CN | China - Aviation

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Note: This is a new thread for the aviation news in China.

Xinhua news:
Airbus commits to 20 more years of training in China

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China Southern loss doubles on fleet expansion
Alman Loong
28 April 2006
Hong Kong Standard

China Southern Airlines, the country's largest carrier by fleet size, said its first- quarter net loss more than doubled as it approved a plan to buy more assets.

The Guangzhou-based carrier said net loss in the first three months was 665 million yuan (HK$643.25 million), compared with a loss of 285 million yuan a year ago despite revenue rising 13 percent to 9.4 billion yuan from 8.3 billion yuan.

The figures are based on mainland accounting standards.

China Southern also said its board has approved a proposal to acquire its parent's unit, China Southern Airlines Group (Hainan), as it aims to expand the asset size.

The listed carrier will pay 5.15 million yuan in cash to its parent company and 350 million yuan to the unit's creditors. The parent company, China Southern Airlines Group, acquired the unit last year as part of a deal to buy China Northern Airlines.

China Southern said in a statement that total assets of the unit were valued at 355.15 million yuan at the end of June 2005, consisting mainly of 103.02 million yuan in cash, 55.11 million yuan in bills and trade receivables, and 160.97 million yuan worth of airplanes.

In the same period, its debts stood at 350 million yuan, including airplane repair expenses, jet fuel and takeoff and landing fees, which will be paid directly by China Southern to the creditors.

China Southern, which is due to report its 2006 first-quarter earnings today, posted a net loss of 1.85 billion yuan last year amid rising fuel costs and stiff competition in the domestic aviation market.

``As the listed company keeps on acquiring its parent's high-debt assets, it will have negative impact on its operating business,'' said South China Brokage analyst Andes Cheng.

He said it will be difficult for China Southern to return to profit until 2010 because of its fast fleet expansion, while stiff competition will erode its margins.

Meanwhile, China Southern has hired BNP Paribas, Calyon Corporate and Investment Bank and Societe Generale to arrange a US$450 million (HK$3.51 billion) loan to finance 10 aircraft, market sources said.

The 10-year loan will cover six A320-200s and four Boeing 737-700s, with the first to be received in June.

The company chose French banks in order to a use a French tax lease, which can reduce a company's taxable income and lower financing costs by half, market sources said.

The sources said the loan covers 80 percent of the US$540 million purchase price of the 10 aircraft.

The company is also seeking finance for three additional A320s, market sources said.

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China's Hainan Air Q1 net falls, fuel prices weigh

SHANGHAI, April 29 (Reuters) - China's Hainan Airlines Co. Ltd. , partly owned by billionaire financier George Soros, saw its net profits fall 11.7 percent in the first quarter as higher fuel prices squeezed margins.

The Chinese carrier, based in the sun-drenched southern resort island of Hainan, booked a net profit of 12.09 million yuan from January through March, versus a net profit of 13.69 million yuan a year earlier, it said in a statement carried in the official Shanghai Securities News on Saturday.

For the full year 2005, it swung to a net loss of 215.82 million yuan from a net profit of 90.65 million yuan a year earlier, far lagging a forecast given by the chairman of the listed company's parent earlier this year.

Chairman Chen Feng had told Reuters that he expected 2005 earnings to come at between $10 million and $12 million. If not for a soaring fuel bill, it could hit $40 million, he added.

Hainan Air, mainland China's number-four carrier, mainly flies to domestic destinations, but has expanded its network to include Bangkok, Kuala Lumpur, Osaka and Budapest.

Other Chinese airlines, such as China Eastern Airlines Ltd. , have also fallen victim to high oil prices.

Hainan, which plans to change its name to Grand China Air after absorbing three smaller rivals, expects to list its shares in Hong Kong at some point in 2007 at the latest, Chen said in February.

Grand China Air has raised $420 million in an initial private placement and share sale, and is hoping to raise another $250 million.

