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Old May 26th, 2005, 03:40 AM   #401
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Competition mechanism to be let in China’s civil airport service
25 May 2005
Xinhua's China Economic Information Service

BEIJING, May 25 (CEIS) – China plans to introduce market competition mechanism into the civil airport service sector, according to Sha Hongjiang, an official of the Civil Aviation Administration of China (CAAC).

Sha said at a forum on communication technology and management here on May 25 that through the introduction of market competition, cargo owners and passengers will have a say on the service quality of the service suppliers at China’s civil airports, and also have the power to choose the suppliers they favor.

So, there should be multiple candidates to provide services at civil airports under the new system, he said.

The service suppliers involved in this reform plan will include retailers at airport lounges, ground service suppliers and food aboard providers.

At present, all the 160 civil airports in China are managed by the local government except the Beijing Capital International Airport and the Tibet Airport.
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Old May 26th, 2005, 03:45 AM   #402
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Siemens wins contract to supply baggage handling system at Beijing airport
May 25, 2005
AFP

Siemens has secured a contract worth 170 million euros (214 million US dollars) to supply a baggage handling system for a new terminal at Beijing airport in preparation for the 2008 Olympic Games, the German firm said Wednesday.

The baggage handling system, due to be completed in 2007, is expected to accommodate 330 check-in desks at the new Terminal 3 complex, it said in a statement released here.

"When completed, the Siemens baggage handling system will help to speed up ground handling related processes for arriving, departing and connecting passengers and enable short minimum connecting times," Siemens said.

Beijing's airport is undergoing a three-billion-dollar expansion as part of the city's preparations for hosting the Olympic Games in 2008.

The expansion work includes the construction of a third runway that will be 3,800 metres (12,540 feet) long and 60 metres (198 feet) wide, as well as a new terminal building.

A modern 25-kilometre (15.5-mile) railway and another expressway to connect the airport to the city will also be built.
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Old May 26th, 2005, 04:40 PM   #403
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China Eastern Airlines to suspend Oita-Shanghai flights
26 May 2005
Kyodo News

China Eastern Airlines told the Oita prefectural government Thursday that the company will suspend flights between the southwestern Japanese city and Shanghai from June 2 through Sept. 12, excluding the summer holiday season.

The Chinese airline's Oita branch said the suspension of the twice-weekly round-trip flights is due to a number of cancellations of reservations following a series of anti-Japan demonstrations across China in April.

The fallout from the rallies is expected to result in the cancellation of a maximum of five round-trip flights this month and no upturn is anticipated next month or later, it said.

China Eastern Airlines said it will operate as usual on the route for a one-month period until Aug. 25 as reservations have been made by tourists traveling in groups.
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Old May 27th, 2005, 03:53 PM   #404
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HK CNAC Denies Role In US$800 Mln China Aviation Fund
27 May 2005

HONG KONG (Dow Jones)--China National Aviation Co. (1110.HK) Friday denied a report that it is seeking investors to participate in a US$800 million infrastructure fund that will be used to accelerate the development of the mainland's aviation industry.

"CNAC is not participating in this deal," Chairman Kong Dong told reporters after CNAC's annual general meeting. However, he didn't rule out that its major shareholders may be involved. The Hong Kong-listed company is the largest shareholder in Hong Kong Dragon Airlines Ltd., or Dragonair.

CNAC is 69% held by China's national flag carrier Air China Ltd. (0753.HK), which in turn is controlled by state-owned China National Aviation Holding Co.

Meanwhile, Dragonair Chief Financial Officer Francis Wai said during CNAC's shareholders meeting that oil cost accounted for 22% of Dragonair's total cost in the first four months of this year, reflecting the 40% on-year surge in oil prices.

Separately, Cathay Pacific Airways Ltd.'s (0293.HK) spokeswoman said its oil cost accounted for over 30% of its total costs so far this year.

Dragonair's costs are lower than that of Cathay's as they have both short-haul and long-haul flights, Wai said. "Our flights are mainly short-haul," he said.

Wai said oil hedging activities and fuel surcharges imposed on passenger flights would reduce the impact on Dragonair from high oil prices, but couldn't fully offset it.

