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Old June 14th, 2005, 10:08 AM   #441
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Intense battle for custom
Andrew Yeh looks at an industry rebound

By ANDREW YEH
13 June 2005
Financial Times

In common with many aspects of China's economy these days, the country's aviation sector has been in a constant state of flux. As demand for domestic and international travel services strenthens, local carriers and several international airlines have been preparing for an intense battle for the custom of the country's travellers.

China's state controlled carriers have been buying aircraft from rivals Boeing and Airbus and are looking to expand their flight networks. At the same time, several global airlines are looking to introduce services to Chinese cities.

As a whole, China's airline industry has seen a dramatic rebound since 2003 when the outbreak of Sars crippled travel enthusiasm and industry revenues in the region. China's aviation market recorded profits of Rmb8.69bn last year, equivalent to the accumulated profits over the previous decade, the country's aviation regulator has estimated.

Of that amount, the three largest carriers - Air China, China Southern and China Eastern - accounted for 62 per cent.

The number of passenger trips in China last year increased by 39 per cent while traffic for international routes shot up 52 per cent.

But even as business has improved, the main domestic airlines have been on guard as foreign carriers look to broaden their presence. Some Chinese airlines have undergone significant internal reorganisation to raise their competitiveness.

Several North American, European and regional airlines have been positioning themselves to expand flights to China.

A bilateral agreement reached last year between the US and Chinese governments, for instance, outlines plans significantly to boost the number of passenger and air cargo flights between the two countries over six years.

That agreement pledges more than to double the number of airlines flying between the countries and increase the number of weekly flights from 54 last year to 249 after six years.

US airlines have submitted applications to regulators to fly to popular Chinese destinations such as Beijing, Shanghai and Guangzhou. Local carriers such as Air China and Hainan Airlines have likewise said they are looking to expand services abroad, particularly to the US.

In the immediate future, however, there will be comparatively more interest from US carriers looking to expand services to China than for Chinese carriers flying to the US, industry experts say.

This month Continental Airlines will join United Airlines and Northwest Airlines in becoming the third US airline to serve China with its Beijing-Newark, New Jersey route. American Airlines is preparing for its maiden flight to China, a Chicago-Shanghai route, next year.

Jim Compton, executive vice-president of Continental, says international routes such as these will be crucial to its business as it has been under great pressure from a host of budget airlines at home.

Many European airlines are also looking at adding flights to China. Tim Ramage, Beijing general manager for British Airways, says competition has intensified over the years as China's middle class becomes more willing to spend money and more discerning in its preferences for various flight services.

He predicts there will eventually be more international routes to secondary cities such as Chongqing and Chengdu, both located in heavily populated Sichuan province.

"In the initial stages demand exceeded supply," he says of China's market generally.

"Now supply matches demand and carriers have to compete more aggressively to win customers."

Many industry experts expect the travel flow to and from China to remain strong in the years ahead. Martin Lin, head of the aviation group of the American Chamber of Commerce in Beijing, says there will be a trend of greater numbers of US based travellers going to China while the opposite is true for air cargo.

Official statistics from last year show that the number of international visitors was nearly four times that of outbound travellers.
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Old June 15th, 2005, 06:31 PM   #442
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China likely to lead demand in south-east Asia
Andrew Yeh looks at the implications for the air industry as the sector opens up

By ANDREW YEH
13 June 2005
Financial Times

China's demand for small business aircraft is projected to gather momentum as its aviation sector opens up and more people seek greater travel convenience, according to a consensus of industry experts.

Many foreign business jet makers believe China's growing class of multi-millionaires and its rapidly internationalising enterprises will fuel demand for one of life's most extravagant status symbols in the years ahead.

Several local airlines already offer charter services within the country and have purchased foreign aircraft but there are probably only a handful of people in the country who own their own aircraft, according to industry estimates.

But the world's leading makers are predicting China will be an important driver of sales.

In August, Shanghai will host a large-scale business aircraft trade show, the first of its kind on the mainland. The event, organised by the Washington-based National Business Aviation Association, will feature a display of popular models at the city's Hongqiao International Airport.

Orders for aircraft have been on the rise. Todd Duhnke, director of international sales for US manufacturer Cessna Aircraft, for example, says eight orders last year nearly doubled its fleet of Citation aircraft in the country to 17.

Jeff Lowe, Hong Kong based vice-president of Gulfstream Aerospace, another US company, says he expects to see a gradual progression in China over the next few years.

Companies and individuals will first use charter jets on an ad hoc basis, then start buying blocks of charter time at a discount, and finally some rich Chinese will consider fractional or sole ownership of a jet, he says.

"We all see a lot of business there," says Mr Lowe during an interview aboard a Gulfstream G550, one of the company's most advanced aircraft.

"There's more wealth being generated in China and a global expansion of Chinese corporations."