Hainan Air's yuan-denominated A shares -- open to select foreign investors -- rose more than 9 percent in the first quarter, slightly underperforming the market's <.SSEC> 12 percent gain. ($1=8.014 yuan)

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Chinese airlines in the red after first quarter

BEIJING, May 22, 2006 (AFP) - Chinese airlines posted total losses of 2.14 billion yuan (267 million dollars) in the first quarter 2006 due to high jet fuel prices, state press reported Monday.

Although China's air travel market is booming, with passenger numbers, as well as cargo and mail traffic, expected to double by 2010 from last year, airlines continue to suffer major losses.

"The main reason for these losses was the raising of prices of fuel prices," the Beijing Times reported quoting the Civil Aviation Authority of China (CAAC).

China Eastern, one of the country's three biggest airlines, in April reported a net loss of 467.31 million yuan for 2005, blaming higher aviation fuel and other operational costs, a sharp turnaround from 2004.

Only three smaller regional companies -- Shenzhou, Xiamen and Hainan Airlines -- recorded profits, the newspaper said.

At the end of the first quarter, China owned 883 planes and is forecast to nearly double the fleet by 2010.

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China Southern, China Airlines cargo JV deal far off - analysts
26 May 2006

BEIJING (AFX) - A cargo joint venture between China Southern Airlines and Taiwan's China Airlines would allow both carriers to strengthen their operations in strategically important markets, analysts said.

But although the airlines are reportedly discussing a partnership, analysts said a deal is unlikely to be struck soon.

'It will benefit both companies... but it depends on the situation across the Taiwan Strait and there is unlikely to be any substantial progress in the near future,' BOC International analyst Julia Tang told XFN-Asia, following reports in the Taiwan press of a potential partnership between the airlines.

There are no direct air links between China and Taiwan and most cargo flights between them go via Hong Kong.

Taiwan's Economic Daily News cited unidentified industry sources as saying the two airlines are in talks about a cargo joint venture.

China Airlines spokesman Johnson Sun told the newspaper that the carrier had no immediate plans to cooperate in cargo services with Guangzhou-based China Southern, but Xinhua Far East China analyst Tony Xia said that both sides are likely to be looking for an agreement.

'I think both parties have the intention of reaching an agreement,' he told XFN-Asia.

Earlier this week the Shanghai Securities News quoted China Southern's vice general manager Xu Jiebo as saying that the carrier is talking with several strategic and potential investors about establishing a cargo joint venture.

Xu did not provide details of possible partners.

If the two carriers establish a cargo joint venture it would help China Southern strengthen its cargo operations in the international market, while China Airlines would further boost its presence on the mainland following its purchase in January of a 25 pct stake in Yangtze River Express Airlines.

A partnership would also provide China Southern with valuable management experience, Xia said.

Guotai Junan analyst Alan Lam agreed that a tie-up would be beneficial to China Southern, which has weaker cargo operations than its two main national rivals, Air China and China Eastern.

China Southern's cargo operations contributed less than 10 pct of the company's total revenue in 2005, Lam said.

'China Southern wants to improve its international exposure, and maybe China Airlines can help it get more international cargo to Guangzhou or major hubs to allocate to second tier cities,' Lam told XFN-Asia.

But he added that the benefits would be limited because of the lack of a direct link between Taiwan and the mainland.

'There is no news about the opening of a direct link and I do not think it will immediately benefit China Southern,' Lam said.

Ivan Chung, also an analyst with Xinhua Far East China, added that a partnership between China Southern and China Airlines would help both companies save costs.

'There is no direct linkage between Taiwan and China, airlines have to go to Hong Kong, but if China Southern and China Airlines work together they will make significant cost savings,' Chung said.

The new Baiyun International Airport in Guangzhou, where China Southern is based, also wants to become a major hub in the region.

'Baiyun has a lot of room for development, but China Southern itself is not strong enough to drive the traffic so it needs a foreign partner,' Chung said.

'China Airlines can do that, they dominate the Taiwanese cargo market and can divert some of their existing business to China Southern or Guangzhou,' he added.

Lam agreed that getting a foothold in the growing Chinese market would be good for China Airlines' long-term growth prospects.

