China Eastern Airlines’ shares in Hong Kong rose as much as 14.4 per cent on Monday after the weakest of the country’s big three carriers announced it was acquiring rival Shanghai Airlines for just under Rmb9bn ($1.3bn) as it battled high operating losses.

However, the shares lost much of their early gains to close just 2.9 per cent higher at HK$1.79, against a 2.6 per cent decline in the benchmark Hang Seng index.

The state-orchestrated tie-up will see China Eastern dominate the Shanghai aviation hub and become China’s largest airline by market share.