The Civil Aviation Department said Friday it has approved applications by Dragonair to increase fuel surcharges on passenger fares to HK$86 from HK$42 per passenger for each leg of a flight.
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Old May 28th, 2005, 06:36 PM   #405
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China to further open civil aviation to private and foreign capital - report
27 May 2005

BEIJING (AFX) - China will open its civil aviation industry further to foreign and private investors, the Securities Times reported.

The newspaper cited Yang Yuanyuan, director of the General Administration of Civil Aviation of China (CAAC) as saying: 'Various important sectors of China's civil aviation, including flight rights arrangements and aviation and air traffic bilateral relations, will be open to the capital market in an active, orderly and gradual manner.'

No further details were provided.

China launched regulations in August 2002 to allow foreign investors to hold up to a 49 pct stake in local carriers, with the maximum stake by a single investor capped at 25 pct.

In February this year, China formally unveiled regulations allowing domestic and foreign private entrepreneurs to move into the aviation sector, which was previously limited to government companies.
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Old May 29th, 2005, 02:31 AM   #406
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China identifies boy in fatal fall from plane as 16-year-old migrant worker
28 May 2005

BEIJING (AP) - Investigators have identified a boy who fell to his death after trying to stow away in a Chinese jetliner but don't know why he boarded the plane, news reports said Saturday.

The 16-year-old boy fell from the undercarriage of a China Eastern Airlines plane after it took off Wednesday from the city of Dunhuang in China's desert northwest.

The boy, identified as Li Dechao, was from China's southwestern province of Sichuan but moved to Dunhuang in 1998 to work for a relative, the Xinhua News Agency and other media said.

The relative lost contact with Li on May 19 and didn't see him again until he was called to identify the body at a hospital, Xinhua said.
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Old May 29th, 2005, 06:32 PM   #407
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Air Canada Increases Shanghai Service to Five Times a Week
Will Introduce Prime Time Transcon Freighter Service

MONTREAL, May 25 /CNW Telbec/ - Following the successful launch of all-
cargo services between Toronto and Shanghai on May 15, 2005, Air Canada today announced its plans to introduce prime-time freighter service between Toronto and Calgary as it increases its Canada-China cargo flights from three to five times weekly. The new services will link Alberta to the rapidly expanding Chinese market using an MD-11 freighter aircraft capable of carrying 84 tonnes of cargo.

Air Canada plans to offer five flights per week (except Friday and Saturday) Toronto-Shanghai effective June 20, 2005. All flights are planned for a prime night time departure from Toronto of 23:30 hours. The carrier intends to operate four of the weekly flights (Monday through Thursday) via Calgary providing much needed additional cargo capacity in the key Ontario to Alberta market as well as linking Alberta to the Chinese market. Start-up date for the Calgary service is yet to be determined.

The service will further capitalize on the recently negotiated Canada-China bilateral air services agreement by linking the Alberta market to Shanghai, one of the fastest growing cities of the world. This expansion of cargo services is subject to Air Canada receiving all necessary approvals. "The strong customer response to our new Toronto-Shanghai all-cargo service provides us with the exciting prospect of introducing prime-time wide-body scheduled cargo service between Toronto and Calgary while expanding dedicated freighter services to Shanghai from our main Toronto hub," said Claude Morin, vice president cargo for Air Canada. "The new flights linking the Ontario and Alberta markets represent Canada's first ever domestic wide-body scheduled cargo service while the Calgary-Shanghai link will improve access from Alberta to the rapidly expanding Chinese market."

Garth Atkinson, President and CEO of The Calgary Airport Authority commented, "We are pleased that Air Canada will provide our shipping community with direct access to the emerging Chinese market from Calgary. As Calgary is consolidating its position as Western Canada's international logistics hub, we would like to thank Air Canada for recognizing Calgary's potential and for helping us make our region more competitive on a global scale."

Air Canada provides scheduled and charter air transportation for passengers and cargo to more than 150 destinations on five continents. Canada's flag carrier is the 14th largest commercial airline in the world and serves more than 27 million customers annually. Air Canada is a founding member of Star Alliance providing the world's most comprehensive air transportation network.
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Old May 30th, 2005, 01:37 AM   #408
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Continental to Fly Newark-Beijing (Non-Stop) in June 2005
New York (03/18/2005) -- Continental Airlines has received final approval from the U.S. Department of Transportation (DOT) to begin service to Beijing, China from Newark Liberty International Airport.

