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Old December 14th, 2006, 04:53 AM   #201
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United wants AA's attempt to change new China service bid blocked
13 December 2006

DALLAS (AP) - United Airlines asked federal officials Wednesday to block an effort by American Airlines to change its proposal for new service to China.

UAL Corp.'s United said American's request to add a Chicago stopover on its proposed Dallas-to-Beijing flights broke the U.S. Transportation Department's rules for deciding who gets the new China route.

Four airlines submitted bids before a deadline in October, but American asked to change its plan because a direct Dallas-to-Beijing flight would violate limits on working hours in its contract with pilots. The pilots union and American failed to settle their dispute.

The Transportation Department is expected to award the new China route in the next few weeks, with service likely to start in March. The agency gave the other carriers until Wednesday to comment on American's change.

Mary Frances Fagan, a spokeswoman for Fort Worth-based American, a unit of AMR Corp., said the airline wouldn't comment until it files a response with regulators on Friday.

Elk Grove Village, Ill.-based United wants to fly between Washington and Beijing. Northwest Airways Corp., which seeks to fly from Detroit to Shanghai, asked the federal agency last week to reject American's effort to change its bid.

Continental Airlines Inc., which proposes to fly between Newark, N.J., and Shanghai, hasn't formally asked the government to disqualify American from the contest, but it too criticized American. Adding the Chicago stopover shows that American's original Dallas-Beijing plan won't attract enough passengers, Continental spokesman Dave Messing said.
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Old December 18th, 2006, 08:08 AM   #202
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China's budget Spring Airlines fined for being too cheap

BEIJING, Dec 18, 2006 (AFP) - Authorities in China have fined fledgling budget carrier Spring Airlines for offering tickets cheaper than government-set levels, state press reported Monday.

The Shanghai-based airline was fined 150,000 yuan by a price regulator in the eastern province of Shandong, but has submitted a letter asking for the decision to be reconsidered, the China Business News reported.

Spring Airlines, which launched operations in July last year, sells air tickets for domestic routes about 36 percent lower than average industry levels, according to the report.

China's aviation industry is the fastest growing in the world but remains heavily regulated.
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Old December 19th, 2006, 08:44 AM   #203
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Air China November Passengers +11.5% On Yr To 2.58 Mln
15 December 2006

HONG KONG (Dow Jones)--Flag carrier Air China Ltd. (0753.HK) said Friday it carried 2.58 million passengers in November, up 11.5% from the same month last year.

The Beijing-based carrier shipped 80,687.8 metric tons of cargo during November, up 27.2% from a year earlier.

No year-earlier figures were provided.

Air China's passenger load factor, or the amount of seats filled on each flight, rose 1 percentage point from a year earlier to 75.4%.

The rise in passenger numbers mirrored a 9.5% increase in the airline's capacity over its entire network, which includes domestic, Hong Kong and international flights.

Passenger capacity, as measured by available seat kilometers, rose to 6.60 billion ASKs, while passenger revenue, as measured by revenue passenger kilometers, rose 14% to 4.98 billion RPKs.

Air China didn't elaborate on its traffic figures, which were posted on its Web site. The carrier is one of China's three main state airlines alongside China Southern Airlines Co. and China Eastern Airlines Ltd.
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Old December 21st, 2006, 06:26 AM   #204
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Xinhua news:
Wuhan set to become China's 4th air hub
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Old December 21st, 2006, 08:47 AM   #205
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China's Shenzhen Airlines to form regional airline JV with Mesa Air - report
20 December 2006

BEIJING (XFN-ASIA) - Mesa Air Group, a US low-cost airline operator, and China's Shenzhen Airlines Co Ltd will form a regional airline joint venture based in Beijing, the 21 Century Business Herald reported.

The proposed JV will have 500 mln yuan in registered capital with Shenzhen Airlines investing 255 mln yuan, and Mesa Air and Wilmington Trust Corp providing the remainder.

The proposed venture will be the first regional airline joint venture in the mainland, and is expected to start operations at the end of 2007, the newspaper reported.
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Old January 4th, 2007, 03:32 AM   #206
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China jet blows out tires on landing in Shanghai

SHANGHAI, Jan 3, 2007 (AFP) - Tires on a China Eastern Airlines Boeing 737 with 100 people aboard burst on landing in Shanghai, causing no injuries but forcing the airport to close for several hours, state press reported Wednesday.

