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Old March 13th, 2005, 12:17 AM   #261
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China Eastern Airlines Feb Passengers Up 15% To 1.32 Mln
11 March 2005

HONG KONG (Dow Jones)--China Eastern Airlines Corp. (CEA), one of China's major state-controlled airlines, said Friday its passenger numbers rose 15% on year in February to 1.32 million.

China Eastern didn't give a reason for the on-year increase.

The number of domestic passengers of the Shanghai-based carrier rose 2% from February last year, while international passengers increased 56%.

The passenger load factor - the percentage of seats that were filled - was 65% in February, up from 59% in January.

The freight load factor was 48%, down from 52% in January.
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Old March 13th, 2005, 06:22 PM   #262
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Shanghai Pudong airport passes test on new runway
12 March 2005
Xinhua

SHANGHAI, March 12 (CEIS) -- The second runway of the Shanghai Pudong airport has passed the test on March 11, and is ready for operation, said an official with the airport.

The new runway, 2,260 meters east to the present runway, 3,800 meters long and 60 meters wide, is built to accommodate the AirbusA380 superjumbo, the world's largest commercial jet.

The runway is also equipped with a sophisticated blind landing system that will allow planes to land even in heavy fog.

Operation of the new runway will relieve congestion because of soaring flight traffic in this commercial hub of China.

Opened in 1999, Pudong's present runway is operating at capacity, handling nearly 500 flights per day carrying more than 35 million passengers last year.
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Old March 14th, 2005, 07:41 AM   #263
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China's First Private Airline Teams With Foreign Pilots
By Federica Bianchi Of DOW JONES NEWSWIRES
13 March 2005

BEIJING (Dow Jones)--Daniela Schmidt's newly obtained commercial pilot license appeared to be of little use after Swissair went bankrupt four years back leaving hundreds of experienced pilots competing for jobs at struggling European airlines.

But China's fast developing economy has given the 25-year-old Swiss a new opportunity as she becomes the country's first foreign female commercial pilot at a newly launched private airline.

For the startup Okay Airways Co., based in the northern port city of Tianjin, the move to recruit young, but eager foreign fliers gives it a chance to compete in the domestic aviation industry, now dominated by three state-backed behemoths.

Schmidt followed her Dutch boyfriend to China last year even though she didn't speak or read Mandarin and had never visited the country.

"I didn't think I could find work in China," Schmidt told Dow Jones Newswires. "But China is giving me an opportunity to fly that I wouldn't have otherwise."

Schmidt is the only woman among a maiden group of six foreign pilots that Okay Airways, China's first privately-held airline, has recruited as co-pilots amid a shortage of native Chinese pilots.

The pilot deficit comes as growth in China's air travel is expected to stay robust.


Big Job Market For Foreign Pilots In China

Airbus (ABI.YY) estimates China's will need to order 1,790 passenger and cargo aircrafts, or US$230 billion worth of planes, in the next 20 years. Over a 10-year period, China's passenger and freight traffic should rise around 9% annually, based on Airbus estimates.

"China is short of captains and co-pilots. We offer young foreign pilots an opportunity to grow," Okay Chairman and President Liu Jie Yin told Dow Jones Newswires. He estimated China will be short some 8,000 pilots in the next 10 years.

The small foreign trainee group at Okay Airways includes one Chinese-Canadian, one Swiss and four Hong Kong citizens, between ages 25 and 30. They have one thing in common: they have obtained a pilot's license in their home countries but can't find work there.

"A lot of trained pilots in the West can't find an opportunity to put some experience under their belt, while we in China are short of co-pilots, captains and even technicians," Liu said.

That makes pilots, who have finished their training, but need more practice to improve their skills, a good fit for China's aviation industry, Liu said, adding that he intends to recruit more foreign pilots in coming months.

But the strategy is also about cost for startup carriers like Okay Airways, which - with just six leased Boeing Co. (BA) 737 aircrafts - is entering a market controlled by giants led by Air China, China Southern Airlines Co. (ZNH) and China Eastern Airlines Corp. (CEA).

Low Cost Carriers Look For A Role In China

Experienced foreign pilots, a common feature of Middle Eastern airlines like Dubai-based Emirates Airlines (EA.YY), are too expensive for China's smaller airline companies.

These young Okay pilots will take a pay cut. They will receive a salary of about CNY20,000 ($2,415) per month, higher than the CNY11,000 that Air China offers its co-pilots, but well below any European standard.

But Schmidt's enthusiasm is undimmed for a chance to take to the skies. "I would fly for less, as long as I can fly," she said. "It's been my goal since I have been 15."