Daily nonstop service will begin June 15 and will be operated by a 283-seat Boeing 777-200ER, 48 in BusinessFirst and 235 in coach.

Tickets will be available soon through all distribution channels.

Continental will be the only U.S. carrier offering daily nonstop service from New York to the People's Republic of China. (Air China offer another choice when you fly from NYC to Beijing non-stop in JFK, this has started on 2002 already, now you have another offer to Beijing non-stop from my favorite NYC;-)

The 13-hour flight (CO 89) will depart Newark, subject to government approval, at noon, arriving in Beijing at 1:50 p.m. the next day. The return flight (CO 88) will leave China at 3:50 p.m., arriving in the US 13 hrs. 25 minutes later at 5:15 p.m.

"The Beijing route holds exceptional long-term promise since it connects the world's fastest growing economy with the financial center of the U.S.," said Continental Chairman and CEO Larry Kellner. "Our new flight to China will offer our award-winning BusinessFirst service and will feature vast connecting opportunities from our hub at Newark Liberty."

Kellner thanked the Transportation Department for expeditiously awarding Continental the route and for negotiating the bilateral agreement that opened the door for new competition to serve China.

Continental Airlines is part of SkyTeam alliance, you can choose to earn and redeem Continental OnePass, Delta SkyMiles or Northwest WorldPerks mileages.

Air China started to fly from JFK in NYC to Beijing on 2002, this time Continental's non-stop flight from Newark will benifits a lot of professionals who works in NYC and lives in Jersey side ;-)
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Last edited by ChinaboyUSA; May 30th, 2005 at 01:43 AM.
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Old May 31st, 2005, 07:04 PM   #409
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Chinese airlines prepare for foreign challenge
Fragmented industry has been consolidated into three main groups - now they must integrate businesses at an operational level
By JUSTINE LAU and ANDREW YEH
30 May 2005
Financial Times

When China Eastern, one of the country's largest carriers, announced it was buying two regional airlines from its state-owned parent for nearly HKDollars 1bn (USDollars 129m) this month, there was little fanfare.

This was despite the fact that the announcement, contained in a routine statement to the Hong Kong stock exchange, effectively signals the completion of the most ambitious shake-up in the history of China's fragmented aviation industry.

This is the consolidation of the country's nine biggest airlines into three mega-groups, headed by China Eastern, China, China Southern and Air China, that together fly four out of every five passengers in China.

Now the airlines face the daunting task of consolidating their new businesses at the operating level, including in terms of routes and aircraft fleets, quickly enough to meet growing competition from smaller domestic airlines and international rivals.

The industry restructuring was ordered in 2002 by Beijing, which was keen to reduce unprofitable competition among the numerous state-owned airlines by creating three strong home carriers.

After a delay caused by the outbreak of severe acute respiratory syndrome in 2003, which devastated tourism in the region, Air China became the first to complete consolidation (before its listing last year), followed by China Southern last November and China Eastern two weeks ago.

Derek Sadubin, general manager at the Sydney-based Centre for Asia Pacific Aviation, says it could take two to three years for any beneficial effects from the mergers to reach the carriers' bottom lines.

The carriers, however, need to speed this up, he says, as China's airspace is already much more crowded today than it was even three years ago.

Internally, Beijing is liberalising the industry and encouraging greater competition among the regional airlines such as the successful Hainan Airlines and Shenzhen Airlines, which are based in southern China.

This week, Air China lost a bid to raise its stake in Shenzhen Airlines, paving the way for more domestic competition. China is also licensing more start-ups including Okay Airways, the first privately owned carrier.

"The (big) airlines need to get their act together," Mr Sadubin says.

Meanwhile, the big three are also stepping into each other's main markets. Air China, China Eastern and Shanghai Airlines, the country's fifth largest carrier, this year received approvals to build hubs in Guangzhou, where China Southern is based.

And the trio have not stopped competing on prices. Although the government retains rights to set ticket fares, individual airlines are able to offer discounts of between 30 and 80 per cent, according to Michael Chan, analyst at BOC International. "Airlines in general are price takers. In China, their pricing power is even lower because of the rising competition. That's why they need to lower their costs," says Mr Chan.

Internationally, as China continues to open its skies, low-cost and full-service airlines are making inroads into the country on hopes demand from China will continue to grow rapidly.

