If advanced negotiations involving Swire bear fruit, the HK carrier would also take over its rival, Dragonair
Cathay Pacific may be taken over by Air China as part of a consolidation of Hong Kong's two main airlines that allows its British parent a substantial stake - and management influence - in the mainland's flag carrier.
Swire Group is understood to be in advanced negotiations that would see Cathay take over rival Dragonair before being itself subsumed into the Air China group.
Hong Kong-listed Swire Pacific may accept Air China shares in return for its 45.73 per cent stake in Cathay, a move that would make it the single largest shareholder in the mainland carrier and place its executives at the core of the new group's operations, according to informed sources in the affected companies.
'A deal is very close to being completed. The 10 per cent investment in Air China by Cathay [in November] was the first step in cementing a relationship,' said a senior Swire executive. 'Cathay has successfully fought for a small share of the Beijing-Hong Kong and Shanghai-Hong Kong routes, but that is not enough. It knows that it will need full integration into the market.'
Sources suggested a deal could be announced within two weeks.