Schmidt's debut as a pilot at the controls is expected in two months, after she completes the training on a Boeing 737-900, the first airplane that Okay has leased from South Korea.

On Friday, when Okay Airways' maiden flight takes off from the northern city of Tianjin to Kunming in the south - one of four routes the airline is licensed to fly - Schmidt will be in the cockpit watching.

The new airline is an experiment altogether. After restructuring China's aviation industry in recent years, Beijing gave the nod last year to allow small private airlines to set up in response to the growing passenger and route demand.

But regulatory restraints may limit the potential of these start ups.

Okay is the first to receive a license from the General Administration of Civil Aviation of China. Another three, Shanghai-based Spring International Airlines, Chengdu-based Eagle Airlines and Huaxia Airlines in the Gansu province, are awaiting their licenses.

One major hurdle is the difficulty of leasing or buying a plane at an affordable price because the Chinese government controls the total number of aircraft brought in the country and makes it hard for a small company to plan its future orders.

Also, the aviation regulator hasn't tailored rules on low cost airlines that would let them pay lower airport fees and flying routes are assigned, not approved, by the regulator.

- By Federica Bianchi, Dow Jones Newswires
- Edited by Costas Paris
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Old March 14th, 2005, 09:49 PM   #264
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Quote:
Originally Posted by hkskyline
China's First Private Airline Teams With Foreign Pilots
By Federica Bianchi Of DOW JONES NEWSWIRES
13 March 2005

BEIJING (Dow Jones)--Daniela Schmidt's newly obtained commercial pilot license appeared to be of little use after Swissair went bankrupt four years back leaving hundreds of experienced pilots competing for jobs at struggling European airlines.

But China's fast developing economy has given the 25-year-old Swiss a new opportunity as she becomes the country's first foreign female commercial pilot at a newly launched private airline.

For the startup Okay Airways Co., based in the northern port city of Tianjin, the move to recruit young, but eager foreign fliers gives it a chance to compete in the domestic aviation industry, now dominated by three state-backed behemoths.

Schmidt followed her Dutch boyfriend to China last year even though she didn't speak or read Mandarin and had never visited the country.

"I didn't think I could find work in China," Schmidt told Dow Jones Newswires. "But China is giving me an opportunity to fly that I wouldn't have otherwise."

Schmidt is the only woman among a maiden group of six foreign pilots that Okay Airways, China's first privately-held airline, has recruited as co-pilots amid a shortage of native Chinese pilots.

The pilot deficit comes as growth in China's air travel is expected to stay robust.


Big Job Market For Foreign Pilots In China

Airbus (ABI.YY) estimates China's will need to order 1,790 passenger and cargo aircrafts, or US$230 billion worth of planes, in the next 20 years. Over a 10-year period, China's passenger and freight traffic should rise around 9% annually, based on Airbus estimates.

"China is short of captains and co-pilots. We offer young foreign pilots an opportunity to grow," Okay Chairman and President Liu Jie Yin told Dow Jones Newswires. He estimated China will be short some 8,000 pilots in the next 10 years.

The small foreign trainee group at Okay Airways includes one Chinese-Canadian, one Swiss and four Hong Kong citizens, between ages 25 and 30. They have one thing in common: they have obtained a pilot's license in their home countries but can't find work there.

"A lot of trained pilots in the West can't find an opportunity to put some experience under their belt, while we in China are short of co-pilots, captains and even technicians," Liu said.

That makes pilots, who have finished their training, but need more practice to improve their skills, a good fit for China's aviation industry, Liu said, adding that he intends to recruit more foreign pilots in coming months.

But the strategy is also about cost for startup carriers like Okay Airways, which - with just six leased Boeing Co. (BA) 737 aircrafts - is entering a market controlled by giants led by Air China, China Southern Airlines Co. (ZNH) and China Eastern Airlines Corp. (CEA).

Low Cost Carriers Look For A Role In China

Experienced foreign pilots, a common feature of Middle Eastern airlines like Dubai-based Emirates Airlines (EA.YY), are too expensive for China's smaller airline companies.

These young Okay pilots will take a pay cut. They will receive a salary of about CNY20,000 ($2,415) per month, higher than the CNY11,000 that Air China offers its co-pilots, but well below any European standard.

But Schmidt's enthusiasm is undimmed for a chance to take to the skies. "I would fly for less, as long as I can fly," she said. "It's been my goal since I have been 15."

Schmidt's debut as a pilot at the controls is expected in two months, after she completes the training on a Boeing 737-900, the first airplane that Okay has leased from South Korea.

