"We have no plan for an equity deal of any kind," Air China's board secretary, Huang Bin, told Reuters by telephone, although he noted that the two airlines were members of the Star Alliance, a global partnership of airlines.
SHANGHAI (Reuters) - Executives at Air China <601111.SS> and Shanghai Airlines <600591.SS> said on Tuesday that the companies had no intention of forming an equity tie-up, denying speculation that has boosted their shares.
"We have no plan for an equity deal of any kind," Air China's board secretary, Huang Bin, told Reuters by telephone, although he noted that the two airlines were members of the Star Alliance, a global partnership of airlines.
Shanghai Airlines board secretary Xu Junmin told Reuters: "Senior management of the two carriers have never discussed major issues such as an equity deal."
In the past, Shanghai Airlines Chairman Zhou Chi has repeatedly said his company wants to remain independent.
!ADVERTISEMENT!Shares in Chinese airlines rose sharply on Tuesday, partly because of falling global oil prices and partly because of rumors that Air China might seek to buy a major stake in Shanghai Airlines, which reignited speculation about mergers in the sector, analysts said.
The speculation was fuelled by a report in the Beijing Times, which cited Air China's planning chief Sun Yu as saying on Monday that the flag carrier had been in talks with Shanghai Air to expand their cooperation to include an equity tie.
Shares in flag carrier Air China closed up 9.59 percent at 17.83 yuan on Tuesday, while much smaller Shanghai Airlines jumped its 10 percent daily limit to 10.24 yuan.
Air China, based in Beijing, has been seeking to carve out a bigger slice of the highly competitive Shanghai market via a tie-up with China Eastern Air <601115.SS>, the country's number three carrier.
In January, its parent formally proposed a strategic partnership with China Eastern, after China Eastern's minority shareholders vetoed a $920 million plan to sell a 24 percent stake to Singapore Airlines <SIAL.SI> and Temasek <TEM.UL>.
But China Eastern <0670.HK> rejected the Air China proposal, pledging to continue seeking another strategic investor.
Industry analysts said an equity tie-up with Shanghai Air would be just as difficult to achieve, as the small but ambitious carrier has the backing of the Shanghai government.
"No one want to be swallowed up during a booming market," said Ma Ying, an analyst with Haitong Securities.
"Shanghai Air would be another hard nut to crack even if Air China set its eyes on it."
($1=7.048 Yuan)
(Reporting by Fang Yan; Editing by Edmund Klamann)
