CN | China - Aviation

[hkskyline]

Regulator To Decide On China Eastern,Shanghai Air Merger-Report
3 August 2009

BEIJING (Dow Jones)--China's aviation regulator is likely to issue its decision this month on a proposed merger between China Eastern Airlines Corp. (CEA) and its smaller rival Shanghai Airlines Co. (600591.SH), the Shanghai Securities News reported, citing an unnamed person familiar with the situation.

The two airlines jointly submitted a merger application to the Civil Aviation Authority of China, the paper reported Saturday.

The airlines have to receive approval from various government departments, including the aviation regulator, before they can proceed with the merger.

[hkskyline]

Chinese air passenger numbers up 20.4 pct

BEIJING, Aug 4 (Reuters) - Chinese airlines' passenger numbers increased by 20.4 percent in the first half of the year compared with a year ago, state television said on Tuesday.

At the start of the year the national aviation regulator targeted an 11 percent growth in passenger volumes in 2009.

Given the strong first half, the full-year pace is now expected to be more than 20 percent, an official from the Civil Aviation Administration of China (CAAC) was quoted as saying.

The official also said that the increase in passengers in the first half was the fastest in the world.

As in other countries, airline passenger numbers fell last year in China because of the slowing economy. An accelerating economic recovery this year has boosted Chinese carriers, with the nation's top airlines, including Air China , posting profits in the first half.

[hkskyline]

China Eastern to push Shanghai Air merger in H2

SHANGHAI, Aug 10 (Reuters) - China Eastern Airlines said on Monday it would actively push ahead with its acquisition of smaller rival Shanghai Airlines in the second half of the year but warned of an uncertain industry outlook.

China Eastern, one of the country's top three carriers, also said it earned a net profit in the first half of the year of 984.65 million yuan ($144 million) under international accounting standards, turning around from 212.50 million yuan net loss a year earlier, helped largely by fuel-hedging gains.

The carrier did not provide earnings guidance for the rest of the year but warned about uncertainties continuing to face the industry, including weak international air traffic and the lingering impact of the H1N1 flu virus.

Board Secretary Luo Zhuping said in April, however, that the carrier had a chance to return to the black for the full year with a pick-up in domestic air travel.

China Eastern unveiled a detailed plan last month to acquire Shanghai Air via a 9 billion yuan share swap that will give them roughly half of the air travel market in China's financial hub.

Monday's statement gave no timeframe for completing the deal.

Rivals Air China and China Southern Airlines already control about 50 percent of the market in their home bases in Beijing and Guangzhou.

During the six-month period, China Eastern carried 20.79 million passengers, up 14.78 percent from a year earlier with help from a recovering domestic economy, but its cargo volume fell 8.13 percent as the global economic downturn continued to weigh on foreign trade, it said.

Its fuel-hedging contracts in the first six months yielded a mark-to-market gain of 2.79 billion yuan, compared with a 451 million yuan gain in the year-ago period.

Under domestic accounting standards, China Eastern's first-half net profit was 1.17 billion yuan, up from 41.62 million yuan.

China's airlines faced strong headwinds last year as a slowing economy hit demand for air travel, pushing the three biggest carriers into a combined loss of more than $4 billion.

But domestic air traffic has resumed its normal growth pattern this year, as Beijing's aggressive economic stimulus package lifted consumer confidence.

The country's air passenger volume rose 24.6 percent to 17.72 million in June, the fastest growth rate in at least three years, according to official data.

Big Chinese state carriers also received cash aid from the government to ease their operating woes. China Eastern's state parent has received 9 billion yuan in government aid since December, of which 7 billion yuan was injected into the listed unit through a share placement.

[hkskyline]

China airport head executed for graft: report
7 August 2009
Agence France Presse

The former head of the company that owns Beijing Capital International Airport was executed Friday, convicted of bribery and embezzlement totalling nearly 16 million dollars, state media reported.

Li Peiying, former chairman and general manager of Capital Airports Holding Company (CAH), which also operates numerous other airports throughout China, was put to death in the eastern city of Jinan, Xinhua news agency said.

He was put to death after the Supreme People's Court upheld his sentence, according to the agency.

Li, 60, was convicted in February of accepting bribes totalling 26.61 million yuan (3.9 million dollars) and embezzling 82.5 million yuan while in his post from 1995 to 2003.

CAH, which is under the Civil Aviation Administration of China, is a major state-owned enterprise.

The group has more than 30 airports, including the flagship Beijing Capital International Airport, manages assets of more than 100 billion yuan and has more than 38,000 staff.

Massive corruption has emerged as one of the greatest scourges attending China's economic resurgence in the past three decades and the Communist Party often hands down harsh sentences to show it is serious about the problem.

[hkskyline]

China airline's crisis may scrap Shanghai flights to Japan
Kyodo News

SHANGHAI, Aug. 10 -- Flights connecting Shanghai in China and Japanese regional destinations may be scrapped or cut back as Shanghai-based China Eastern Airlines finds itself in the midst of a business crisis.