'China Airlines in the long-term may benefit from the fast-growing cargo industry within China,' he said.

The airline has tried to form partnerships with major Chinese carriers in the past.

A long-running bid for a stake in China Eastern's cargo arm ended after it failed to win approval from the Chinese government, Lam said, adding that China Eastern was also unwilling to sell a major contributor to its earnings growth.

China Airlines's 40 mln usd acquisition of a holding in Yangtze River Express Airlines, a subsidiary of China's Hainan Air group, signalled its intention to compete on the mainland, and a tie-up with China Southern would further strengthen its presence here, Lam said.

But he added that a cargo joint venture with China Southern is unlikely to be profitable in the short-term due to the fiercely competitive domestic Chinese market.

'The cargo market is very competitive in China...it is quite strange for an overseas company to buy into the cargo arm of China Southern, especially as its cargo operations are not doing so well and it has just a few aircraft,' Lam said.

'If China Airlines wants to expand its coverage within China this strategy is ok, but if it wants to increase its linkage to China and other overseas countries this joint venture may not be as good as buying a stake in China Eastern,' he added.

China Southern's cargo fleet consists of two Boeing 747 freighter aircraft.

The company has said it plans to convert six A-300s into cargo jets by the end of this year.

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Indian hostesses to start flying on Chinese airline's flights to New Delhi
28 May 2006

BEIJING (AP) - Fifteen Indian air hostesses will soon start serving passengers on a Chinese airline's flights from Shanghai to New Delhi, according to Chinese media reports.

The women will start working on the China Eastern Airline flights June 1, according to the Web site of the official People's Daily newspaper.

"The language is the biggest advantage for them. And as people coming from the same country, they would observe and know better the needs of our overseas passengers," Wu Wenhua, manager of the company's foreign cabin attendants department, told China's state-run China Radio International.

The airline is planning to hire some Russian hostesses in June, CRI reported on its Web site.

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Air China Cargo to launch Beijing-Dallas Fort Worth service
1 June 2006

BEIJING (AFX) - Air China Cargo will begin a new thrice-weekly service between Beijing and Dallas Fort Worth International Airport on June 17, using Boeing 747 freighters.

Air China Cargo currently serves five US destinations - Los Angeles, San Francisco, Portland, Chicago and New York.

In a statement, Dallas Fort Worth airport said China is the airport's largest air cargo trading partner.

China accounted for more than 66,000 tons of air cargo into the Dallas/Fort Worth customs district last year, the statement said.

Air China Cargo's shareholders are Air China, CITIC Pacific Ltd and China Capital Airport Holding Co, which hold 51 pct, 25 pct and 24 pct stakes, respectively.

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It seems that the idea of setting an A320 line in China is little by little materializing.

From www.airbus.com:

Airbus Chinese A320 final assembly line to be located in Tianjin
8 June 2006


The National Development & Reform Commission of China (NDRC) and Airbus announced today that the site for a potential A320 family final assembly line (FAL) in China is Tianjin Binhai New Coastal District, a state level new development zone. This follows the signing of the memorandum of understanding between NDRC and Airbus in December 2005 to further upgrade cooperation between Airbus and China in the field of civil aviation.

Out of 4 cities considered for the establishment of the FAL, Tianjin has been selected after a thorough evaluation including multiple criteria such as, facility site and land, sea port proximity, airport characteristics, labour and industrial capability.

The site selection is an important step, which enables the on-going feasibility study to continue, with an objective to reach a final joint decision on the setting up of the FAL by end September 2006. Subject to such decision, the shared target is to commence FAL operations in 2008 with a production ramp up to four aircraft per month by 2011.

Industrial cooperation between Airbus and China has been steadily increasing in recent years. In addition to the FAL feasibility study, a number of other initiatives are already underway. They include targets for increased parts procurement, as well as the setting up of the Airbus (Beijing) Engineering Centre (A(B)EC) which was inaugurated in July 2005 with a target of 200 Chinese engineers by 2008. Furthermore, a participation of up to five per cent of airframe content in the A350 programme is being proposed to the Chinese aviation industry, with specific design of the parts to be manufactured in China being carried out at A(B)EC.