Gulfstream, in common with a number of leading business aircraft manufacturers, has until now relied primarily on selling to China's charter operators.

But foreign manufacturers have been looking to make more sales to wealthy individuals, which have been very rare.

Jackie Berger, of Raytheon Aircraft in Kansas, says her company has sold nine aircraft to Hainan Airlines (Deer Jet) and Shanghai Airlines, two of China's domestic charter operators, but made only its first sale to a private buyer this year - a Beechcraft Premier I to entrepreneur Qiu Dedao.

Mr Qiu, who heads a chemical fibre company in Hangzhou near Shanghai, paid about Dollars 6m for his jet after attending an air show in Singapore last year, according to Raytheon.

Rich Chinese who buy jets are in large part drawn to their efficiencies.

Zhang Yue, a businessman from the central province of Hunan who owns several Cessna aircraft, says the "better mood" that comes with having a jet far outweighs any complications.

Mr Zhang pointed out he can now decide to go anywhere in the country within an hour and often takes guests on board.

Ms Berger added that corporate jets can conveniently travel to more remote areas and land with ease on shorter runways.

The downside is that owning a jet in China can be troublesome and the cost of maintaining one can be high - there are necessary expenses for hiring pilots, servicing the aircraft,

miscellaneous flight and landing fees. And as in other

developed countries, the cost of chartering is steep. A Shandong Airlines representative says a Bombardier Challenger will cost Rmb38,000 an hour and an official with Hainan Airlines says its Gulfstream will cost Rmb40,000 an hour.

The country's charter airlines report they have been getting a steady stream of requests mainly from large enterprises, with occasional calls from high society Chinese.

As of now, foreign charter operators have mostly been only looking at China. US-based NetJets, which has a network of 50 aircraft in Europe alone, does not have any business in China, says a company representative.

But there are signs the market has been opening up for foreign jet companies, and many are eager to market themselves in China. Beijing has already eased controls on market entry by approving more models of foreign aircraft.

John Rosanvallon, chief executive officer of Dassault Falcon Jet, says he expects all of his company's models to get regulatory approval by the end of this year, and other foreign aircraft makers have reported similar progress.

On the regulatory side, Beijing has allowed private jets access to its skies, albeit under restrictions.
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Old June 15th, 2005, 10:58 PM   #443
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China Southern Airlines takes delivery of fourth Airbus A330
15 June 2005

HONG KONG (AFX) - China Southern Airlines, the largest carrier in the mainland, said that it has taken delivery of its fourth and final Airbus A330 aircraft.

The aircraft arrived last weekend in Guangzhou and it will be used in China Southern's domestic routes from Baiyun International Airport in Guangzhou to Beijing and Shanghai.

'We look forward to placing this new long-haul aircraft into operation into key markets that will allow our airline to be even more competitive in the global marketplace,' said vice president Yuan Xin'an.
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Old June 15th, 2005, 11:07 PM   #444
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China Southern Airlines' May Passengers Up 62% On Year
15 June 2005

HONG KONG (Dow Jones)--State-controlled China Southern Airlines Co. (ZNH) said Wednesday it carried 62% more passengers in May than in the same month last year, accelerating from a 44% growth recorded in April.

The Guangzhou-based airline said it had 3.63 million passengers in May, up from 2.24 million in May 2004. In April, the airline also carried 3.63 million passengers.

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

For the first five months of 2005, China Southern carried a total of 16.7 million passengers, up 50% from the same period in 2004.

The airline said it handled 61,760 metric tons of cargo in May, up 32% on year.

From January to May, it carried a total of 288,140 tons of cargo, up 30% from 222,050 tons a year ago.

The airline's revenue passenger kilometers - the number of passengers multiplied by the number of kilometers they fly - rose 71% on year in May, from a 55% rise in April.

China Southern is one of China's three major airlines. The company reported a net loss of CNY285 million in the first quarter this year, due to weak domestic demand and high oil prices.

However, the company said demand has gradually picked up since mid-March.
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Old June 16th, 2005, 09:22 AM   #445
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Srilankan Airlines Begins Service to Beijing

BEIJING, June 16 Asia Pulse - SriLankan Airlines have commenced a three-times-a-week service between Colombo and Beijing, to tap the large tourism market potentials in China.

The flights will operate from Colombo to Beijing via Bangkok every Wednesday, Friday and Sunday.

Peter Hill, SriLankan Airlines' chief executive officer, said the company aims to develop a daily service on the route in the near future.

"We also hope to expand our services to other cities in China, such as Shanghai and Guangzhou," he said.

The airline, which currently flies to 49 destinations in 27 countries, will be initially focusing on the huge family travel and leisure market from China to the Maldives and Sri Lanka, as well as providing the Chinese traveller with convenient connections to other points in South Asia, the Middle East and Europe, said Hill.

The route will be in keeping with SriLankan's vision of making Colombo the hub of South Asia, while promoting the Maldives and Sri Lanka as twin holiday destinations to Chinese travellers, he said.