On Friday, when Okay Airways' maiden flight takes off from the northern city of Tianjin to Kunming in the south - one of four routes the airline is licensed to fly - Schmidt will be in the cockpit watching.

The new airline is an experiment altogether. After restructuring China's aviation industry in recent years, Beijing gave the nod last year to allow small private airlines to set up in response to the growing passenger and route demand.

But regulatory restraints may limit the potential of these start ups.

Okay is the first to receive a license from the General Administration of Civil Aviation of China. Another three, Shanghai-based Spring International Airlines, Chengdu-based Eagle Airlines and Huaxia Airlines in the Gansu province, are awaiting their licenses.

One major hurdle is the difficulty of leasing or buying a plane at an affordable price because the Chinese government controls the total number of aircraft brought in the country and makes it hard for a small company to plan its future orders.

Also, the aviation regulator hasn't tailored rules on low cost airlines that would let them pay lower airport fees and flying routes are assigned, not approved, by the regulator.

- By Federica Bianchi, Dow Jones Newswires
- Edited by Costas Paris
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Pics of China cities

Beijing topic[北京专题] Shanghai topic[上海专题] Fuzhou topic[福州专辑]
Kunming Topic[昆明专辑] airports pics of China[中国机场]

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Old March 14th, 2005, 11:52 PM   #265
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pretty FAs..

the logo reminds me of TG
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Old March 15th, 2005, 02:11 AM   #266
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Quote:
Originally Posted by km-sh
They need to take off that big "OK", it looks out of place and makes the plane llook FUGLY.
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Old March 15th, 2005, 05:32 AM   #267
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China Southern Airlines Feb Passengers Up 77% On Year
14 March 2005

HONG KONG (Dow Jones)--China Southern Airlines Co. (ZNH), one of China's major state-controlled airlines, said Tuesday it carried 77% more passengers in February than in the same month last year.

The Guangzhou-based airline said it carried 3.26 million passengers in February, up from 1.84 million in February 2004. It carried 2.88 million in January.

It said it handled 39,990 metric tons of cargo in February, up 0.2% on year.

The airline didn't comment on the figures, which were posted on its Web site.

The airline's revenue passenger kilometers - the number of passengers multiplied by the number of kilometers they fly - rose 99.6% on year in February.

- By Ruby Chan, Dow Jones Newswires
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Old March 15th, 2005, 05:34 AM   #268
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Beijing Capital Airport February Passengers Up 18% On Yr
14 March 2005

HONG KONG (Dow Jones)--Beijing Capital International Airport Co. (0694.HK) said Tuesday passenger traffic at the Chinese capital's airport rose 18% year on year in February.

Around 2.64 million passengers passed through the airport during the month, of which 78% traveled on domestic routes, 17% on international routes and 5% on Hong Kong and Macau routes.

The number of passengers traveling on domestic routes rose 19%, while passengers on international routes were up 10%. Those traveling on Hong Kong and Macau routes increased 35%.

The airport operator didn't give a reason for the increases.

Aircraft takeoffs and landings at the airport increased 8% on year in February, it said. Of those, 79% were domestic flights, 17% were international and 4% were flights to Hong Kong and Macau.

The number of domestic flights rose 7% on year, international flights were up 10%, and Hong Kong and Macau flights increased 9%.

In February, the airport handled 41,997 metric tons of cargo and mail, down 9% from a year earlier.

- By Ruby Chan, Dow Jones Newswires
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Old March 15th, 2005, 03:40 PM   #269
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Two Chinese airlines to introduce world's biggest aircraft before 2008
15 March 2005
Xinhua's China Economic Information Service

BEIJING, March 15 (CEIS) -- At least two Chinese airline companies will introduce the world's biggest aircraft Airbus A380 before 2008. With 555 seats, the plane will play a key role in the Beijing Olympics, said Airbus China president Laurence Barron here on March 14.

In January, China Southern Airlines signed with Airbus for the purchase of five A380s. Of the total, two are scheduled for delivery before the end of 2007 and one will be delivered in the first half of 2008. He said more Chinese airlines have showed keen interest in the double decker aircraft, which will be an ideal transportation vehicle during the Beijing Olympics.

With the rapid development of China's airline industry, the huge Chinese market is playing an increasingly important role in Airbus' global map. This year, more than 64 Airbus aircraft will be delivered to Chinese airlines, accounting for more than one sixth of total deliveries of Airbus aircraft worldwide.

Airbus is not only selling aircraft, but also committed to the long-term development of China's aviation industry. The Airbus engineering center will be opened in China this year, with a plan to employ 200 Chinese engineers before 2008, said Barron.