The four tires of the Boeing 737-300's undercarriage exploded when the jet landed in Shanghai's Hongqiao airport after a regularly scheduled flight Tuesday from the northern port city of Qingdao, the Shanghai Daily said.

Nobody was injured but authorities were forced to shut the runway for more than four hours, causing lengthy delays to a flight log already under pressure from bad weather in Shanghai, the newspaper said.

Following the incident up to 40 incoming flights were diverted to Shanghai's international airport in Pudong.

A China Eastern official told the paper that the cause of the accident was under investigation.
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Old January 10th, 2007, 04:55 PM   #207
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Dulles, United win nonstop Beijing route


By Sean Lengell
THE WASHINGTON TIMES
January 10, 2007


The U.S. Department of Transportation yesterday awarded Washington Dulles International Airport and United Airlines a coveted nonstop route to Beijing.

Three other airlines -- American, Continental and Northwest -- also were competing to win the only new U.S.-to-China route, with each proposing service from a different U.S. city.

"That's a very big deal for United," said Darryl Jenkins, a Marshall, Va., airline industry analyst who worked on American's proposal. "The demand for the travel is growing faster than supply by a long shot so you're charging quite a bit for first-class and business-class fares, and all those seats are always full."

Several U.S. cities already have nonstop service to China: American flies nonstop to Shanghai from Chicago; Continental has service between Newark, N.J., and Beijing; and United already operates 28 weekly nonstop flights to China from Chicago and San Francisco. Washington is the largest U.S. metropolitan area without nonstop service to China.

The new daily service will begin March 25 and will take about 14 hours.
The Transportation Department said it chose United because its proposed Washington-Beijing route would benefit the greatest number of passengers. More people travel to China from the Washington metro area than from any other U.S. city that currently does not have nonstop U.S.-China service, the department said.

The Dulles-Beijing route is expected to provide a tangible as well as symbolic boost to Dulles, which served 27 million passengers in 2005 -- almost 5 million of whom flew on international routes.

Gerald L. Gordon, president and chief executive officer of the Fairfax County Economic Development Authority, said new air service to China will create more jobs, business opportunities and tax revenue for all of Northern Virginia.

"Whenever air service to new markets opens up, there is a significant increase in activity between the local businesses and those markets," Mr. Gordon said.

Washington-to-Beijing service will generate $275 million to $333 million annually for the Washington region's economy and create 3,400 to 4,100 jobs, according to the Capital-to-Capital Coalition, a joint endeavor among United, several Washington-area trade and business organizations and Metropolitan Washington Airports Authority, which operates Dulles and Ronald Reagan Washington National Airport.

United bested American, which sought to fly between Dallas-Fort Worth, Texas, and Beijing; Continental, which applied for service between Newark, N.J., and Shanghai; and Northwest, which applied for Detroit-Shanghai service.

Because the Washington region is among the country's largest job growth areas the past five years, particularly for high-tech jobs, the Dulles-Beijing route was the most sensible of the four choices, said the Washington Airports Task Force, a nonprofit group that promotes the expansion and enhancement of Dulles and Reagan airports.
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Old January 11th, 2007, 08:29 AM   #208
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Xinhua news:
Air China to step up services on delayed flights
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Old January 12th, 2007, 11:51 PM   #209
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Damn, so much Copy and Paste
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Old January 14th, 2007, 03:15 PM   #210
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HKIA Press Release:
Record-breaking Passenger Traffic at Zhuhai Airport -- Hong Kong-Zhuhai Airport Joint Venture Achieves Initial Success
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Old January 17th, 2007, 09:44 AM   #211
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China to cut jet fuel surcharge as world oil prices drop

BEIJING, Jan 17, 2007 (AFP) - China will cut the jet fuel surcharge on Chinese airline passengers following the drop in global oil prices, the nation's top economic planning body said Wednesday.

The fuel surcharge will drop to 50 yuan (6.4 dollars) from 60 yuan for short flights, and to 80 yuan from 100 yuan for flights of over 800 kilometres (496 miles), the National Development and Reform Commission said in a statement.

The new surcharge rates will take effect from January 21, said the statement posted on the commission's website.

World oil prices are currently at their lowest level since May 2005.
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Old January 18th, 2007, 08:30 AM   #212
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Michigan lawmakers want DOT to reconsider nonstop China route
17 January 2007

WASHINGTON (AP) - Michigan's congressional delegation wants the federal government to reconsider a tentative deal that passes over Northwest Airlines to give United Airlines the first-ever nonstop daily flight between Washington and China.

