Airlines in China are not kind to consumers. The industry is plagued by bad service and some of the worst food on the planet. Problems are legion and include dishonest code-sharing agreements with international airlines that mean you find can yourself on a different airline from the one printed on your ticket.

Much of this can be blamed on the anti-competive regulatory environment. Further consolidation is not good news for poor sods without their own executive jets, but unfortunately, it's the people who do have executive jets who make the deals. Here is some background from today's Financial Times:

Cathay Pacific has opened wide-ranging talks with China National Aviation Holding, one of China's big three airline groups, which could include a sale of regional airline Dragonair to the Hong Kong-based international airline.

But the talks are believed to be at a very early stage and focusing on various types of cooperation rather than an outright sale of Dragonair to Cathay.

They include code-sharing, common use of landing slots in Hong Kong and Beijing airports and technical cooperation.

Cathay has been seeking to expand its service to China, a market it pulled out of in 1990 after buying a stake in Dragonair, which has become Hong Kong's de facto regional carrier serving mainland cities.

It returned to the Chinese market in 2003 and bought a 10 per cent stake in Air China, the country's flagship carrier controlled by CNAH, last October in a bid to seek to greater access to the country's tightly regulated skies.

State-owned CNAH owns 65.79 per cent of Air China, which has a 69 per cent interest in Hong Kong-listed China National Aviation Company. CNAC is Dragonair's biggest shareholder with a 43.29 per cent stake. Cathay also owns 17.79 per cent of Dragonair.

LINK:
FT: Cathay and CNAH in co-operation talks