The International Air Transport Association has forecast that outbound international passengers from China will grow by 12.5 per cent annually from 21.9m in 2003 until 2008.

China's mega-airlines are aware of the challenges. When it announced its acquisitions this month, China Eastern said international alliances including Star Alliance and One World, were putting "significant pressure" on some local carriers through code-sharing agreements with rivals.

Martin Lin, head of the aviation committee under the American Chamber of Commerce in Beijing, expects US-based carriers to have a larger share of the growing cross-Pacific traffic, as more US travellers are expected to visit China than Chinese the US in the years ahead.

Karen Chan, analyst at CSFB, says any competition to bring passengers in and out of China will have the biggest impact on Air China, as 50-60 per cent of its passenger traffic is international, well above China Eastern's 30-35 per cent and China Southern's 15 per cent.

But while industry consolidation may help fend off competition from foreign players, ultimately, analysts say the Chinese airlines will need to raise efficiency to take on their international rivals.

To bring management and service up to international levels, Air China enlisted Cathay Pacific as a strategic investor last year and announced last week a code-sharing agreement with the Hong Kong carrier. China Eastern is now also looking for a partner.

The era of consolidation may be over, but for China's airlines, the hard work has only just begun.
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Old June 1st, 2005, 07:16 AM   #410
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Soaring Sector
By MAO LIJUN
30 May 2005
China Business Weekly

China will replace Japan as the No 1 market in Asia-Pacific for DHL Express, one of the world's leading express and logistics companies, by the end of this year or early next year.

China remains the key market for DHL Express, and a significant growth engine for DHL's business in Asia-Pacific.

With annual revenues in excess of 24 billion euros (US$30.96 billion) last year, DHL, 100-per-cent owned by Deutsche Post World Net, is a global giant in the international express and logistics industry.

The firm specializes in the provision of innovative and customized solutions.

DHL Express on April 20 forecasted its revenues would grow 50 per cent this year.

"Currently, Japan is No 1 in Asia-Pacific, but based on our growth projections ... revenues from China should overtake Japan late this year or early next year. China will become the No 1 market in the region," Ross Allen, DHL Express' senior vice-president in Asia, tells China Business Weekly.

DHL last year earned US$3.4 billion in revenues in Asia, compared with its US$1.4 billion investment in China.

"We will continue to invest in China, in infrastructure and systems, to ensure people receive best-in-class services," Allen says.

Due to strong customer demand, China's air express market will continue to grow 30-35 per cent per year for the next three years. That will be three times the global average growth of 11.2 per cent.

Zhang Zhiqiang, Chinese vice-minister of commerce, says China will put more effort into building its modern logistic system.

China has opened up the logistics industry in accordance with its promises to the World Trade Organization. Many famous foreign logistics companies have entered China, including DHL, FedEx, Maersk and Panalpina.

According to statistics from Ministry of Commerce, logistics related spending in China ac***** more than 20 per cent of the nation's GDP, about twice the figure of developed countries.

Zhang says China is willing to deepen the co-operation in the logistic sector.

That will present both opportunities and challenges to DHL Express.

To ensure customers' requirements are met, DHL must continue expanding its air services in China.

DHL Express operates aircraft where required services and cost levels cannot be achieved through commercial carriers.

On April 20, DHL Express introduced, in Shanghai, two direct overnight express services-between Beijing and Hong Kong and between Shanghai and the United States.

The new flights will bring a new dimension of connectivity for consumers and businesses in China, and will offer seamless connections from the world's fastest-growing economy to Asia and the United States.

The daily Shanghai-US flight will be operated by Northwest Airlines, with a Boeing 747-200 freighter aircraft. The four-times-a-week service from Beijing will utilize a Cathay Pacific A330-200 passenger aircraft from DHL's Central Asia Hub in Hong Kong.

The China-US route connects Shanghai with Anchorage, in Alaska, and then with DHL's hubs in Cincinnati and Los Angeles, which feed into DHL's US network.

Shanghai is also connected, directly, with DHL's Central Asia Hub in Hong Kong, via a flight between Hong Kong and Shanghai, which is operated by Dragonair.

The new, direct flights underscore DHL's commitment to providing the most extensive air network possible for customers in China.

Besides Beijing, DHL also offers direct connections to Shanghai, from Hong Kong, and connects Guangzhou and Shenzhen by road to Hong Kong.