In 2004, a total of 41 Airbus aircraft joined the fleet of airlines in China. Airbus also intensified industrial cooperation significantly with China last year. It made a commitment last year that its procurement from China will increase from 15 million US dollars per annum at present to 120 million US dollars a year by 2010.

Airbus' business in China has been steadily expanding since it first entered the country in 1985. The Airbus fleet in service in China has grown to more than 270 today from just 29 in 1995. A world- class training and support center, which represents a 80 million US dollars investment by Airbus, is fully operational in Beijing. Five Chinese companies are already involved in producing parts for Airbus aircraft.
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Old March 15th, 2005, 03:44 PM   #270
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China to loosen control airport charges to help airports in the red
12 March 2005
Xinhua's China Economic Information Service

BEIJING, March 12 (CEIS) -- The General Administration of Civil Aviation (GACA) is considering to loosen control over charges on airplane landing and taking off to help money-losing airports, Beijing News said on March 11.

The GACA is developing a new pricing policy for airports, for example, setting a ceiling for charges, the paper quoted Zhang Guanghui, director of the GACA's Airport Department, as saying.

Airport regular cost, including charges on airplane landing and taking off and fuel, accounts for 78 percent of the total cost of an airline company, said Han Jing, spokesman of Okay Airways, China's first private airline company.

As a result, about 85 percent of China's airports are losing money, especially small and medium- sized airports, Zhang said.

A GACA report said 93 out of the existing 133 airports on the Chinese mainland receive less than a million passengers annually each. Beijing, Shanghai and Guangzhou airports received 37.7 percent of the total passengers and 56.3 percent of the cargo.

If the administration replaced the fixed charging system with aprice ceiling, small airports would be able to offer a lower priceto attract more airline companies and the big ones would not buildup the monopoly, Zhang said.

Insiders said reform of the airplane landing and taking off charging system will alleviate the burden of domestic airlines and provide new opportunities for feeder liners.
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Old March 15th, 2005, 06:25 PM   #271
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INTERVIEW-Air China profits to cope with fuel price
By Ben Blanchard

BEIJING, March 14 (Reuters) - Air China Ltd., mainland China's most valuable airline, expects its profitability this year to survive sky-high oil prices, thanks to soaring passenger demand, cost cutting and fuel hedging, its chairman said on Monday.

State-run Air China, the last of China's three large airline groups to list, had no concrete plan to buy the Airbus A380, Chairman Li Jiaxiang said, although he suggested the company could lease the giant aircraft.

"We were the most profitable Chinese airline last year, and I think we'll still be at the front this year," Li told Reuters in an interview at the airline's Beijing headquarters, declining to give a profit outlook.

Effective hedging and cost cutting would help offset oil prices hovering above $50 a barrel, said the 55-year-old executive.

"We've had a cost-cutting programme for the last three years, and that will continue," Li said. "Strong passenger numbers in January and February show how fast demand is growing, and that will help guarantee profitability."

The airline, which listed in Hong Kong and London late last year and is 9.9 percent owned by Hong Kong's Cathay Pacific Airways Ltd., agreed in January to buy 20 A330-200 aircraft from Airbus and 15 787s from Boeing Co.

That, for the moment, was enough to absorb, said Li.

"We don't have any concrete plans to buy the A380 at present, though we are considering it," said Li, a former air force general. "But there are other ways of adding aircraft, like leasing."

To date only China Southern Airlines Co Ltd. has ordered the A380 in China, buying five.

Boeing has predicted that China will become the world's second-largest commercial aviation market, behind the United States, within 20 years.

The company says China will need 2,300 planes over the next two decades as increasingly well-off Chinese take to the air.

Indeed, Li said almost three-quarters of Air China passengers were business travellers and the company had launched a 700 million yuan ($85 million) scheme to upgrade its first and business class cabins and ground facilities.

Air China has absorbed two smaller carriers under a broad consolidation of China's fragmented airline industry.

The airline has a 35 percent market share on China's 20 busiest domestic routes and 51 percent of the international market. Its planes also tend to fly with more seats taken. ($1=8.276 yuan) (Additional reporting by Yanina Zhao).
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Old March 16th, 2005, 06:26 PM   #272
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Air China plans raid on Cathay
17 March 2005
Daily Telegraph

AIR China is reported to be negotiating a takeover of Hong Kong's Cathay Pacific Airways.

Under the deal, Cathay Pacific would first buy out its local rival, Hong Kong Dragon Airlines Ltd, before being subsumed into the Air China group, reports said.