Local Japanese governments are making all-out efforts to keep the carrier flying to their cities since speculation is rife that it may review its unprofitable routes.

The state-run Chinese airline began flying to Japanese local airports under the Chinese government's strategy to make Shanghai Asia's hub airport. It provides flight services to 16 local airports in Japan.

In late July, the Fukushima prefectural government held a ceremony at a Shanghai hotel, inviting Chinese tourism officials to celebrate the 10th anniversary of the airline's flights to Japan's northeastern prefecture.

At the ceremony, Fukushima Gov. Yuhei Sato called for more Chinese tourists to visit Fukushima, saying they would be enthralled by the prefecture through exchanges with locals.

The airline currently operates two round-trip flights a week between Shanghai and Fukushima. The flights had an average seat-occupancy rate of about 40 percent in fiscal 2008 that ended March 31. But the airline asked the prefectural government to boost the seat-occupancy rate to more than 60 percent.

The local government also conducted a group sightseeing tour for Chinese to Fukushima this year and offered a subsidy of more than 20,000 yen per participant.

At Shizuoka airport, which opened in June, the average seat-occupancy rate for the airline's flights to Shanghai was around 40 percent at the end of that month.

On the Shanghai-Nagasaki route, the average seat-occupancy rate plunged to the 20 percent level in May due to a sharp fall in the number of Chinese tourists. The Nagasaki prefectural government plans to invite China Eastern executives to call on them to continue flights between the two cities, which will mark their 30th anniversary in September.

[hkskyline]

Shanghai gets green light for Pudong airport bonded zone

SHANGHAI, Aug. 8 (Xinhua) -- The State Council, or Cabinet, has given approval for a bonded area for Pudong International Airport, a local official said Saturday.

Jiang Liang, governor of the Pudong New Area, told reporters that the tax-free zone covers an area of about 4 square kilometers.

Chen Xuyuan, president of Shanghai International Port (Group) Co., said the move will help promote Shanghai to build itself into an international center of shipping.

Pudong now has two harbors, one airport and three bonded areas.

The Pudong International Airport handled 2.63 million tonnes of cargo last year, ranking third in the world.

[hkskyline]

China Eastern, others sued over 2004 plane crash: state media
12 August 2009
Agence France Presse

Relatives of 32 passengers killed in a 2004 plane crash in China have sued China Eastern Airlines and three foreign firms, demanding millions of dollars in compensation, state media reported Wednesday.

They demanded China Eastern, Canadian aircraft maker Bombardier Inc. and one of its subsidiaries, and US conglomerate General Electric pay 123 million yuan (18 million dollars) in compensation, the Beijing News said.

They also asked the companies to publicise details of the cause of the accident, apologise in national media, and build a monument at the scene to honour the dead, it said.

A Beijing court on Tuesday agreed to hear the lawsuit, the first time a Chinese court would hear a collective suit over an air crash, the report said.

The Shanghai-bound Bombardier CRJ-200LR jet operated by China Eastern plunged into an icy lake near Baotou Airport in Inner Mongolia shortly after take-off on November 21, 2004, killing 47 passengers, six crew and two people on the ground.

The Chinese carrier in 2004 agreed to pay 211,000 yuan (31,000 dollars) for every dead passenger. But families of the 32 victims deemed the compensation was too low and refused to accept it, previous Chinese media reports said.

In 2005 they brought the companies to a US court, which ruled the case should be tried in China, the Beijing News said.

They then submitted the suit to two Chinese courts in 2007, but both refused to hear it, it added.

The compensation for an air crash fatality averaged 1.5 million dollars in the United States, the report said, citing Hao Junbo, lawyer for the relatives.

[hkskyline]

Chinese Airlines Sector Saw a CNY510mn Profit in July

BEIJING, August 18, SinoCast -- Chinese airlines saw a profit of CNY 510 million in July 2009, revealed the Ministry of Railways of China and Civil Aviation Administration of China.

The nation's overall railway cargo transport volume increased by 11.01 million tons month on month to 284.56 million tons in July, inching up 0.3% year on year or 850,000 tons. Moreover, it was the nation's first year-on-year growth this year, according to a latest data report released by the Ministry of Railways of China.

Its airline passenger traffic volume hit 21.028 million passenger-times in July, with a 21.9% rise year on year; and cargo and mail traffic volume 359,900 tons, with a 3.2% climb year on year, said the development and plan department under the Civil Aviation Administration, adding that Chinese air carriers will welcome a fast month-on-month growth in the second half of the year, owning to the midseason then.

[staff]

http://news.xinhuanet.com/english/20...t_11943751.htm

Singapore low-cost carrier Jetstar to fly to China's Haikou

www.chinaview.cn 2009-08-26 00:38:34

SINGAPORE, Aug. 25 (Xinhua) -- Singapore low-cost carrier Jetstar will make its first flight to Haikou, the capital of China's Hainan Province, local media reported on Tuesday.