Headquartered in Toulouse, Airbus is an EADS joint company with BAE Systems.

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China Eastern Air: 12% Of '06 Jet Fuel Consumption Hedged
12 June 2006

HONG KONG (Dow Jones)--China Eastern Airlines Ltd. (CEA) said Monday it has hedged about 12% of its expected jet-fuel consumption this year as it seeks to reduce the impact of high fuel prices.

China Eastern, which is one of China's three main carriers, said it hedged only 8% of its jet fuel for all of last year, reflecting a slight increase in the company's fuel hedging efforts so far this year.

The Shanghai-based carrier set up a committee headed by its president to manage the its aviation-fuel risks, China Eastern said in a statement to the Hong Kong stock exchange. The high cost of fuel was the prime factor that contributed to the airline's swing to a net loss of CNY467.3 million last year.

Jet-fuel expenses soared 64% last year and accounted for 36% of the airline's total operating expenses, compared with 30.1% in 2004. As a result, China Eastern's operating expenses surged 37% in 2005 from the year before.

China Eastern can only hedge fuel for flights operating from outside the country, as Chinese airlines have no choice but to buy fuel for domestic flights from state-owned China Aviation Oil Holdings Corp. at prices set by the fuel provider. Domestic flights account for the bulk of China Eastern's network.

By contrast, Chinese flag carrier Air China Ltd. (0753.HK), which has a higher percentage of international flights hedged 12.3% of its fuel consumption last year.

Air China has said it aims to hedge more than 30% of its fuel intake this year.

In 2005, international routes accounted for about 35% of China Eastern's passenger traffic, as measured by revenue passenger kilometers.

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China Southern Air May Passengers +7.2% On Year To 3.9M
12 June 2006

HONG KONG (Dow Jones)--China Southern Airlines Co. (ZNH) said Monday it carried 7.2% more passengers in May than in the same month last year, down from a 14% year-on-year rise in April.

The Guangzhou-based airline carried 3.9 million passengers in May, while its cargo volume rose 0.3% to 62,320 metric tons.

The carrier didn't provide year-earlier passenger or cargo numbers or elaborate on the figures, which were published on its Web site.

China Southern's passenger load factor, a measure of how much available capacity was filled, fell to 68.80%, down from 74.6% in April.

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Air China To Open 3rd Tibet Airport,Expand Tourism-Report
13 June 2006

BEIJING (AP)--China will open a new airport in southeast Tibet, near the border with Myanmar and India, in July, opening a remote area famous for its natural scenery to an additional 120,000 visitors a year, state media said Wednesday.

Nyingchi Airport was built and will be managed by Air China Southwest Branch Co., a subsidiary of China's flag carrier Air China Ltd. (0753.HK), the official Xinhua News Agency said.

Tibet already has two airports, one in the capital, Lhasa, and another in the eastern town of Qamdo.

The city of Nyingchi is about 120 kilometers from the Yarlung Zangbo River Grand Canyon, which Chinese scientists claim is the world's deepest canyon.

Xinhua quoted a company spokesman as saying that because the Nyingchi Airport is at a lower altitude than the two existing airports, it is "an ideal first stop for tourists to gradually adapt themselves" to Tibet's high altitude. The spokesman's name was not given.

The airport has a designed annual passenger flow of 120,000, it said. Air China will operate regular Boeing-757 flights between Chengdu in China's southwest and Nyingchi, Xinhua said.

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Cathay Pacific deal could spur a shake-up in China aviation
By Bruce Stanley
14 June 2006
The Wall Street Journal Asia

Hong Kong -- MOVES BY Cathay Pacific Airways to take over Hong Kong Dragon Airlines and strengthen its ties with Air China will turn up the heat on the mainland's other two big state-run airlines and could trigger a shake-up in China's aviation market.

When the airline announced its HK$8.22 billion (US$1.06 billion) buyout of Dragonair Friday, Cathay's shares surged 7% to HK$13.85, boosted by investors who had long waited for Cathay to capture a significant piece of the mainland, the world's fastest-growing passenger market. Dragonair flies to 23 cities in China, more than any other carrier based outside the mainland.