Swire has a 45 per cent stake in Cathay Pacific and a 10 per cent stake in Air China.

Carolyn Leung, a Cathay Pacific spokeswoman, declined to discuss the report.

"We don't comment on market rumours," she said.

The report said if Hong Kong-listed Swire accepts Air China shares in return for its stake in Cathay, it would be the single largest shareholder in the mainland carrier.

This would place Swire's mainly British executives at the core of the Chinese airline's operations.

The report also cited unidentified "informed sources in the affected companies" as saying a deal would likely be announced in two weeks' time.

Any deal will require consent from multiple shareholders at the listed firms that potentially have divergent interests. Dragonair is controlled by China National Aviation Co, while Chinese conglomerate CITIC Pacific Ltd has stakes in both airlines but a deal would be a boon for Cathay, which only won the right to fly to China a couple of years ago after an absence of more than 10 years.

Cathay resumed passenger services to Beijing in December 2003 after a 13-year hiatus in the mainland, and it now operates daily services to the capital.

The airline early this year launched passenger services to Xiamen and a freighter service to Shanghai.
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Old March 17th, 2005, 07:22 AM   #273
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China's 1ST Private Carrier Faces Competition on Flight Route

CHANGSHA, March 17 Asia Pulse - Hainan Airlines is re-opening a flight route of which Okay Airways, China's brand-new first private airline, currently has the monopoly.

Hainan Airlines' flights will begin March 27 on the route from north China's Tianjin Municipality to Changsha, capital city of central China's Hunan Province, according to resources from Hainan Airlines.

Okay made its maiden flight on March 11 following the same route. The launch rocked the long-term monopoly of the civil aviation sector by mainly state capital and helped to optimize theallocation of airline services in China.

Okay has begun running small routes off main hubs, including Tianjin-Changsha route which was once held by Hainan Airlines but was suspended two years ago for inadequate passengers.

"We resume the flight mainly to meet increasing demand along the route, not for competition with Okay," said Wang Xinyu, a senior manager with Hainan Airlines' marketing department. He saidthere will be no price battle between the two sides.

Hainan Airlines, a joint-stock aviation operator based in Haikou, Hainan province, gave a warm welcome to Okay, saying "introduction of private capital can help open up the civil aviation market more effectively," while many other state-owned airlines fight to maintain their dominance.

Okay also welcomed Hainan's return to the route. "More than one companies operating on the same route will help develop a more mature market," said Han Jing, a higher executive manager of Okay.

China's aviation industry has grown faster than the economy as a whole, but the civil aviation industry was virtually closed to private investment. The liberalization of the sector is part of China's effort to promote private economy's development.

(XIC)
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Old March 17th, 2005, 03:49 PM   #274
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Private Chinese airline targets Southeast Asia market
17 March 2005
(c) 2005 Xinhua News Agency. All Rights Reserved

KUNMING, March 17 (CEIS) -- The head of Ying'an Airways, a private airline based in southwestern China's Yunnan Province, said here on March 16 that they will take the Association of Southeast Asian Nations (ASEAN) countries as their major target market.

The airline will launch its maiden flight in June. Its flights will link Yunnan to some major cities in Southeast Asia, said Li Guiying, chairman of the board of directors of Ying'an.

It owns Y12E luxury business planes. Such kind of the plane cancarry only 19 people. Ying'an aims to become the first "air taxi" in China, said Li.

Bordering Myanmar, Laos and Vietnam, Yunnan Province which boasts rich tourism resources will serve as a "bridge" for Chinese tourists to go abroad and for overseas tourists to visit China, said Li.

The enhancement of the economic relationship between Yunnan and the ASEAN member countries has offered more opportunities for the company's commercial flight, he said.

According to Li, Ying'an has already received opening air traffic invitations from many cities in the ASEAN countries and inquiries from domestic and overseas airline companies about cooperation.

To limit monopolies in the aviation industry, a regulation was recently issued by the State Council to permit private capital into the nation's civil airline sector, which was blocked to private capital over the past half of century.

China's first privately run airline, Okay Airways, launched its maiden flight on March 11 from its base at Binhai International Airport in Tianjin Municipality near Beijing.
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Old March 18th, 2005, 07:09 AM   #275
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Second Runway In Service At Shanghai's Pudong Airport
17 March 2005

SHANGHAI (AP)--A second runway has begun operating at Shanghai's Pudong International Airport, a measure aimed at relieving heavy congestion and advancing the city's goal of becoming a regional transportation hub for Asia.

