Shanghai to become a one airline town

China Eastern buys Shanghai Airlines for $1.3 billion, but the success of the merger is far from assured.

In a long-anticipated deal, Shanghai-based China Eastern Airlines and Shanghai Airlines have announced they will merge. The deal consolidates the former's hold on China's second largest air travel market and makes the combined entity the only carrier to be based in Shanghai.

According to separate stock exchange filings by the two airlines late Sunday, the boards of both China Eastern and Shanghai Air have agreed to a share swap merger agreement worth an estimated Rmb8.9 billion $1.3 billion. China...

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