Cathay's gain may be a loss for China Eastern Airlines and China Southern Airlines. The two already are posting losses and burdened by debt. Confronted now by a Dragonair reinforced with the financial resources and expertise of one of the world's best-managed airlines, China Eastern and China Southern may have to join together or seek outside investors, industry officials and analysts say.

"Dragonair is already putting enough pressure on them, and if you add Cathay to the fray, they're going to be even more breathless," says Peter Lok, a nonexecutive director at both China Eastern and China Southern.

Mr. Lok, a former head of Hong Kong's civil aviation department, argues that Beijing should encourage China Eastern and China Southern to "combine forces and not kill each other," perhaps by forming an alliance similar to that of Cathay Pacific and Air China. "That's probably the only way out, I'm afraid," he says.

With Friday's deal, Cathay and Air China elevated their existing partnership, with Cathay raising its stake in Air China to 20% from 10%, while Air China will take a 17.5% stake in Cathay.

Although Cathay's strategic coup had been in the works for some time, it comes at a tough time for the two state-run carriers. Both have seen their revenue swell, as China's expanding middle class has taken to the air for business and pleasure. But high prices for jet fuel have cost the airlines dearly, and aggressive purchases of new aircraft have stretched their balance sheets.

Mr. Lok says the two are caught in a bind. Outclassed by foreign rivals on international flights, they are driven to compete for the domestic market and are adding planes in a bid to grab market share. Yet the Chinese government, which controls aircraft purchases on the mainland, aggravates an oversupply problem by buying large numbers of jets from U.S. and European suppliers for political reasons, Mr. Lok says.

China Eastern also faces growing competition at its hub in Shanghai, China's commercial center, in particular from its hometown rival Shanghai Airlines and Air China, both of which signed up last month to join the Star airline alliance.

A China Eastern official says Cathay's deal with Dragonair and Air China puts "great pressure" on the airline, especially on its lucrative Shanghai-to-Hong Kong flights. Dragonair flies this route already, and analysts say it will become an even tougher competitor under Cathay's control.

China Eastern has "got to respond" to this threat, says Damien Horth, an analyst at UBS in Hong Kong. The airline has been talking for more than a year with potential investors, including Singapore Airlines. Some analysts see Emirates Airlines, the rapidly expanding Middle Eastern carrier, as another possible suitor. Singapore Airlines and Emirates declined to comment on the matter.

China Eastern's base in Shanghai should make it the more attractive prospect for an investor, says Mr. Horth, who, largely for this reason, rates the company a buy, with a 12-month share-price target of HK$1.40. He gives China Southern, based in the less-frequented southern city of Guangzhou, a neutral rating and a price target of HK$2.10.

Shares in China Eastern, which trade in Shanghai, Hong Kong and New York, closed in Hong Kong at HK$1.12 on June 2, the last day before trading in the shares of Cathay Pacific and Air China was suspended on a report of the impending deal. Shares in China Southern, which trade in Shanghai and Hong Kong, closed that day at HK$1.92.

China Eastern closed yesterday in Hong Kong at HK$1.07, down 3.6%, and China Southern ended 4.5% lower at HK$1.68.

China Southern, which generates about 75% of its revenue from domestic routes, might be less directly threatened by Cathay's power play than China Eastern, which garners half its revenue from flights to Hong Kong and other cities outside the mainland.

China Southern officials declined to comment on the possible impact of the Cathay deal on their company.

Profitability is a chronic problem at the two carriers. China Southern posted an annual loss of 1.85 billion yuan ($230.9 million) in 2005, widening from a 2004 loss of 48 million yuan. For the first quarter of this year, it reported a loss of 665 million yuan, a further deterioration from its year-earlier loss of 285 million yuan.

China Eastern had a loss of 467.3 million yuan in 2005 after earning a net profit of 320.7 million yuan in 2004. It posted a first-quarter loss of 955.1 million yuan, compared with a year-earlier net profit of 50.4 million yuan.