Hill said the company is working closely with outbound travel agencies in Beijing and inbound tourism agencies in Sri Lanka in a bid to develop packages for those Chinese travellers who have a special demand for culture tours and inland adventure in Sri Lanka.

SriLankan Airlines is the national carrier of Sri Lanka, a beautiful island nation off the coast of southern India, strategically situated in the Indian Ocean with easy access to various points in Asia, Europe and Australia.

The country is rich in natural beauty, wildlife heritage, and millennia-old ancient ruins, he added.

There are only half a million tourists around the world going to Sri Lanka each year at the moment.

But Hill predicts the figure will grow by 50,000 to 100,000 annually in the coming few years.

Hill sees great potential in the Chinese market.

"This is a market with 1.3 billion people, 50 million of whom already use air travel. With its gross domestic product growing 9.5 per cent year on year, this is the market for the future, and we are entering it right on time," he said.

Sri Lankan Airlines has signed interline agreements with four airlines in China. They are Air China, China Eastern, China Southern and Dragonair.

Passengers anywhere in China will have easy access to the SriLankan network of destinations, and passengers flying into China can travel on SriLankan up to Beijing and hop on to domestic flights with ease, Hill said.

SriLankan has carried out a series of promotional events to lay the groundwork for the operations in China.

The airlines opened a ticket office in Beijing last September.

Mangala Samaraweera, Sri Lanka's minister of aviation and ports, travelled with the first service to Beijing yesterday, to promote tourism ties between Sri Lanka and China.

A series of roadshows is being held in many provinces throughout 2005, targeting travel agencies and customers.

There are other events being held in close co-operation with the Sri Lanka Tourist Board.

It is hoped that the launch of services to Beijing will now add a different cultural dialogue to the strong diplomatic and trade relations the two countries already enjoy, Hill said.
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Old June 17th, 2005, 10:23 AM   #446
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Chinese Airlines in Talks for More A380s

BEIJING, June 17 Asia Pulse - Airbus SAS, which got the first Chinese buyer in January for its biggest aircraft, said it is in talks to sell more A380 planes to three Chinese airlines, aiming to deliver them in time for the 2008 Beijing Olympics.

Airbus, the world's biggest maker of commercial aircraft, is in talks to sell an undisclosed number of the 555-seat A380 to Air China Ltd, China Eastern Airlines Corp and Hainan Airlines Co, said Philippe Delmas, Airbus' executive vice president of government relations and communications.

"We are working on getting new customers in China," Delmas said. He declined to say when a sales agreement might be signed with the three buyers.

State-owned airlines of China, the world's fastest-growing major economy, bought 140 aircraft this year valued at US$15.5 billion from Airbus, Boeing Co and Empresa Brasileira de Aeronautica, making the nation the largest market for new planes. China's nine airlines are renewing and expanding their fleets in preparation for the 70 million visitors expected during the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

Chinese airlines may need 1,790 new planes valued at US$230 billion over the next 18 years, according to estimates by Airbus, as the nation's air passenger traffic grows at a pace of 8 per cent a year, faster than the world average of 5.3 per cent. Aeroplane orders for Airbus and Boeing totalled 647 planes last year. The combined total for 2005 was 718 aircraft for the two companies, based on announcements this week. Orders so far at the Paris Air Show totalled 255 planes.

China Southern, with the country's largest fleet, placed a US$1.4 billion order for five A380 planes in January. The A380 will surpass Boeing's 747 as the world's biggest passenger plane when it enters service next year.

Air China, the nation's biggest carrier of overseas travellers, raised HK$9.6 billion (US$1.23 billion) in January from sales of dollar-denominated shares in Hong Kong. The airline is selecting investment banks to sell yuan-denominated shares and was approved to raise 3 billion yuan (US$362 million) in a sale of 10-year local currency bonds.

All this money may go towards the expansion and renewal of the airline's fleet, with 136 planes at the end of June 2004. Air China placed an order in January for 20 Airbus A330-200 planes valued at US$2.9 billion, according to catalogue prices.

Air China is "studying the feasibility" of buying A380s, said its head of investor relations Rao Xinyu.

China Eastern is the nation's third-largest carrier by fleet. The Shanghai-based airline paid US$200 million in March for five Airbus A319 aircraft to use on domestic flights, getting an average 32 per cent discount from catalogue prices.

China Eastern flew 100 aeroplanes by the end of June 2004, according to its annual report. The carrier's previous aircraft purchase was in 2002, when it paid US$800 million for 20 Airbus A320 planes. The A320, with a single aisle between its 150 seats, is used for flying short distances of up to 5,556 kilometres.

