of the carrier, a move expected to cost the bank nearly NT$15 billion.
Shares of China Airlines rose NT$0.25, or 2 percent, to NT$12.85 yesterday.
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