Flights began Thursday on the new runway, located on reclaimed land east of Shanghai's city center and built to accommodate the Airbus A380 "superjumbo," the world's largest commercial jet.

The runway is also equipped with a system meant to allow planes to land in heavy fog.

Opened in 1999, Pudong was designed as a showpiece gateway to China's richest and most cosmopolitan city, and is connected to Shanghai's eastern financial district by the world's only commercially operating magnetic levitation train.

Before the second runway opened the airport was operating at capacity, handling nearly 500 flights a day carrying most of the more than 35 million passengers who flew to or from the city last year.

An older airport, Hongqiao, handles only domestic flights.

Shanghai, with a population of 20 million, is at the heart of one of China's areas of fastest economic growth. Pudong is planned to handle up to 80 million passengers a year by 2010, when a second terminal is due for completion.
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Old March 18th, 2005, 07:40 AM   #276
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China Girds Its Airlines For Global Competition
17 March 2005
Dow Jones Chinese Financial Wire
(From THE ASIAN WALL STREET JOURNAL) By Bruce Stanley

BEIJING -- While most Chinese relaxed during last month's Lunar New Year holidays, Air China's chairman, Li Jia Xiang, tucked into an 86-page report on the bankruptcies of major U.S. and European airlines. As head of China's unofficial flag carrier, he had compiled the study to learn from the fatal mistakes other carriers have made in an industry buffeted by high fixed costs, excess capacity and stiffening competition.

The verdict? 'Maybe it will be unending research,' Mr. Li says.

China's airlines are flying up a steep learning curve. Beijing is trying to strengthen the country's three major state-controlled carriers -- Air China, China Eastern Airlines and China Southern Airlines -- through deregulation. It hopes to prepare them for the international competition that China's air-service agreements with the U.S. and other nations will bring. With economic growth of 9.5% last year, China needs an efficient airline network to transport passengers and goods and to meet the standards of foreign business travelers. Yet, without the cushion of state support, some carriers could falter.

'It's a pretty tall order,' an analyst says. 'I don't think there's any room for failure. [The airlines] are absolutely critical to the development of their own regions.'

That balancing act was evident Wednesday, when the share prices of Air China and Cathay Pacific Airways, the highly profitable carrier based in Hong Kong, jumped after a local newspaper reported the two were in merger talks. The parties denied that their talks were as advanced or comprehensive as the report suggested. But since Cathay, which last year took a 10% stake in Air China, needs access to the mainland market, and Air China needs the global routes and management expertise of a Cathay, a deal made sense to investors.

In fact, a significant cross-shareholding pact involving the two carriers and Hong Kong-based Dragonair is likely soon, and Air China would then stride out ahead of its two mainland rivals. That could force China Eastern and China Southern to seek foreign partners of their own -- the best bets being Taiwan's China Airlines and Eva Air, says Timothy Ross of investment bank UBS. 'It would be natural,' he says. 'There's a cultural and geographic fit.'

China's three big airlines have undertaken a juggling act, forced to increase their operations, both at home and abroad, even as they integrate the smaller domestic carriers they acquired in mergers that Beijing directed to consolidate the industry. A serious stumble by any of them could have a broader impact on the economic growth that feeds them passengers and cargo.

Aviation is hardly the only Chinese industry going through rebirth pangs, as China's World Trade Organization obligations kick in year by year. The Chinese retail sector is changing as Wal-Mart Stores Inc. and other international players expand aggressively in China. In banking, Citigroup Inc., HSBC Holdings and others will be free to offer loans in Chinese yuan and retail banking services starting in 2007. Inevitably, Beijing will be watching the results of its work with the airlines, begun in 2002, as it opens up the other sectors.

Airline deregulation is following a similar pattern, though outside the WTO's ambit. As with the other industries, vestiges of central planning linger. For example, China's airlines must buy most of their jet fuel at fixed prices from a government agency and can hedge only the fuel needed for overseas flights. They also struggle with such obstacles as military constraints on domestic air space. Chinese commercial aircraft must fly each route at a predesignated altitude even if they could save fuel by flying higher or lower.

'It's kind of like a railroad. You have to stay on the track, and you can't get off. It's a very backward phenomenon,' said Wu Rongnan, president of the regional carrier Xiamen Airlines.

If China's airline deregulation has its risks, it certainly has demonstrated rewards as well. In the space of just three years, Beijing has transformed a welter of ramshackle and unprofitable state-owned carriers into one of the country's most dynamic industries and a powerful force in global aviation. The three biggest airlines have all issued shares and are moving fast to modernize their fleets. Aircraft manufacturers are lavishing attention on what they see as the world's fastest-growing market for passenger jets. The number of air passengers in China as a percentage of total population is less than 4% of what it is in most developed countries.