Hainan Airlines, owned by US financier George Soros, is China's fourth-biggest airline. The company, based on Hainan Island in southern China, flies a fleet of about 90 planes made by Airbus, Boeing and Germany's Fairchild Dornier GmbH. The airline bought its first Airbus aircraft in December 2003, in a US$440 million order for eight A319 planes.
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Old June 18th, 2005, 09:24 PM   #447
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Beijing Capital Airport May Passengers Up 26% On Year
16 June 2005

HONG KONG (Dow Jones)--Beijing Capital International Airport Co. (0694.HK) said passenger traffic at the Chinese capital's airport rose 26% on year in May.

Around 3.31 million passengers passed through the airport during the month, of which 77% traveled on domestic routes, 19% on international routes and 4% on Hong Kong and Macau routes, the company said Wednesday.

The number of passengers traveling on domestic routes rose 27%, while passengers on international routes increased 18%, it said. Those traveling on Hong Kong and Macau routes increased 56%.

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

Aircraft takeoffs and landings at the airport increased 14% on year in May, it said. Of those, 78% were domestic flights, 18% were international and 4% were flights to Hong Kong and Macau.

The number of domestic flights rose 15%, while international flights were up 9%, and Hong Kong and Macau flights increased 25%.

In May, the airport handled 61,237 metric tons of cargo and mail, up 10% from a year earlier.

For the first five months of 2005, Beijing Capital's passenger traffic rose 19% on year to 15.4 million, and cargo traffic climbed 16% to 297,896 tons.
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Old June 19th, 2005, 08:30 AM   #448
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China clears new private airline for take off

BEIJING, June 17 (AFP) - East Star Airlines has won the approval of China's aviation authorities to begin operations as the nation's fourth licensed private carrier, state press said Friday.

The Civil Aviation Administration of China (CAAC) issued the approval recently, the official CAAC journal reported.

East Star Airlines, which is based in the central province of Hubei, will be founded by three firms led by the privately-owned tourism and property investment company, China East Star Group, it said.

The carrier hopes to launch its initial flight next year.

East Star Airlines has a registered capital of 80 million yuan, (9.66 million dollars), the report added. No further details were provided.

So far, three privately-owned airlines have emerged to try and win a slice of China's booming aviation market.

They include Tianjin-based Okay Airlines, which launched its first flight in March; formerly state-owned Shenzhen Airlines, which sold a 65 percent stake to two private investment firms last month, and Spring Airlines, which starts operations later this month.
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Old June 19th, 2005, 01:23 PM   #449
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19 June 2005

China's big-plane dream fraught with difficulties


BEIJING: China's ambition of building a large passenger jet by 2020 could be fraught with difficulties, not least competition from global giants Airbus and Boeing, experts said.

Aviation officials said last week that China should act now to build a 150-200 seat 'trunk liner' to cater for booming domestic demand, as Boeing and Airbus were busy developing bigger planes.

"If China does not roll out its own trunk liner by 2020, then the country will not succeed in 2030 or 2040. So it is really a rush," said Liu Daxiang, a senior official with China Aviation Industry Corporation AVIC I.

Projections from AVIC I show that China will need 600-700 liners capable of carrying 150-200 passengers "in the near future," with industry officials recommending that the demand should be met by domestic constructors.

"Clearly the most significant barrier will still be Boeing and Airbus who have been building these kinds of aircraft for decades," said Dirk Sadubin, an expert with the Sydney-based Centre for Asia-Pacific Aviation.

China, which is still trying to develop a market for domestically built 70- to- 90-seat regional jets, was a long way off matching Boeing and Airbus' efficiencies in design, marketing, branding and after-sale service, he said.

But "China has the advantage of low labour costs, so if they convert that into an accepted format of aircraft, they could have a good response from airlines looking to lower costs", Sadubin said.

"A Chinese-built plane would also get help from the government's state purchasing system, with Chinese airlines likely to be urged to buy the domestic aircraft."

Still, China would need tremendous capital and political will to successfully compete against the giant manufacturers, while getting an aircraft certified internationally would not be easy either, he said.

"The current information indicates there is no formal plan for launching the large aircraft program yet," said one Western industry source who supplies equipment to China's aviation industry.

"However, it is very clear the government realizes the development of the large transport aircraft is one of the critical strategic technologies for advancing the country to the next level of aviation excellence, just like the Chinese space program," the source said.

Recommendations to build the plane came in a report to the government last year and also stressed that hardware design and technological skills should be secondary to the modern management capabilities needed to organize production and integrate aviation systems, he said.

Even if China decides to go ahead with the project, any large jetliner would likely need a lot of Western input, not only in the design but also in engines and avionics, said Robert Karniol, East Asia editor for Jane's Defense Weekly.

"Avionics and engines are not areas that China is strong in," Karniol said.

"For this kind of plane both the avionics and engines, and quite likely the design, they will probably have to look to foreign suppliers."

China's best military planes are foreign-built, while the top home-produced military jets rely on Russian and British engines and Western avionics and designs, he said.

