American Airlines to buy stake in China carrier

The move comes as increasing demand for air travel among China's growing middle class is expected to make it the world's biggest aircraft market in the coming years.

American Airlines to buy stake in China carrier

World Bulletin / News Desk

American Airlines is in advanced talks to buy a $200 million stake in Asia?s biggest airline China Southern, reports said Thursday, as it looks to get a shoo-in to the country's huge aviation market.

The Texas-based company plans to take the stake in the Chinese firm's Hong Kong-listed shares through a private placement, Bloomberg News reported, quoting people familiar with the matter.

China Southern suspended its stocks traded in both Hong Kong and Shanghai on Thursday morning pending a "possible major strategic cooperation", exchange statements said.

China Southern has a total market capitalisation of HK$15 billion ($2 billion) in Hong Kong, exchange data shows.

American is the world?s biggest airline in terms of revenue by kilometres flown, while China Southern is the fifth largest and number one in Asia, according to the latest available rankings by the International Air Transport Association.

If the deal goes through, American will be able to take a seat at the board of China Southern without voting rights.

The report buoyed share prices of two other major Chinese airlines Thursday. China Eastern jumped 4.71 percent in Hong Kong and more than two percent in Shanghai, while flag carrier Air China rose four percent in Hong Kong and more than three percent in Shanghai.

American Airlines' earnings plunged in the final quarter of last year, with net profit dropping to $289 million from $3.3 billion in the same period last year.

China Southern is scheduled to release its 2016 earnings on March 31.


Güncelleme Tarihi: 23 Mart 2017, 10:00