With the addition of the new flights, DHL customers will benefit from later pick-up and cut-off times and earlier delivery times.

Jerry Hsu, DHL Express' president for Greater China and South Korea, says: "This new development will position DHL to respond to the tremendous growth in demand for express services, driven in part by a surging Chinese economy.

"The new Shanghai-US service belies our confidence in China, which today is one of the fastest-growing markets in DHL's global network, registering an annual growth rate of 50-60 per cent in 2004."

The addition of the two new services brings to 27 the total number of destinations served by DHL's dedicated air network.

In Asia-Pacific, DHL currently operates more than 20 aircraft in dedicated express freighter operation, and uses more than 800 commercial flights per day, which serve 27 destinations in 16 countries

The aircraft utilized for the two new services increase the number of aircraft serving DHL's existing dedicated air operations in the region to more than 20.

That allows DHL to connect nations' capitals and other major business centres with the firm's regional hubs and gateways, which will provide DHL's customers with overnight services across Asia-Pacific.

Introduction of the new services follows the recent addition of a new, dedicated overnight express service between Nagoya, Japan and Hong Kong.

The company's joint venture, DHL-Sinotrans, is the market leader in China, with a 40-per-cent share of the express-delivery market.

The company, which has been operating in China for almost 20 years, has embarked on a five-year, US$273-million strategic-investment programme as part of a wider initiative to reinforce its market leadership as an integrated, "one-stop" provider of supply chain solutions in China, with both international and domestic offerings.

"Our five-year strategic-investment programme will cover more handling capacity, develop Shanghai as China's hub, and expand by three times current capacity by 2008," says Wu Dongming, general manager of DHL-Sinotrans.

DHL-Sinotrans plans to hire 2,000 employees and use 1,200 delivery vehicles in China this year.
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Old June 1st, 2005, 07:20 AM   #411
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Lufthansa to boost China flights to 41 weekly - Xinhua
31 May 2005

BEIJING (AFX) - Deutsche Lufthansa AG will boost its service between Germany and China, including Hong Kong, to 41 weekly flights from this summer, Xinhua News Agency reported, citing company sources.

The report did not say how many flights Lufthansa currently operates.

Without providing a start date, the report said from this summer Lufthansa will fly daily from Beijing, Shanghai, Guangzhou and Hong Kong to Frankfurt as well as from Shanghai to Munich.

Flights from Beijing and Hong Kong to Munich will rise to three per week, Xinhua said, without giving current flight frequencies.

Citing Gregor Wende, chief representative of Lufthansa China, Xinhua said Guangzhou has become the fourth most popular Chinese destination for Lufthansa after Beijing, Shanghai and Hong Kong.

Lufthansa said earlier this year that it would operate 149 flights to and from the Asia-Pacific region from summer 2005, an increase of 3.5 pct compared to its summer schedule of 2004.
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Old June 1st, 2005, 07:46 PM   #412
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BA flies into crowded Shanghai skies
Inaugural flight to Pudong airport today launches British carrier's Greater China expansion amid tight competition
Russell Barling
1 June 2005
South China Morning Post

British Airways (BA) will enter the crowded skies over Shanghai today when its inaugural flight from London lands at Pudong International Airport, the first giant step in an overall expansion of its Greater China services.

Britain's busiest carrier will fly five times a week between London and Shanghai, joining airlines such as Virgin Atlantic and China Eastern on the increasingly competitive route.

"Shanghai is an important step for us," BA chief executive Rod Eddington said.

"It is, and will be, a fiercely competitive market. There is an enormous amount of extra capacity being put into Shanghai from all over Europe and it is natural that our competitors will try to feed ex-UK traffic through their hubs," he said.

"With the competition on the Shanghai route as strong and dense as it is, it is a good sign the potential is solid and that bodes well for our business prospects," said Fernando Suarez, general manager for Greater China and the Philippines.

"Being late into the market, we are realistic and we know it will be a hard ride. It will require being dynamic on the pricing front."

BA displayed some of that "dynamism" in the lead-up to the launch, offering economy class seats for less than 4,000 yuan throughout April for use before the end of September.

Premium class seats are offered two for one until the end of this month for use until the end of the year.

BA will also follow the lead of Cathay Pacific and expand on Friday its Hong Kong-London service to thrice daily while boosting its Beijing-London service to six days a week.

