China Eastern Airlines (CEA), the country's third largest carrier, denied rumors of a merger plan with the Shanghai Airlines yesterday.

Earlier reports said a merger of the two carriers aimed to consolidate aviation resources in Shanghai, one of the country's aviation hub, and talks on the merger had already started.

There were no merger plans with other airline companies, CEA said in a statement.

CEA had signed a preliminary deal in September to sell a 24 percent stake to Singapore Airlines (SIA) and Lentor Investments, a unit of the Singapore government investment arm Temasek Holdings.

The bid, however, was rejected in January by CEA shareholders.