But the competitive vise is tightening. U.S. heavyweights Continental Airlines and American Airlines last month became the latest foreign carriers approved to fly to Chinese cities. Under a pact the U.S. and China reached in June, the number of flights between the two countries will multiply almost fivefold by 2010.

At the same time, smaller Chinese carriers are carving out profitable niches on regional routes, and four new privately owned Chinese airlines plan to offer limited domestic service of their own.

That is why Air China's Mr. Li is studying every angle. The company sees improved service, especially in the more profitable front end of its planes, as the best way forward. Last year it earmarked 700 million yuan ($84.6 million) for cabin improvements such as fully reclining seats in first and business classes for its long-haul flights.

Air China has reserved two planes for the exclusive purpose of training pilots and is building databases to monitor each trainee's progress, while Cathay has started teaching Air China flight attendants to be more attentive to passengers. Air China also plans to double its number of freighter aircraft to 10 by the end of next year and is considering possible membership in an international marketing alliance, Mr. Li says.

As the foreign airlines and local upstarts rev their engines, cross-turf rivalry among China's big three remains restrained. But Michael Chan of BOC International, the Bank of China's investment-banking unit, says he expects to see full-blown competition erupt at home within the next three years.

'There are enough passengers to carry' right now, he says. 'They don't have to go after one another's business -- not yet.'
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Old March 18th, 2005, 08:34 AM   #277
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Thai AirAsia to enter China
18 March 2005
Business Times

THAI AirAsia will become the first low-fare, no-frills airline in Asia to gain entry into China when it commences services between Bangkok and Xiamen on April 25.

The airline, which is the sister company of AirAsia Bhd, is offering 8,888 seats at a special launch fare of 1,899 baht (100 baht = RM10.07) for one-way trip (excluding airport taxes and fees) on the route. The fare is good for travel from April 25 to October 29 2005.

Seats for the newly-launched Bangkok-Xiamen flights will be available for sale from March 18. Regular low fares for Bangkok-Xiamen will start from 2,499 baht (one way, excluding airport taxes and fees).

Thai AirAsia chief executive officer Tassapon Bujleveld said the airline "is not just a low-fare airline. We aspire to be bridge builders".

"Thai AirAsia can be an excellent vehicle to foster ties and promote tourism, build new economic relations and enrich the cultural exchange between Thailand and China," he said in a statement released in Kuala Lumpur.
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Old March 18th, 2005, 09:39 AM   #278
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US authorities approve Continental Airlines flights to China
18 March 2005

WASHINGTON (AFX) - US authorities gave final approval to a proposal by Continental Airlines to operate flights between the United States and China, allowing seven weekly passenger flights.

The rights will become available on March 25 for a new daily trip between Newark, New Jersey, and Beijing, the Department of Transportation said in a statement.

The new rights were made available by the US-China aviation agreement signed July 24 providing for an increase in weekly US-China flights for each country's carriers from 54 to 249 over six years.

The agency also tentatively awarded US-China rights to several other airlines that become available March 25, including a proposal to name American Airlines as a new entrant in the China market next year with approval to operate seven weekly passenger flights.
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Old March 18th, 2005, 04:52 PM   #279
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Fledgling airlines face uphill struggle for China take-off
Dominant state carriers block the flight path of the mainland's three new private operators

17 March 2005
South China Morning Post

For the chairman of one of China's three new private carriers, his model is Southwest Airlines - the world's first budget carrier and the only major airline in the United States to make a profit last year.

"Our target is to be the Southwest Airlines of China," said Wang Zhenghua, chairman of Shanghai-based Spring International Airlines. "Aviation has changed from a luxury product into a mass product. Our market is the low-cost tourist and business traveller."

Fine words but this is Communist China, not Republican America, and many obstacles block the way of the three babies as they take on the five state-owned groups that dominate the industry in the mainland.

They have limited capital, not enough to buy a single new Airbus, and will have to lease their planes. They are struggling to hire qualified staff, especially pilots, and operate in a highly regulated environment that strongly favours state firms.

"We will ensure that state-owned capital dominates the aviation sector," Ma Zheng, deputy director of the policy and regulation department of the General Administration of Civil Aviation of China (CAAC), told a national conference last month.

They will have to buy fuel from a state monopoly supplier and overcome suspicion among a public likely to prefer the security of a state carrier they know over the uncertainty of a new boy, even if he offers a price 20 to 30 per cent lower.