Competition is likely to be fierce on all three routes. But the carriers are hoping that the recent easing of travel restrictions on mainland citizens visiting Britain and Europe - known as the Approved Destination Status (ADS) - will generate a healthy expansion of ex-China passengers.

"ADS is an important step forward in improving the flow of passengers between China and the UK," Mr Eddington said. "It won't be a flood at first, but it is an essential step in guaranteeing long-term traffic flows on that route."

There is scope for optimism - Australia saw a 94 per cent jump in China inbound traffic in the three years after being granted ADS - but the smart money is on a slow expansion rather than a big bang.

Speculation that Britain's new status would bring an immediate flood of Chinese shoppers to London's cobblestone streets was premature, the European Tour Operators Association (ETOA) said.

"It is excellent news that the UK has gained ADS status and is now open to tourists from China," ETOA executive director Tom Jenkins said. "But this is not the beginning of a bonanza. Chinese consumers are not affluent and are extremely price-sensitive."

In many respects, the clamps remain on the Chinese leisure travel market, in part at the request of an apprehensive British government.

Only 4.5 million Chinese citizens held their own passports - and were therefore free to travel overseas - at the end of last year.

Under ADS, the rest can only request single-trip visas and can only travel as part of a tour group from an approved agency. For them, no independent leisure travel is allowed. "Visas are the single biggest obstacle to the growth of the market right now," Mr Suarez said. "The current situation is blocking the enthusiasm that is out there."

The number of Chinese citizens with permanent passports is expected to rise to seven million by the end of next year, the ETOA said.

"The Chinese market, although potentially vast, is actually a very, very small market at present and will take many years to build," Mr Jenkins said. "Ireland got ADS last year [February] and in one year they've had 19 people come over."

However, the market between Hong Kong and Britain is vibrant.

The London route, which Cathay has served thrice daily for almost two years, is showing strong demand for business and leisure-class seats this year, with volume growing a comparative 18 per cent in the first four months to more than 487,000, according to the Airport Authority.

"Healthy load factors have been sustained on that sector on a long-term basis," Mr Suarez said. "The Hong Kong market has not seen the last word in terms of potential."
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Old June 1st, 2005, 11:50 PM   #413
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Shanghai Airlines shareholders approve purchase of nine Boeing B787 aircraft
01 June 2005

BEIJING (AFX) - Regional carrier Shanghai Airlines Co Ltd (SHA 600591) said its shareholders have approved a proposal to buy nine B787 aircraft from Boeing Co.

The airline said earlier that the catalog price for a B787 is 120 mln usd and it expects to gradually take delivery of the 787s within the five years starting from 2008.

Separately, Shanghai Airlines said its proposal to seek a one-year loan of 200 mln yuan from Shanghai Alliance Investment Ltd, a state-owned investment firm, has also been approved by its shareholders.

No further details were provided.

Shanghai Airlines said several days ago that it has postponed a plan to raise 600 mln yuan via a 150 mln yuan-denominated shares issue, mainly due to the country's slumping stock markets.

Shanghai Airlines booked a 49.38 mln yuan loss for the first quarter, compared with a 47.08 mln net profit a year earlier on the back of higher jet fuel costs.
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Old June 2nd, 2005, 07:49 AM   #414
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China rejects request for fuel surcharge on domestic flights - report
1 June 2005

BEIJING (AFX) - China's aviation authority has decided against imposing a surcharge on domestic flights to compensate for rising jet fuel costs, state media said.

The General Administration of Civil Aviation of China will keep its current ticketing policy unchanged, according to the People's Daily.

Airlines will be able to apply for jet fuel surcharges on international flights, however, the newspaper said.

Domestic airlines had proposed a jet fuel surcharge of 10-20 pct.

The report gave no further details on the decision.
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Old June 2nd, 2005, 06:59 PM   #415
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June 2, 2005
Star Alliance in talks with Air China as possible new member

(Kyodo) _ Star Alliance Chief Executive Officer Jaan Albrecht said Thursday the international group of air carriers has been negotiating with Air China as a possible new Star Alliance member.

In a press conference at Chubu Centrair International Airport near Nagoya, Albrecht also announced Swiss International Airlines as a new alliance member following South African Airways that was accepted recently.

