Shanghai Air, China Eastern say no merger talks

SHANGHAI (Reuters) - China Eastern Airlines (600115.SS) (0670.HK) and its smaller rival Shanghai Airlines 600591.SS said on Thursday they had not discussed a possible merger, playing down a media report on a possible tie-up that had sent their shares surging.

Shanghai Airlines said in a statement to the Shanghai Stock Exchange that neither it nor its state-run parent had taken any action on a major transaction that would be related to restructuring in the country's aviation industry.

China Eastern, which has been seeking to sell a 24 percent stake to Singapore Airlines (SIAL.SI), said in a separate statement that it had not held talks on a possible tie-up with any other airlines.

Major Chinese business magazine Caijing reported on Wednesday that the central government and the Shanghai city government were discussing a merger of the two Shanghai-based airlines, citing a senior industry source.

It also quoted the source as saying that the two companies had not taken part in the discussions.

Shares in both airlines rose sharply after the report.

(Reporting by Fang Yan; Editing by Edmund Klamann)