China airline mergers finally on the cards

For over a year now the Civil Aviation Administration of China (CAAC) has talked about consolidating the 10 airlines under its control into three groups. Investors are finally paying attention and its latest reiteration of this policy has proven a significant factor behind a surge in the prices of listed H-shares China Southern Airlines (CSA) and China Eastern Airlines (CEA), both of which have more than doubled since late May.