Air China parent may buy small Wuhan carrier
Air China announced Monday that its parent group was beginning negotiations to purchase Wuhan-based East Star Airlines. It is unknown how much of East Star Air China would acquire. The state-owned airline could benefit from using the private airline's routes to expand its service in central China. A recent drop in air traffic has also made it difficult for small airlines to compete with their larger state-owned counterparts. In December, it was announced that two state-owned airlines, China Eastern and China Southern, would be receiving US$1.5 billion in capital injections from the government, but few private carriers have received government support.
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