Last week's announcement is not the first time that China has expressed hopes of building a large passenger jet.

Earlier this decade efforts to establish a joint venture company to build a short-haul 100-seat aircraft with Airbus and then with a South Korean consortium ended at the negotiation table.

Meanwhile, AVIC I's joint venture with McDonald-Douglas to produce the 150-seat MD-90 was discontinued after Boeing took over the US aircraft maker.- AFP/ir

Copyright © 2005 Agence France Presse. All rights reserved.
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Old June 21st, 2005, 07:38 AM   #450
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China set to mass produce new generation of fighter jet trainers

BEIJING, June 21 (AFP) - China is preparing the mass production of a third-generation jet fighter training plane and could roll out up to 10 of the JL-9 Mountain Eagles next year, state press reported Tuesday.

The plane would be manufactured by the Guizhou Aviation Industry Group, but it was still unclear if the Chinese airforce had signed contracts to buy the trainer, the China Daily reported.

A model of the aircraft made its maiden flight in December 2003, with reports at that time saying mass production would begin in 2005.

The plane, whose NATO-designation is FTC-2000, is expected to train fighter pilots flying third-generation craft like the Russian Sukhoi Su-27s and Su-30s, the most advanced fighters in China's air force.

The planes can also be fitted as fighter aircraft and sold to developing markets, the report said.

"Our goal is to see to it that a number of the new trainers go to the military in 2006," Zhang Shangdao, vice president of the Guizhou manufacturer, was quoted as saying.

"Since it is both a fighter and trainer, some small countries, lacking a large fleet of fighter planes, could use the Mountain Eagle to train their fighter pilots in peace time, arming it for use as a fighter in war time."

The Guizhou factory, which is part of the China Aviation Industry Corp I, has manufactured some 1,100 planes for the Chinese military since it was set up in 1964.

The JL-9 is powered by a domestically-made WP-13 turbojet engine, can reach a maximum speed of Mach 1.6 (1.6 times the speed of sound) and can carry two pilots.
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Old June 21st, 2005, 06:29 PM   #451
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Tuesday June 21, 5:22 PM
China Eastern Airlines May Passengers Up 12% On Yr

HONG KONG (Dow Jones)--China Eastern Airlines Corp. (CEA), one of China's three major state-controlled airlines, said Tuesday it carried 12% more passengers in May than in the same month last year.

The increase in May passengers was higher than April's 0.8% rise.

China Eastern said its passengers increased to 1.6 million in May, but didn't provide a reason for the on-year rise.

The number of domestic passengers for the Shanghai-based airline rose 7.2% in the month to 1.1 million, while international passengers increased 22.3%.

The passenger load factor - the percentage of seats that were filled - was 64.3% in May, down slightly from 70% in April.

The airline's freight load factor was 50.9%, down from 54.1% in the previous month.
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Old June 22nd, 2005, 12:23 PM   #452
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June 22 2005
Fraport a potential investor in China airport

SHANGHAI, June 22 (Reuters) - China's southwestern city of Kunming plans to start building a $1.9 billion airport this year and is talking with potential investors including Germany's Fraport , a mainland airport executive said on Wednesday.

The 16 billion yuan ($1.93 billion) airport is targeted to open by 2008, the official told Reuters, to help alleviate a crunch of passengers flying to and from the well-known tourism destination.

German airport operator Fraport is also considering a quarter stake in eastern China's Ningbo airport, as it seeks to tap booming demand for travel in the world's seventh-largest economy, officials have said.

Chief Executive Wilhelm Bender told Reuters in February he wanted to expand his business and share in the country's rapid passenger growth. Fraport already owns airports in countries from Peru to Turkey and is looking to other emerging markets.

"Most of the funding will be provided by the government, but we have also held talks with Fraport, Hong Kong's airport and Singapore's Changi airport on investment," said the Kunming airport official, who declined to be identified.

Fraport declined to comment on Wednesday.

Kunming is China's seventh-busiest airport, handling almost 10 million passengers in 2004, mainly to domestic destinations but also regional cities such as Bangkok and Seoul.

It is the home base of China Eastern Airlines' Yunnan arm, the former Yunnan Airlines.

The new airport will have a designed annual capacity of 25 million passengers, more than doubling the existing 12 million, the official said.

"Traffic down here is booming, and we are already a bit stretched this year," he said.

BALMY CLIMATE


Kunming's airport has logged double-digit traffic growth over past years as domestic and foreign tourists flock to the province, renowned for its balmy climate and scenery.

The city is one of just a handful of the country's 130 odd airports that are profitable, he said without elaborating.

Beijing started opening its aviation infrastructure sector two years ago to foreign and domestic money as it hunted cash and expertise to propel an industry overhaul, needed to cope with growing numbers of Chinese taking to the skies.

The country is now spending billions of dollars to upgrade facilities and build new airports. It opened a $2.4 billion airport in the southern city of Guangzhou last year.

