Bangkok--10 Mar--Centre for Asia Pacific Aviation Airline Code [CSN] View More China Southern Airlines News China Southern Airlines Chairman, Liu Shaoyong, has entered the debate on the future structure of China’s airline industry, advocating that the various state-owned shareholdings in Air China, China Eastern Airlines and China Southern Airlines be combined in one holding company. Mr Liu, a former General Manager of China Eastern (from 2000 to 2002), has also reiterated calls for a massive USD5.6 billion government cash injection into China Southern — which could re-ignite the share prices of China’s big three carriers. Mr Liu stated a cash injection would help the airlines repay debt and fund expansion - and ultimately raise their international competitiveness. This suggestion is an alternative path to diametrically opposed positions held by China Eastern and Air China on improving China’s competitiveness that has led to the current deadlock. China Eastern is seeking a foreign strategic partner, while CNAC (Air China’s parent) is seeking financial and operational cooperation with the Shanghai-based carrier. At stake is control of the highly important Shanghai hub. But China Southern’s ‘Liu Alternative’ flies in the face of recent comments by CAAC Minister, and former Air China Chairman, Li Jiaxiang, that “the market will decide”. The CAAC has refused in the past to inject further funds into China’s major airlines — a position which contributed to the merger speculation of last year. When announcing a surprise codeshare and marketing deal between China Southern and China Eastern last month, Mr Liu reportedly made an offer to propose China Eastern Airlines for membership in the SkyTeam Alliance. This could be seen as a deliberately provocative act in the midst of CNAC’s bid for China Eastern. Liu’s latest remarks, and China Eastern’s steadfast refusal to deal with Air China, will at least provoke some response from CNAC. At the start of this month, CNAC took out advertising in the South China Morning Post, urging China Eastern’s Board to review its rejection of a proposed alliance. This could be the final act by CNAC before it goes directly to China Eastern shareholders with an offer. A possible resolution of this stalemate - once all views are in the open - is for Singapore Airlines to increase its bid. Meanwhile, SIA will be hoping for a further decline in China Eastern's share price.