In October, in response to pressure from the state airlines whose staff was being poached, the CAAC announced that any pilot who left an employer would have to wait six months before they could start work with a new one, while the necessary checks were carried out on his ability to fly.

Nevertheless, a new era in China's aviation history began last Friday, when a Boeing 737-900 of Okay Airlines made its inaugural flight from its base in Tianjin to Kunming in the first private operation of the communist era.

The decision of the CAAC to open this lucrative industry to the private sector is a sign that the existing state-owned carriers cannot keep pace with the storming demand and is in line with the government's commitments to the World Trade Organisation.

Last year, the industry flew 121 million passengers, a rise of 38.1 per cent over 2003, and 2.7 million tonnes of cargo, up 23.3 per cent, and everyone expects annual growth in double digits for the foreseeable future. China has more than 100 airports, most of them greatly under-utilised.

The private companies which received a licence from CAAC last year include Okay, Spring and United Eagle Airlines (UEA), based in Chengdu, capital of Sichuan.

Of the three, Spring looks the most promising, because it has as its base one of China's biggest travel agencies, with an annual turnover of two billion yuan, 1.6 million customers and 38 subsidiaries, seven of them abroad.

Until recently, it had chartered planes belonging to state airlines but will now be able to use its own, retaining that profit margin it had been paying to other airlines.

It plans to lease three planes and fly them for 11 to 12 hours a day to tourist cities across China, with passenger loads of at least 85 per cent. It will sell 70 per cent of tickets through its 450 offices in Shanghai and adjoining provinces of Jiangsu and Zhejiang and 30 per cent over the internet and telephone.

Spring sees as its market the 100 million who live in east China and is targeting people who want low-cost business and leisure travel.

It announced the award of its licence from the CAAC on June 8 last year, 33 years to the day after the foundation of Southwest Airlines in Dallas, Texas.

Southwest has posted a profit every year since then, last year carrying 71 million passengers on 417 Boeing 737 planes which fly about 12.5 hours a day.

China Business News this week reported that Spring could not recruit enough pilots and was facing lawsuits from carriers, whose pilots it had hired, who wanted large sums in compensation for the money they had spent training them. Spring officials were unavailable for comment.

UEA has more modest ambitions. It plans to serve cities within one hour's flying time of its base in Chengdu with planes of less than 100 seats, to complement the major airlines. A company official said it planned to make its inaugural flight at the end of next month, subject to regulatory approval.

It plans to buy three 40 to 50-seat ERJ planes made by Empresa Brasiliera de Aeronautica, the world's fourth-largest aircraft maker.

It will compete head-on with Sichuan Airlines, a state company set up in 2002 as a local carrier from Chengdu and which now has monthly revenue of 180 million yuan.

UEA's president is Zu Kai, who in her 14 years at Northwest Airlines, worked as general manager of the airline's international department at the company's Detroit headquarters. "I did not come for the money," she said. "I wanted to do something for aviation in China."

The company, which has registered capital of 80 million yuan, is owned by three shareholders, of whom the largest is Li Jining, a native of Guangdong who made his fortune in the information technology business.

Headquartered in Tianjin, Okay Airways has registered capital of 300 million yuan and will focus on domestic cargo and express services, passenger charters and ground distribution. Last month, it took delivery of its first of two Boeing 737-900s sub-leased from Korean Air. The planes belong to Boeing's finance unit, Boeing Capital Corp.
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Old March 19th, 2005, 05:57 AM   #280
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China Eastern Agrees To Buy 5 Airbus A319 Aircraft
18 March 2005
Dow Jones Chinese Financial Wire

China Eastern said it plans to take delivery of the five aircraft between February 2006 and July 2007. The aircraft will be used mainly for domestic flights, according to the statement.

The Chinese airline said it will primarily use bank loans to finance the deal. The purchase will raise its liability-to-asset ratio in the short term, but won't affect its cash flow or operations, it said.

The deal requires regulatory approval, the statement said.

Chinese carriers have increasingly divided their purchases between Airbus and Boeing Co. (BA) after years of dominance by Boeing. China is expected to have the fastest-growing demand for passenger jets over the next 20 years, becoming the world's No.2 market after the U.S.

Earlier this month, an Airbus executive said the company expects China will need to place orders totaling $230 billion to meet demand for 1,790 passenger and cargo aircraft over the next two decades.

Airbus is a joint venture between European Aeronautic Defence & Space Co. (5730.FR) and BAE Systems PLC (BA.LN).

- By Jeff Meyer
(Linda Lin contributed to this article.)
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