Star Alliance will thus have 18 airlines to run 16,000 flights daily, serving 846 cities in 151 countries, he said.

The alliance is trying to expand its membership to counter other international airline groups like SkyTeam and oneworld, as well as Japan Airlines, which does not belong to any group. In Japan, All Nippon Airways has joined Star Alliance.
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Old June 3rd, 2005, 12:30 AM   #416
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China Southern pulls out 500m yuan
3 June 2005
Hong Kong Standard

China Southern Airlines, the country's largest carrier by fleet size, has pulled out 500 million yuan (HK$472 million) it placed at a Chinese brokerage for investment _ two months before the asset management agreement expires _ because of a plunging stock market.

The agreement with Centergate Securities of Beijing is supposed to last until July 26, and China Southern had expected to reap an investment return of at least 6 percent. At the end of May, return was 12.9 million yuan, China Southern said, or about 2.6 percent of its investment.

"In view of the current conditions of the PRC domestic stock market ... Centergate and the company had mutually agreed to the early termination of the assets management agreement," China Southern's company secretary Su Liang said.

China's slumping stock markets worsened recently after the government launched a trial program to sell down state-owned shares in listed firms. The Shanghai Composite Index fell to an eight-year low Thursday.

Shares of China Southern gained 1.96 percent, or HK$0.05, closing at HK$2.60 Thursday. Still, the stock has dropped 15.45 percent so far this year as the airline's earnings were hammered by rising fuel costs.

China Southern announced the agreement to park the funds at Centergate in July 2004, drawing criticism from analysts who said the money would be better used to finance its expansion than betting on weak stock markets.

China Southern is seeking a loan of up to US$780 million (HK$6.08 billion) to finance the acquisition of as many as 14 aircraft, sources earlier said. The airline said in May it plans to spend at least US$2.64 billion for Boeing 737 jets to meet booming demand for air travel. It has placed orders for 45 planes so far this year, including five Airbus A380 superjumbos.

China Southern reported a surprise 2004 net loss of 48 million yuan, compared to analysts' expectations of a 584.5 million yuan profit. It lost 358 million yuan in 2003.
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Old June 3rd, 2005, 12:32 AM   #417
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BA sees profit for Shanghai link in three years
Mark O'Neill in Shanghai
3 June 2005
South China Morning Post

After starting a new five-day a week service from London to Shanghai yesterday, British Airways (BA) said that it expected the route to be profitable within three years but it would not open a service to another Chinese city in the short term.

BA's first new long-haul service since November 2002 landed at Pudong Airport and was met by Christopher Hum, the British ambassador to China. It takes the number of direct weekly flights on the route from five operated by a single carrier, Virgin Atlantic, up until the spring of last year to 15 operated by three, also including China Eastern Airlines.

The arrival of the new boy has set off a price war, with BA offering return economy fares of 3,990 yuan for a limited period, an offer matched by Virgin and China Eastern.

"Virgin went into profit in its fourth year on the London-Shanghai route," BA chairman Martin Broughton said. "As with other new routes, we do not expect to make a profit in the first year. We would expect to be profitable within three years."

Chief executive Rod Eddington said that, as with India, the mainland market was large enough for everyone. "BA is building its network around demand rather than supply." The carrier will start a London-Bangalore service in October.

Under the Sino-British air agreement, British carriers can fly to Beijing, Shanghai and four other Chinese destinations.

"We are focusing on our existing routes," said Mr Eddington. "We have increased the London-Beijing route from four to six times a week. We want that to be once a day - we need that frequency for the business market."

BA timed the launch of the route to coincide with the start of group travel by Chinese to Britain.

Under the Approved Destination Status (ADS) programme, mainland tour groups can book trips to Britain through approved travel agents. Britain was the last European Union country to agree to ADS with China. The first group is due to leave Shanghai in mid-July.

Tom Wright, chief executive of VisitBritain, who was on the inaugural flight, said that visits from China had more than doubled over the last five years to over 100,000, with spending up by 60 per cent.
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Old June 3rd, 2005, 12:42 AM   #418
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China to supply Boeing with plane parts worth 600 million dollars

BEIJING, June 2 (AFP) - Boeing Thursday announced that Chinese aviation firms have agreed to supply it with aircraft components worth an estimated 600 million dollars.