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Air New Zealand to start service to Shanghai

WELLINGTON, June 19, 2006 (AFP) - Air New Zealand said Monday it would start flying its first route to mainland China with flights between Shanghai and Auckland three times a week from November.

The New Zealand flag carrier currently flies to Hong Kong and group general manager Ed Sims said the new service was a "major step forward" for the airline.

"Air New Zealand will be the only airline flying non-stop from Auckland to mainland China's fastest growing and most affluent commercial hub," Sims said in a statement.

He also told the the New Zealand Herald newspaper the new route would be a big boost for Chinese tourism to New Zealand and the airline estimates two-thirds of seats will be filled with Chinese travellers.

He said about 130,000 Chinese visit New Zealand each year currently.

"Even being conservative, I think having a direct flight will double those numbers in a relatively short period of time," he said.

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6 China Eastern pilots hold hunger strike over resignation dispute, report says
23 June 2006

BEIJING (AP) - Six pilots in a dispute with state-owned China Eastern Airlines over their resignations held a five-day hunger strike after the airline refused to negotiate with them, a newspaper reported.

An airline employee said Friday the dispute had been resolved.

The pilots -- who were not identified -- began their hunger strike on June 15 after the airline's general manager refused to meet them for discussions, the China Daily newspaper said in an editorial published Thursday.

A man who answered the telephone at the administrative offices of China Eastern Airlines in Shanghai said "the hunger strike is over and the dispute between the pilots and the airline has been settled."

He refused to answer further questions or give his name, and referred calls to the airlines' press office, where phones were not answered.

The pilots -- a captain and five co-pilots -- had said they wanted to resign due to low pay, unsatisfactory working conditions and the company's failure to relocate their spouses to where they were living, the China Daily editorial said.

However, the newspaper said the pilots were reportedly resigning because a private airline had offered to pay them 30 percent more than what they were getting at China Eastern.

China Eastern demanded the captain compensate the company 6 million yuan (US$750,000; euro595,000) and the others pay 3 million yuan (US$370,000; euro293,000) each in order to resign, the newspaper said.

China's aviation regulator said in February that a lack of qualified pilots and other personnel is one of the greatest challenges facing the country's rapidly expanding airline industry.

About 138 million people flew in China in 2005, up 105 percent from 2000. The number is expected to double again by 2010.

A previous China Daily report said 10 captains resigned from the airline in December to work for private airlines.

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Asia Pulse
June 26, 2006 Monday 10:02 AM EST
China hoping to receive 1st Airbus A380 before Olympics

China is likely to get its first Airbus A380 on schedule despite general delays in the delivery of the huge plane, Airbus said Thursday. "We are doing our best to ask our headquarters to ensure that China receives its first A380 before the 2008 Olympic Games," said Airbus China Ltd spokesman Kevin Gu.

* "China is one of the most important markets for Airbus given the fact that we have put engineering, training and customer support facilities into the country and will even produce aircraft here," Gu said.

* Gu said pilots from China Southern Airlines (SEHK:1005, SSX:600029), the first Chinese airline to fly the A380, will receive flight training in France next month as scheduled.

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China Eastern Airlines says it will buy 30 Airbus jets
26 June 2006

SHANGHAI, China (AP) - China Eastern Airlines Corp., one of China's three biggest carriers, said Tuesday it has agreed to buy 30 Airbus A320 jetliners to meet growing demand in booming Chinese air travel market.

The airline didn't give a purchase price but said it would pay less than the 13.9 billion yuan (US$1.7 billion; euro1.4 billion) total list price of the planes. China Eastern said it expects to take delivery between May 2008 and November 2010.

The announcement comes after China's government announced this month that it has approved Airbus's plan to open an assembly plant for A320s in the eastern city of Tianjin.

China Eastern didn't say whether the aircraft it is buying will come from that factory.

Airbus, based in Toulouse, France, and its U.S. rival, Seattle-based Boeing Co., are looking to China's booming air travel market to drive sales in coming decades.

