There is still no official word on why Cathay Pacific withdrew its sudden bid to cut in on Singapore Airlines' already agreed upon deal to buy a 24 percent stake in China Eastern.

But by retreating, Cathay almost certainly averted a head-to-head battle with SIA for the mainland's most lucrative market, for passengers and aircargo.

The Hong Kong-based carrier teamed up with China National Aviation Holding Co (CNAHC), the parent of Air China, to try to block the SIA-Temasek Holdings acquisition of the China Eastern stake.

Shares of all three carriers were suspended pending an announcement by Cathay that was made late last night. The statement said a proposal to acquire the China Eastern shares was to have been made to the Shanghai airline.

"The acquisition would have replaced that previously proposed by Singapore Airlines Limited and a subsidiary of Temasek Holdings (Private) Limited."

The Singapore deal is subject to minority approval by both holders of China Eastern's Shanghai-listed A-shares as well as H-share investors. Only one group needs to reject the deal for it to be nullified.

The Centre for Asia Pacific Aviation believes Beijing stepped in to avoid a high-stakes corporate battle. "Possibly viewing it as a distraction as all strategic and operational focus shifts to providing a smooth Olympics next year, and/or because other sweeping changes are planned to the present structure of Chinese aviation.

"Either way, it appears alliance linkages (bilateral and global groupings) are likely to be irrelevant in the tussles that loom ahead over China. Control of the key mainland hubs is a prize that will overshadow all else - and Cathay Pacific and Singapore Airlines have committed themselves to play a leading role.

"But questions remain over the intentions of Air France-KLM, Lufthansa, Korean Air, Emirates, Qantas and a host of other carriers. Surely they too will be drawn into battle soon."