Few foreigners have bothered with Chinese airports, which are notorious for their inefficiency.

Still, airport officials said this week that Changi airport had signed an initial agreement to spend up to 1.6 billion yuan for as much as 45 percent of eastern Nanjing airport.

And in April, Hong Kong's airport, Asia's second-busiest, spent $240 million on a 35 percent stake in Hangzhou airport, also in Zhejiang province and a two-hour drive west of Ningbo.

In 2002, Denmark's Copenhagen Airports took a 20 percent stake in Meilan Airport , which operates the main airport on the southern Chinese resort island of Hainan. ($1=8.276 Yuan)

Copyright © 2005Reuters Limited. All rights reserved.
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Old June 22nd, 2005, 08:45 PM   #453
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China Eastern, JAL to begin code-sharing on Dalian-Tokyo route
21 June 2005
China Daily

China Eastern Airlines Co Ltd and Japan Airlines (JAL) will start code-sharing on air routes linking Dalian and Tokyo from July 1, the official journal of the General Administration of Civil Aviation of China (CAAC) reported.

China Eastern now operates 228 weekly round-trip flights to 15 destinations in Japan, the report added.

JAL said earlier that it will expand flights and connections to China through code-sharing agreements with Chinese carriers.

JAL said this year its network will grow to 237 weekly flights to 20 cities in China, 13 of them direct.
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Old June 22nd, 2005, 09:00 PM   #454
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China's Shandong Aviation Group to buy 15 Boeing 737s - report
20 June 2005

BEIJING (AFX) - Shandong Aviation Group, the parent of Shandong Airlines Co Ltd (SZB 200152), has signed an agreement with Boeing Co to buy 15 737-700/800 aircraft, the Hong Kong-based Wen Wei Po reported.

The Hong Kong-based newspaper said seven of the planes will be delivered this year with the rest to arrive next year.

The newspaper gave no further details on the order.

Company officials were not available for comment.

According to the report, Shangdong Aviation will own a fleet of 60 aircraft by 2010, with annual passenger throughput estimated at 8-10 mln.

The group currently owns 30 aircraft.
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Old June 24th, 2005, 12:06 AM   #455
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Hong Kong's Civil Aviation Dept in talks with China's Kunming airport - report
23 June 2005

BEIJING (AFX) - The Civil Aviation Department (CAD) of Hong Kong is in talks with the Yunnan provincial authority in southwest China for a stake in Kunming airport, the Hong Kong-based Wen Wei Po reported, citing an unnamed official with CAD.

The local government will invest 16 bln yuan in the new airport which, together with Kunming's current airport, is expected to handle some 25 mln passengers in 2008.

Kunming airport is the seventh busiest on the mainland and handled 10 mln passengers last year.

CAD has also submitted a stakeholding plan to Zhuhai airport in southern China, the newspaper said, citing an unnamed CAD official.

According to the plan, CAD will rent Zhuhai airport for 20 years at a cost of 200 to 300 mln yuan before taking overall control.

No further details were provided.

In April CAD, which plans to list on the Hong Kong stock exchange, finalized a 1.9 bln deal hkd to acquire 35 pct of Hangzhou Xiaoshan International Airport, about a three-hour drive from Shanghai.

German airport operator Fraport AG said earlier that it has started talks with Yunnan provincial authority in China over the construction of the new Kunming airport.
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Old June 28th, 2005, 09:03 PM   #456
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China Baiyun airport signs framework pact with Los Angeles airport
27 June 2005

BEIJING (AFX) - Guangdong Airport Management Group, parent of Guangzhou Baiyun International Airport, has signed a framework agreement for cooperation with Los Angeles International Airport, the General Administration of Civil Aviation of China (CAAC) Journal reported.

Both airports will cooperate on areas of technology and information exchange as a first step in preparation for further exchanges, CAAC said in its publication.

No further details were provided.

Guangzhou Baiyun International Airport, one of the country's leading airport operators, signed a strategic partnership with Frankfurt Airport last October.
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Old June 28th, 2005, 09:05 PM   #457
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China's lack of pilots slows aviation growth
Future business and safety threatened Asian Skies

David Lague
International Herald Tribune
27 June 2005

HONG KONG:

China's booming commercial aviation industry is taking off faster than the country can train pilots, a trend that threatens future growth and hard-won advances in air safety.

There are now about 11,000 pilots employed to fly more than 800 aircraft operated by major Chinese commercial airlines, according to figures from the Civil Aviation Administration of China, a number that industry experts believe is inadequate to cope with rocketing demand for passenger services.

The agency has capped the number of new aircraft to be delivered to airlines this year at 145 in a bid to ensure manageable growth in the industry, but even these new aircraft are expected to outstrip the capacity of training schools to supply new pilots.

