The Breakup of CAAC and the Big Three
CAAC began to be broken up from 1985 but the primary breakup really happened from 1988 to 1992. 2002 saw a major consolidation of state owned airlines with the intention of creating three major groupings. Initially this saw a decrease in the number of airlines as China Southern absorbed China Northern and China Xinjiang, China Eastern absorbed China Northwest and China Yunnan and Air China tookover China Southwest. However in recent years the big three have consolidated their position with growth of subsidiaries and purchases of existing airlines which retain their separate identities. Most notably: China Eastern bought Shanghai Airlines to assist it in remaining the biggest airline at its Shanghai hub; China Southern owns a majority of Xiamen Airlines; and Air China owns a majority of Shenzhen Airlines (see Other Chinese Airlines). It is likely all three of the majors will create Low Cost Carriers in time but as of yet only China Eastern has, with a reborn China United Airlines.