The delegation noted that 500 companies in Michigan and northern Ohio have a presence in Shanghai and more than two-thirds of the Fortune 500 companies in Michigan and northern Ohio have operations in China.

Northwest Airlines Corp., Michigan's largest air passenger carrier with a hub at Detroit Metropolitan Airport, had applied to offer service from Detroit to Shanghai. United also beat out applications from AMR Corp.'s American Airlines and Continental Airlines.

"Northwest's proposed Detroit-Shanghai route is critical to manufacturing and commercial interests in the State of Michigan that need improved access to the global marketplace," the lawmakers said in a letter to Transportation Secretary Mary Peters. It was signed by Democratic Sens. Debbie Stabenow and Carl Levin and nearly all the members of Congress from Michigan.

The lawmakers asked Peters to either reconsider the decision or "secure new authority for Northwest to bring new nonstop service to Detroit" and Michigan.

United can begin nonstop service between Washington and Beijing on March 25 if the tentative decision becomes final. The government is expected to review industry comments before issuing a final decision.
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Old January 19th, 2007, 09:21 AM   #213
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China Southern returns to profitability in 2006: report

SHANGHAI, Jan 18, 2007 (AFP) - China Southern Airlines Group, the country's largest carrier by fleet size, has swung back into annual profitability for the first time in five years, state media reported Thursday.

The Guangzhou based group recorded revenue of 46.5 billion yuan (six billion dollars) last year, according to the official Shanghai Securities News, citing company general manager Liu Shaoyong.

The newspaper report provided no other financial figures, with official 2006 results not expected until later in the quarter.

China Southern, which has a listed arm in Hong Kong and New York, booked profits in 2006 despite increased surging fuel prices and fiercer competition, Liu said, a sharp turnaround from a one billion-yuan first-half loss.

Last year the carrier hauled 49.2 million passengers or 31 percent of China's total annual volume.

Lifting sales was a move to electronic ticketing which totalled 5.5 billion yuan.

Despite the buoyant preliminary results China Southern is still likely to face more turbulence, analysts say.

The group, with its massive capital expansion plans for 2008-2010, which includes delivery of 50 new Airbus aircraft at a cost of 3.32 billion dollars, faces trouble due to its lack of recent profitabilty.

Chinese companies have been undergoing a painful restructuring process which includes the mandated sale of state-owned shares under share reform plans.

"China Southern cannot progress with its share reform plan... under the circumstances, it is unlikely foreign investors will buy a stake in the airline," said Guotai Junan analyst Alan Lam.

The group could however gain from government plans to promote internal routes since it is the most domestically focused of the big three.
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Old January 21st, 2007, 06:17 PM   #214
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Delta applies for U.S.-China route

NEW YORK, Jan 19 (Reuters) - Bankrupt Delta Air Lines Inc. (DALRQ.PK: Quote, Profile , Research) said on Friday it had filed an application with the U.S. Department of Transportation to start nonstop flights between Atlanta and Shanghai.

The No. 3 U.S. carrier said it proposes to start a daily, year-round nonstop service between the two cities beginning March 25, 2008.
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Old January 27th, 2007, 11:39 AM   #215
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Xinhua news:
DHL launches domestic air-express operation in China
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Old February 14th, 2007, 05:14 AM   #216
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China Southern expands international flights with 10 this year

BEIJING, Feb 14, 2007 (AFP) - China Southern Airlines, the nation's largest carrier by fleet size, plans to expand its international flights from Guangzhou city in southern China from 136 per week to 182, state media said Wednesday.

As part of the expansion plan, the company will launch 10 international direct routes this year departing from the city where it is based, the China Daily reported.

The new routes will link Guangzhou with Luanda in Angola, Dubai in the United Arab Emirates, Delhi in India, Sendai and Sapporo in Japan, and a number of other Asian cities, the report said.

"It is the first time for China Southern to launch so many international routes within a year," Si Xianmin, general manager of the company, was quoted as saying.

"The new routes will be strategically important for our company to become an airline company with very dense international flights," he added.

The newspaper said China Southern is also planning other new cross-border routes taking off from other cities in China this year.

China Southern is the only Chinese airline that operates direct flights to African countries. It launched late last year its first service to Africa, with a route linking Beijing to Lagos, Nigeria, via a stopover in Dubai.

