China Eastern Airlines (CEA) has proposed to takeover Shanghai Airlines through a share swap, according to a Dow Jones report citing an un-named source. If successful, the move would finalise what has been a long drawn-out negotiation over how best to merge the two struggling airlines and is part of Beijing’s plan to consolidate the aviation industry, in particular the airlines, which are plagued by operational inefficiencies and debilitating price wars due to the plethora of small operators. According to the report, CEA will raise US$1.02 billion through a private placement to finance the merger, then swap 1.3 of its Shanghai-listed A shares for every oneof Shanghai Airlines A shares.