The airlines are reluctant to comment on the shortage, but some smaller Chinese carriers have been forced to flout government policy and recruit foreign pilots as a stopgap measure to keep their aircraft flying at optimum levels.

Industry experts and reports in the official Chinese media confirm that the Chinese carriers that have employed foreign pilots include Shenzhen Airlines, Hainan Airlines, Sichuan Airlines and the country's first private operator, Okay Airlines.

Experienced pilots based in China calculate that there are now well over 100 foreign pilots flying for Chinese carriers. There are also unconfirmed reports that some airlines have been forced to cancel services because of the lack of pilots.

"China may have been caught out a little here," said John Bent, a Hong Kong-based aircrew training specialist and former senior airline pilot. "They don't really want to use foreign pilots, but they don't really have any choice in the short term."

This demand for pilots is likely to increase with the rival passenger aircraft makers, Boeing and Airbus, both predicting further dramatic expansion in the Chinese aviation industry.

Boeing estimates that China will need more than 2,400 new passenger and freight aircraft worth almost $200 billion over the next two decades.

That would make China the second-biggest aviation market in the world after the United States.

To fly these aircraft will require a huge increase in the number of trained aircrew.

"In the next 20 years, we estimate China will need 55,000 captains," said George Liu, a Beijing-based spokesman for Boeing.

Barry Grindrod, a Hong Kong-based aviation analyst and chief executive of Orient Aviation magazine, warns that the impressive safety record Chinese airlines have built in recent years could be in jeopardy if the shortage persists.

"If you don't have enough pilots, there is always a risk that corners will be cut," he said.

Grindrod said that most of the foreigners now flying in China were recruited from South America, particularly Brazil and Chile, and Eastern Europe.

India, Asia's other prospective commercial aviation giant, has also been forced to hire foreigners to fly commercial airliners.

"There are about 10 to 12 aircraft in India grounded because there are no pilots," said Kapil Kaul, an aviation consultant at the New Delhi office of the Center for Asia Pacific Aviation.

Kaul said the center estimated that India would need up to 4,000 extra pilots over the next five years and that training them would cost up to $200 million.

The government and industry have adopted measures to speed pilot training, but this needs to be done with care, he said.

"Our safety record has been very, very good," he said. "We have good technical regulators and safety regulators in the country," but "obviously, when you are talking about such a large number of people being trained, I think the government has to ensure while we have the requisite resources, it is not at the cost of safety."

While foreign pilots might be a short-term solution to China's pilot shortage, analysts believe that the authorities and the airlines will need to sharply increase the output of pilots from training schools to match industry growth.

Statistics of the Civil Aviation Administration of China show that China's major airlines carried 120 million passengers in 2004, a 38 percent increase over 2003.

Demand is expected to ease this year, but industry analysts expect passenger numbers to jump by at least 15 percent.

In the short term, airlines would come under additional pressure to recruit and train aircrew because close to 10 percent of China's active pilots are close to retirement age, according to industry analysts.

Jeff Ruffolo, a spokesman for China's biggest carrier, the New York and Hong Kong-listed China Southern Airlines, said the company was planning to expand its pilot training intake without any compromise in standards or resorting to overseas recruiting.

"We grow our own pilots," he said. "We do not take any military pilots and we do not take any foreigners."

Ruffolo said China Southern was growing in "leaps and bounds" and now operated more than 230 aircraft on more than 540 domestic and international routes. It has more than 70 new aircraft on order from Boeing and Airbus.

Unlike other Chinese airlines, China Southern operates its own introductory flight training school, the China Southern Western Australia Flying College, near the Australian city of Perth.

Graduates from this college undergo further training at another company facility in Zhuhai in Guangdong Province. More than 800 pilots who began their training at the college in Australia have gone on to fly with the airline.

China's only domestic school now training commercial airline pilots, the CAAC-run Civil Aviation Flight University of China, based in Sichuan and Henan provinces, supplies a maximum of 600 pilots a year.

Based on the delivery of new aircraft, airline pilots and industry experts estimate that China has needed between 1,200 and 1,600 new pilots each year since 2000, far more than the number trained domestically.

Much of the shortfall had been made up by sending candidate pilots overseas for training.

Analysts note that Chinese airlines are not alone in the battle to recruit and train pilots. This is a problem for all major international carriers at a time when soaring fuel prices are cutting into their profits.

***

Donald Greenlees contributed reporting for this article.
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Old June 29th, 2005, 02:50 PM   #458
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Business Times - 29 Jun 2005

Qantas to fly to Beijing next year

SYDNEY - Australian flag carrier Qantas Airways announced on Wednesday it will resume flights to Beijing early next year, more than six years after it suspended services to the Chinese capital.

Qantas executive general manager John Borghetti said the airline would operate three weekly flights to Beijing from January 9 next year and expected to offer daily flights to both Beijing and Shanghai within two years.

He said travel between China and Australia had increased more than 40 per cent in the past three years and was expected to grow a further 20 per cent in the next 12 months.