By 2010, it will have 440 aircraft in its fleet, with 68 planes to be put into operation this year, Si said.
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Old February 19th, 2007, 04:33 AM   #217
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China Southern Airlines seen facing 'extreme' pressure on new Guangzhou routes
15 February 2007
AFX Asia

BEIJING (XFN-ASIA) - China Southern Airlines faces "extreme" competition on international flights from its Guangzhou hub, especially from Hong Kong-based Cathay Pacific, the Center for Asia Pacific Aviation (CAPA) said.

China Southern plans to expand its international services from Guangzhou, but it will take time for new routes to become profitable because nearby Hong Kong is the undisputed gateway to the region and also Cathay Pacific's base, CAPA said.

"China Southern faces extreme competition from Cathay Pacific, whose Hong Kong hub is the undisputed international and business gateway for the Pearl River Delta and whose operations have been strengthened significantly by the Dragonair takeover last year and increasing cooperation with Air China," the Sydney-based aviation consultancy said.

China Southern announced yesterday that it will launch 10 new international routes from Guangzhou this year, raising the number of international flights from the hub to 182 per week from 136 currently.

The airline, which has the densest domestic network of all Chinese carriers, has also invested heavily in recent years to develop a hub in Beijing to capture more premium demand.

But it has failed to achieve good profits in China's highly competitive market, despite also being very strong in the north and west of the country, CAPA noted.

China Southern carried 49.2 mln passengers in 2006, an increase of 11.5 pct from a year earlier, but its strong performance in the latter part of the year was weighed down by a loss of almost one bln yuan in the first half.

"China Southern's new Guangzhou routes will undoubtedly require some time to become profitable and taking on Air China and Cathay Pacific in the south and in Beijing single-handedly is a tall order," CAPA said.

(1 usd = 7.75 yuan)
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Old February 20th, 2007, 06:45 AM   #218
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China's Congested Skies
Between Military Maneuvers and Outdated Equipment, Travelers Face Agonizing Delays

By Bruce Stanley
16 February 2007
The Wall Street Journal

Hong Kong -- As a frequent flier to Chinese cities, Philip Leung has learned to expect long delays -- like the five-hour wait he endured last July before boarding a flight from Beijing to Hong Kong. The flight, scheduled to depart at 6 p.m., was delayed in frustrating increments, and he didn't emerge from what is normally a three-hour journey until 2:30 the next morning.

"I was furious," says Mr. Leung, a Hong Kong-based consultant. "Thank God it didn't cost me a customer or contract."

What Mr. Leung didn't know is that while he was steaming in an Internet cafe, only 30% of the airspace above him was open to passenger planes -- making China one of global aviation's most restricted countries. The reason is the powerful Chinese military, which controls the nation's skies.

Shanghai's Pudong International Airport shut down for four hours one afternoon in December when China's air force ran a drill. Airports in at least three other big coastal cities that fall under the Nanjing Military Area Command also had to close, forcing the diversion or delay of hundreds of flights, both foreign and domestic.

Adding further frustration for travelers, military affairs are a state secret in China, so there is no way to predict the snap shutdowns. In the Pudong shutdown, for instance, pilots said they assumed the closure had to do with military maneuvers, but passengers weren't told why their plane had landed in an unexpected airport, raising concerns there had been a crash or other calamity. A military-run newspaper noted that the drill had been a success.

The Civil Aviation Administration of China, the official regulatory authority for civilian air travel in China, declined to respond to requests for comment.

Under the military, China's aviation authorities have been slow to adopt practices that have become standard elsewhere in the world.

Planes flying from New York to Chicago can travel at any of about 13 altitudes. China limits civilian aircraft to flying at seven altitudes, which means fewer jets can enter the sky. Cathay Pacific Airways, for example, has just four altitudes to choose from -- roughly 29,500, 33,500, 37,400, and 41,300 feet -- for its planes traveling from Hong Kong to Shanghai.

Such constraints have taken a toll as Chinese commercial aviation has boomed, fueled by deregulation of the airline industry, a prospering middle class, a surge in foreign business people seeking opportunities and a plethora of new airlines. Tourists and corporate road warriors scurrying to do deals all over China are finding themselves stuck in sometimes agonizing delays.

"I can pretty much always bank on an hour's delay, and I think I'm doing well if it's less than that," says Irishman Joe Healy, a director of engineering at Emerson Climate Technologies in Hong Kong.

Airport closures due to bad weather exacerbate the problem. Alexander Mackintosh, a partner at Ernst & Young, recalls taking a flight last month with Hong Kong Dragon Airlines, or Dragonair, that left Hong Kong for Beijing after a three-hour delay. It was minutes from its destination when the pilot abruptly turned around, on account of heavy fog, and returned to Hong Kong.

