EXECUTIVES at Air China and Shanghai Airlines said yesterday 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, said, although he noted that the two airlines were members of the Star Alliance, a global partnership of airlines.

“Senior management of the two carriers have never discussed major issues such as an equity deal,” said Xu Junmin, board secretary of Shanghai Airlines.

Shanghai Air chairman Zhou Chi has repeatedly said his firm wants to remain independent.

Shares in domestic airlines rose sharply yesterday, 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 fueled by a report in the Beijing Times, which quoted Air China’s planning chief Sun Yu as saying Monday that the flagship carrier had been in talks with Shanghai Air to expand their cooperation to include an equity tie.

Shares in Air China closed up 9.59 percent at 17.83 yuan (US$2.53) yesterday, while much smaller Shanghai Airlines jumped its 10 percent daily limit to 10.24 yuan.

Air China has been seeking to carve out a bigger slice of the highly competitive Shanghai market via a tie-up with China Eastern Air, the country’s third-largest carrier.

In January, its parent formally proposed a strategic partnership with China Eastern, after China Eastern’s minority shareholders vetoed a US$920 million plan to sell a 24 percent stake to Singapore Airlines and Temasek. (SD-Agencies)