'Within two years we expect to offer daily Qantas flights to both Beijing and Shanghai in response to the growing trade relationship between Australia and China and increasing demand for leisure travel in both directions,' he said.

A Qantas spokeswoman said Qantas stopped flying to Beijing in 1999 and Shanghai in 2001 because of tough market conditions.

Mr Borghetti said Qantas already operated 31 flights a week to Hong Kong.

He said Qantas flights to China would use the new two-class Airbus A330-300 aircraft and the airline would continue to codeshare on China Eastern services between Sydney and Shanghai.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old June 29th, 2005, 08:44 PM   #459
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China's airlines post combined loss of 340 mln yuan for Jan-May - report
29 June 2005

BEIJING (XFN-ASIA) - China's airline companies recorded a combined 340 mln yuan loss in the first five months of this year due to rising fuel costs, the Beijing News reported, citing a televised meeting held yesterday by the General Administration of Civil Aviation of China (CAAC).

No comparative figures were available and no one from the CAAC was immediately available for comment.

State media reported earlier that the price of fuel has increased by 430 yuan per ton since March 15.

It also said that China's airline sector posted a combined loss of 220 mln yuan for the first quarter this year due to rising fuel costs.

China has three big airline groups - China Eastern Airlines Corp Ltd (SHA 600115; HK 0670; NYSE CEA), China Southern Airlines Co Ltd (SHA 600029; HK 1055; ADR ZNH) and Air China Ltd (HK 0753) - and dozens of smaller regional airlines including Hainan Airlines Co Ltd (SHA 600221; SHB 900945) and Shanghai Airlines Co Ltd (SHA 600591).
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Old June 30th, 2005, 10:47 AM   #460
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30 June 2005

China's aviation sector must liberalize to meet market demand: EU

BEIJING : The European Union urged China to free up its aviation industry, the fastest growing in the world, saying only through liberalization can the sector meet booming market demand.

"We must seize the opportunity to make rapid progress in all areas, including ... expansion of the number of people who can use aviation services," said Jacques Barrot, European Commission vice president and commissioner responsible for transport.

Currently, only 20 European and Chinese airlines are allowed to fly between Europe and China, offering flights to 10 Chinese cities and 15 European cities.

The total number of flights each week between both sides amount to only 226 passenger flights and 60 cargo flights.

China also imposes restrictions on other markets besides Europe. The number of flights allowed to and from China is insufficient to meet the needs, EU officials indicated at the EU-China Aviation Summit, the highest-level meeting of this kind ever held.

Citing the World Tourism Organization's prediction that by 2020 China will become the world's biggest tourist destination and the fourth largest source of tourists, officials said China's rapidly growing economy needs a "dynamic and growing" aviation sector to support it.

They said the EU was eager to not only offer increased flights and investment, but work with China to improve safety and install reliable air traffic management systems.

"I believe that closer cooperation between China, the European Union and its member states can help deliver these objectives -- to our mutual benefit," said David McMillan, director general of civil aviation for the United Kingdom's department of transport, representing the incoming EU presidency.

Growth forecasts suggest that EU-China air traffic will increase by around 7 percent per year over the next 15 years, fueled by increasing trade and tourism, Barrot said.

"The world events which China will be hosting in the coming years, such as the summer Olympic Games, here in Beijing in 2008, and the Shanghai World Expo in 2010, will attract an even greater number of European tourists and businesses," Barrot said.

"Faced with these challenges, we must not fail."

In addition to flight restrictions, China also caps foreign investment in its aviation sector at 35 percent ownership for airlines and less than 50 percent for other segments of the sector.

While Europe also restricts foreign ownership in its airlines to 49 percent, it is ready for liberalization, said a European Commission official in charge of bilateral transport agreements.

"We are prepared to move towards 100 percent, to lift the same restrictions on ownership in Europe," the official, speaking on condition of anonymity, told reporters on the summit's sidelines.

"We believe they impede the ability of airlines to attract capital."

EU officials said they hope to eventually reach an agreement with China on full market liberalization, including lifting investment caps and more importantly, lifting flight restrictions to ensure the number of flights offered are able to meet the market's demands.

Full liberalization, however, cannot be achieved overnight, officials said.

China's Vice Premier Huang Ju Thursday pledged support for increasing cooperation.

"The rapid development of the aviation market in China offers a lot of business opportunities. And the EU aviation industry has advanced technology and management expertise," Huang told the meeting.

"We have both our own features and they are mutually complementary ... The deepening of cooperation is in our common interest."

The EU expects to reach an agreement with China by the end of the year on amending 22 bilateral air services agreements with EU member states to reflect the EU in the agreements.

After that, it will await a mandate from the EU's Council of Transport Ministers before launching negotiations with China on market liberalization. - AFP

Copyright © 2005 Agence France Presse. All rights reserved.
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