"Air traffic congestion has become a serious issue on several of our routes in China Mainland," Dragonair said in a statement. "We have been in contact with the relevant government departments in an effort to seek an improvement in the situation. "

Pilots grouse that even blue skies are no guarantee of smooth flying, because China's air force often picks the clearest days to practice. Congested corridors over the Chinese coast facing Taiwan, which Beijing considers a renegade province, are particularly prone to military disruptions, they say -- the reason for last month's airport shutdowns.

When the limited routes into southern China get too crowded, air traffic controllers on the mainland try to slow the inflow of planes by reducing the number of altitudes available to them. Jetliners bound for China or Europe from Southeast Asia and Australia can get backed up and forced into fuel-guzzling holding patterns as a result.

Along China's western frontier, a few international flights have been pushed "right to the ragged edge" of having to break away to refuel in neighboring Kazakhstan, says one aviation expert. Japan Airlines requires its planes heading into Chinese airspace to load up with extra fuel in case of in-flight delays or diversions.

Chinese airlines flying domestic routes often postpone their departures to take on as many late-arriving passengers as possible, and China's smaller carriers have few planes in reserve to use when delays ricochet through their networks. Deng Jie, owner of a private company in Beijing, says he has taken some local flights that left as much as a day behind schedule.

"The situation has definitely gotten worse in the past two years -- progressively worse," says a foreign pilot who has flown to China for 14 years. Hong Kong's government reports a tripling in departure delays from its airport over the past three years, to 2,996 last year from 973 in 2004.

Because delays and cancellations tend to worsen throughout the day, some passengers try to beat the system by flying as early as possible. Cathay Pacific Airways has a 3:25 a.m. cargo flight from Hong Kong to Beijing that also carries as many as 100 passengers. The flight almost always leaves on time and, in spite of the ungodly hour, with most of its seats full.

With the 2008 Olympic Games looming, however, there have been signs that the generals who control China's airspace are easing up a bit. To help reduce congestion, they agreed last year to open a new corridor that trims up to 20 minutes off flight times between China and Europe. China has since authorized another new route and is considering opening a third, possibly in time for the Olympics, IATA says.

Within the past 18 months, China's three largest cities -- Beijing, Shanghai and Guangzhou -- have all installed new air traffic control equipment that is "light years ahead" of what most Western countries use, according to one foreign airline executive. The new equipment enables controllers, for example, to track each plane electronically and digitally, whereas controllers formerly used a hand-written system.

China generally requires an airliner to fly with a cushion of roughly 2,000 feet of empty space between it and the next plane directly above it, and a similar cushion between it and the next plane directly below it. This is an old standard for flight safety, designed to help prevent mid-air collisions. But aviation technology has improved to the point that most countries now require a vertical cushion, or spacing between planes, of just 1,000 feet instead of 2,000 feet. China plans to change its rules and introduce 1,000-foot vertical spacing of its own on August 30, says Yan Xiaodong, a director at the North China Air Traffic Management Bureau, a regional sub-office of the CAAC. This would let up to twice as many planes fill the sky on any given air route, thus easing congestion.

The Civil Aviation Administration of China suggests it can step up work on efficiency partly because the nation's aviation safety record has improved so much in recent years. China recently hit a record 5.8 million flying hours without accidents. In another welcome sign, Chinese flag carrier Air China says it plans this year to start sending text messages to its passengers' cellphones to notify them ahead of time about any flight problems.

But right now, flying in China can be a confounding exercise. To minimize the pain, China hands advise fellow fliers to avoid traveling at the most popular times and to take only carry-on luggage in case they need to switch flights at the last minute.

Mr. Leung, the consultant, recommends seeking out a good passenger lounge.

"It's a must," he says, "in order to keep your sanity."

---

Yang Zhou and Kersten Zhang contributed to this article
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Old February 22nd, 2007, 04:25 AM   #219
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Thick fog shrouds Beijing, delays flights
By Chris Buckley

BEIJING, Feb 21 (Reuters) - A dense fog covering Beijing cut visibility to a few dozen metres and delayed flights in and out of the national capital for much of Wednesday, disrupting China's week-long Lunar New Year celebrations.

The fog that has descended over large parts of China in the past two days made it impossible to see buildings more than a short distance away, hid traffic lights in a dim shroud, and forced long delays at Beijing's Capital Airport.