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China turns to foreign pilots to ease shortage

BEIJING, June 26 (Reuters) - China's airlines are opening up their cockpits to foreigners in a bid to solve a serious pilot shortage, state media reported on Monday.

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

The number of passenger planes in service in China was expected to double to 1,600 in the next five years, the China Daily newspaper quoted an aviation official as saying.

Every 100 new planes would require 1,000 extra pilots, China's industry regulator said in February, while official media estimate that Chinese flying schools can only graduate 600 pilots a year.

One pioneering foreigner, Philippe Burtonboy, a pilot with United Eagle Airlines Co., one of the country's four private airlines, had become famous, the paper said.

"The 50-year-old Belgian is a celebrity in Chengdu, even though he has been here for just four months, as he is the first foreign captain to pilot a plane in southwest China," the paper said.

Last month, China Eastern Airlines announced 16 Indians had completed professional training as air stewardesses, the first group of Indian cabin staff ever hired by a Chinese airline. ($1=8.001 Yuan)

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Air France: China Southern Closer To SkyTeam Alliance
28 June 2006
Edited Press Release

PARIS--Air France KLM (AKH) Wednesday said the SkyTeam alliance signed a Global Airline Alliance Adherence Agreement with China Southern Airlines (1055.HK), the largest airline in the People's Republic of China, indicating that the Chinese carrier is on track for official alliance membership.

The agreement is a formal step in the alliance's new member process and outlines China Southern Airlines' commitment to meet the stringent set of standards to be officially recognized as a member of SkyTeam.

Since signing an initial agreement in 2004, China Southern Airlines has been making significant progress in its preparation to join SkyTeam and has been working with the alliance's members to expand bilateral cooperation with alliance carriers.

Currently, five SkyTeam member airlines - Air France, Delta Air Lines, KLM Royal Dutch Airlines, Korean Air and Northwest Airlines - have established relationships with the airline on cargo and/or passenger services.

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China to raise fines to combat serious problem with in-flight phone use
28 June 2006

BEIJING (AP) - China's aviation regulator plans to quadruple fines for airline passengers who use mobile phones during flights due to concerns that the calls are threatening flight safety, state media said Thursday.

Fines for in-flight celphone use will be raised to 2,000 yuan (US$250;euro200) from the current 500 yuan (US$60;euro50), the official China Daily newspaper said, citing draft regulations from the General Administration of Civil Aviation.

"This illegal behavior has become a serious problem interfering with flight safety," the China Daily newspaper quoted Liu Weiming, an aviation law professor with the Civil Aviation Management Institute of China as saying.

It did not give any figures for how serious the problem is.

The report said fines for smoking and drinking without permission would also be raised but did not say by how much.

China's airline industry has been expanding at breakneck speed for the past five years, with many people flying for the first time and unfamiliar with in-flight rules.

About 138 million people flew in China in 2005, up 105 percent from 2000. The number is expected to double again by 2010.

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China's largest cargo airlines to merge -paper

SHANGHAI, June 30 (Reuters) - China's top two cargo airlines, Air China Cargo Co. Ltd. and China Cargo Airlines Ltd., are set to merge by the end of this year, looking for more clout in a market dominated by foreigners, state media said on Friday.

Foreign carriers now control about two-thirds of the country's air cargo volume.

The two domestic firms, which are affiliated with local giants Air China <0753.HK> and China Eastern Airlines <600115.SS><0670.HK><CEA.N>, will merge into one company based in Shanghai, the country's economic hub, according to the official Shanghai Securities News.

The joint company, which will use the China Cargo Airline Ltd. name, will be a 50-50 venture between Air China and China Eastern, the newspaper said, citing Sun Zhongli, vice general manager with China Cargo Airline.

Air China Cargo is owned by Air China, with a 51 percent stake, along with CITIC Pacific Ltd. <0267.HK> and China Capital Airport Holding Co.

Established in 1998, China Cargo Airlines is 70 percent owned by China Eastern, with China Ocean Shipping (Group) Co., or COSCO, as its other major shareholder.