"It is worth 600 million dollars for the volume of all the contracts," Carolyn Corvi, vice-president and general manager of Boeing airplane production, said at a press conference here.

She did not say how many individual aeroplanes it involved.

"It will be the first time in our 30 plus year relationship with aviation manufacturers here in China that we have asked them to participate in a brand new program (for the 787s)," she added.

"It really is a great expansion of our relationship."

The US-based aviation giant said it has signed an agreement with Chengdu Aircraft Industrial Group for the production of composite rudders for 787 Dreamliner jets as well as forward entry doors and automatic over-wing exit doors for 737s.

It has also contracted Hafei Aviation Industry Co to provide 787 wing-to-body fairing panels while Shenyang Aircraft Corp will build the leading edge assembly for the 787's vertical fin.

BHA Aero Composite Parts Co, a joint venture between Boeing, Hexcel Corp and AVIC I, will build interior panels for the 777 control cabin as well as the wing-to-body fairing panels and tail cone for the next-generation 737.

Boeing said it will also substantially increase component production rates for the 737, its best-selling aircraft in China and worldwide, at Shanghai Aviation Industrial Corp, Xian Aircraft Co and Shenyang Aircraft Corp.

The new contracts for parts and components for Boeing's 737, 777, and the new 787 Dreamliner are expected to enter the market in 2008.

Boeing now holds contracts with China's aviation industry valued at 1.6 billion dollars.

"China has been a reliable partner to Boeing for many years. Boeing is committed to China," said Corvi.

More than 3,500 Boeing aircraft -- one third of its fleet -- have major parts and assemblies built in China.

The US aircraft maker forecast that China will need 2,300 jetliners over the next 20 years, making it one of the world's largest airplane markets.

The initial contracts for the 787 model will extend 13 years after its launch to 2021, while the lengths of the other contracts will vary depending on their size, Corvi told reporters.
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Old June 3rd, 2005, 08:43 PM   #419
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BA and Virgin square up over China
Robert Lea, Evening Standard,
3 June 2005

BRITISH AIRWAYS has unveiled plans to take the battle for China to Sir Richard Branson's Virgin Atlantic. It has added the boom town of Guangzhou to its wish list of new routes, and opened its first new major route in years yesterday by launching a London-Shanghai service.


But chief executive Rod Eddington says 'there is all to play for' as the Chinese aviation authorities rapidly open up the skies to UK carriers. BA and Virgin will go head-to-head to land 16 new daily services to mainland China - more than double the current capacity.


The new route to Shanghai puts BA in direct competition with Virgin, which has been operating services there for the past six years.


Eddington, who leaves BA this autumn, said the airline is actively looking at a new route to Guangzhou, the capital of Guangdong, the old province of Canton inland from Hong Kong. It is seen as the next emerging market. But he does not want to commit to headlong expansion in China despite the growth potential.


'Guangzhou with its new airport is a very interesting prospect,' he said. 'But the first thing we want to do is is bed down our new Shanghai services and our increased frequencies of three times daily to Hong Kong. In addition, we want to get up to a daily service to Beijing where we have been flying for the last 25 years ... with the increased capacity available, there is all to play for.'


In the longer term, BA is eyeing services to Chengdu and Wuhan, the capitals of enormously populated provinces in the interior that are as yet undeveloped in airport infrastructure terms.


The rush to China mirrors another battle with Virgin, to open up the giant Indian market.


The long history of bad blood between the two carriers has not been helped by rows with the British Civil Aviation Authority over who flies where in India, especially the plum route to the country's commercial centre of Mumbai-Airline insiders are forecasting-similar bloody battles over the carve-up of China.


The country could be on the shopping list of bmi, the former British Midland, which only last month launched its first long-haul flights out of Heathrow.


Meanwhile, BA said traffic rose by 3.2% in May, with its premium cabin performing particularly well. The flag carrier believes bmi has scored an own goal by axeing business class from its UK and European services.


BA chairman Martin Broughton said: 'We believe there is a business market on short-haul and we will not be cutting our business class cabins. We say thank you very much, bmi.'
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Old June 6th, 2005, 02:52 AM   #420
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Quote:
Originally Posted by Insane alex
I can't bealive that Shanghai dosn't have a larger airport!
?There are two international airports in Shanghai, Hongqiao and Pudong.
Pudong is pretty big and being enlarged
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