AVIC Subsidiaries Share Trading Suspended

Trading in three subsidiaries of the Aviation Industry Corporation of China (AVIC) was halted on Wednesday amid local media reports that said the state-owned aerospace company was preparing to merge them.

The shares of AVIC Aircraft, AVIC Capital and AVIC Electromechanical System were suspended indefinitely, the companies said in separate stock exchange filings.

The filings gave no reason for the suspension.

Local media, however, said AVIC would "consolidate" the firms as part of the government's efforts to upgrade its fledgling aviation industry so that it is able to compete on a global scale with the likes of Boeing and Airbus.

Analysts said AVIC needed more than a consolidation of its units.

"There need to be follow-up steps to streamline AVIC group's business and improve its efficiency," said Wang Xiaohua, senior consultant with Ken Ridge Consulting.

China's aviation market is dominated by foreign firms. State-owned aircraft maker Comac is building China's first commercial jet, the C919, to compete with the Airbus A320 and Boeing 737, but the launch of the aircraft has been repeatedly delayed.