Chinese television news reported at midday that over 150 flights had been delayed in Beijing. Planes did not start taking off or landing until late afternoon, when thousands of passengers were camped out waiting for the weather to improve. Some international arrivals were diverted to Shanghai or other cities.

A roar of relief echoed through the air terminal when loudspeakers announced that flights would begin taking off. By late afternoon, a breeze had diluted some of the acrid fog, increasing visibility and allowing planes to leave.

"Flights are taking off but quite a few have been cancelled already," a staff member on Beijing airport's inquiry line said. "It will take a while before schedules are back to normal, depending on the weather."

China is in the middle of its traditional Lunar New Year holiday. The holiday has cleared the traffic that usually snarl Beijing's roads, but it has also brought an influx of tourists.

Highways around Beijing and the nearby port city of Tianjin have been closed to prevent traffic pile-ups, Chinese television news reported. The fog has also cut visibility and roads in surrounding provinces.

China's national meteorological service warned that the fog covering the country's east raised risks of traffic accidents.

"As well, the air quality in the foggy weather is quite poor and urban residents should reduce outdoor activities as much as possible," the meteorological service warned on its Web site ( www.nmc.gov.cn ).

The fog is likely to stay until Wednesday night, when a cold front may bring winds that sweep it away, the weather service said. (Additional reporting by Ben Blanchard)
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Old February 26th, 2007, 04:52 AM   #220
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China Southern freighter expansion to lift Baiyun airport
Move will force Hong Kong to rethink air cargo policy as dominance comes under threat, say analysts

26 February 2007
South China Morning Post

China Southern Airlines, the biggest mainland airline by fleet size, plans to grow its freighter fleet to 14 aircraft from two by 2011.

Analysts say the move will mean more freight connections and volume for Guangzhou's Baiyun International Airport, forcing Hong Kong to rethink its air cargo policy.

Like its mainland rivals, China Southern has been slow to develop its freighter business because of a long-standing imbalance between exports and imports.

Load factors for inbound cargo traditionally have been much lower than for outbound, keeping profit margins thin.

China's airlines operate only 33 freighters with 7,700 tonnes of capacity. UPS and FedEx, the two biggest dedicated cargo carriers in the United States, between them operate 1,000 freighters.

However, China's swift economic growth, spurring demand for such prime air freight commodities as high fashion, fine wines and delicate electronic products, means that imports and exports are coming into a better balance.

Chinese airlines have begun forming cargo alliances with international carriers.

Shenzhen Airlines teamed up with Lufthansa to form Shenzhen-based Jade Cargo Airlines which operates two Boeing 747s and plans to expand the fleet to six aircraft by next January.

China Southern has a code-sharing arrangement with Air France Cargo-KLM Cargo. "We can increase our load factor by exchanging pallets and extend our reach to Europe where we don't have enough coverage," a China Southern spokesman said.

He declined to comment on market rumours that China Southern would set up a joint venture with its code-sharing partner.

By 2011, China Southern expects to take delivery of six Boeing 777s, which can stay in the air for 10 hours and six Airbus A300s which can be adapted for passenger and freight service. The first of the A300s, which are principally designed for use on regional routes, will be delivered at the end of this year.

Analysts say such developments pose a serious challenge to Hong Kong's long-standing dominance of the air cargo market in south China.

"Hong Kong's superior connectivity and the frequency of flights on key international routes, which facilitates efficient 'just-in-time' operation for exporters, is fast eroding," said David Dodwell, the chief executive of aviation consultancy Strategic Access.

In the past five years Baiyun Airport's role as an international hub has grown. Another 10 international destinations have been or will be launched this year.

"If we [in Hong Kong] stumble, the price we pay is likely to be substantial," Mr Dodwell said.

He said the Hong Kong government needed to update the import-export ordinance to facilitate more transshipment business.

And he said the efficient use of air space was being hindered by the conservative air spacing regime in Hong Kong and the refusal by the Beijing government to allow planes bound for or leaving in Hong Kong to fly through the mainland's air space below 10,000 feet.

"I can see healthy growth of 5 per cent to 8 per cent a year in Hong Kong for the next five years," said Matthew Ma, vice-president of Cargolux, an airline based in Luxembourg. "It is a performance-based industry; it's not only capacity that counts."

Mr Ma said Guangzhou could not match Hong Kong for reliability and just-in-time management. However, Hong Kong still needed to embrace the "open skies" concept and address the issue of high service charges, he said.
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