According to TV broadcaster Channel NewsAsia, the carrier will fly four times a week between Singapore and Haikou from December.

Currently, Jetstar Asia only offers double daily flights from Singapore to China's Hong Kong and up to five times a week to China's Macao.

The carrier's chief executive officer Chong Phit Lian said that Haikou had long been in the carrier's sights for both its appeal to the large Hainanese community living in Singapore and the broader group of Asian holiday makers.

This is Jetstar's 19th destination from Singapore, and the carrier said that it's looking at expansion in the Chinese market.

[staff]

http://www.chinahospitalitynews.com/...-on-32-routes/

Scheduled Direct Cross-Strait Flights Start On 32 Routes

September 2, 2009 | Print | Email Email | Category: Industry News

Permission from the mainland Chinese civil aviation authorities has been granted to 16 airlines in mainland China and Taiwan for scheduled direct cross-strait passenger and cargo flights between the Mainland and Taiwan.

According to the "Supplementary Agreement on Cross-Strait Air Transport", the mainland has a total of 27 destinations to manage scheduled flights to Taiwan. Fuzhou and Nanchang still run charter flights to Songshan, Taipei, while the other 25 destinations have all opened regular flights to Taoyuan Airport, Taiwan.

Taiwan has two destinations for scheduled flights, Taoyuan and Kaohsiung. Songshan and Taichung will run charter flights.

There will be 32 regular routes and 14 charter flight routes between the Mainland and Taiwan. Nine passenger airlines and two cargo airlines from the mainland will run 135 regular passenger flights and 14 regular cargo flights weekly from the 27 destinations.

[hkskyline]

China Southern Airlines Chmn: 2H Net Pft To Be Better Than 1H
10 September 2009

DALIAN, China (Dow Jones)--China Southern Airlines Co. (ZHN) Chairman Si Xianmin said Thursday the carrier's earnings in the current half will be stronger than in the six months ended June 30 due to recovering passenger and cargo demand.

China Southern, the country's largest carrier by fleet size, is also applying for fresh capital injection from the government and it hopes Beijing will offer more stimulus measures to lift the ailing industry out of a slump, Si told Dow Jones Newswires in an interview on the sidelines of the World Economic Forum.

Si also said China Southern will postpone the delivery of six Boeing-777 cargo planes by an average of one year.

[hkskyline]

BoCom To Extend CNY15 Bln Credit Line To Air China's Parent
14 September 2009

SHANGHAI (Dow Jones)--Bank of Communications Co. (3328.HK) said Monday it will extend a CNY15 billion ($2.2 billion) line of credit to China National Aviation Holding Co., the parent of Air China Ltd. (0753.HK).

BoCom, China's fifth-largest lender by assets, said the credit facility will cover loans to finance the carrier's working capital and fixed-assets expansion, and assistance managing the carrier's treasury account.

BoCom also said it signed an agreement Monday with China's Ministry of Transport to help finance infrastructure projects, including highways, toll-roads and ports, with a preferential interest rate. The bank didn't elaborate on the rate.

As of the end of June, BoCom had issued CNY200 billion worth of loans to companies in the transport industry.

[hkskyline]

China Aug. air transport continues to improve
14 September 2009

BEIJING, Sept. 14 (Xinhua) – China's civil aviation industry posted improved results in August.

Statistics from the Civil Aviation Administration of China (CAAC) show that total transport turnover increased 7.4 percent on month and 30.6 percent on year in August.

Passenger traffic went up 7.6 percent on month and 41.6 percent on year while cargo traffic recorded an 8.6 percent month-on-month rise and an 18.1 percent year-on-year climb.

The large rises are attributed to boosted demand and an economic warm-up, seasonal factors, and low bases for comparison during the same period last year, CAAC said.

Total transport turnover, passenger traffic, and freight traffic traversing over international routes respectively soared 9.1 percent, 16.4 percent, and 7.1 percent from July.

The proportion of transport turnover on the international routes climbed up from 26.9 percent in January to 30.1 percent in August. Total transport turnover alone on the Hong Kong, Macao, and Taiwan routes posted the second year-on-year positive growth since April, rising 12.3 percent.

Freight traffic on domestic routes accounted for 70.2 percent of the total while international routes scratched at the remaining 29.8 percent.

The utilization rate of seats per kilometer flown came to 79.9 percent, and the daily average utilization rate of aircrafts clocked at 9.8 hours.

By the end of August, 1,349 aircrafts were registered, of which 19 were new.

[z0rg]

Originally Posted by hkskyline

Passenger traffic went up 7.6 percent on month and 41.6 percent on year
new.

!!!

Somebody please post August figures for the main airports.

[staff]

Shanghai to gain third airport at Jiaxing

By Jane Chen | 2009-10-12 | ONLINE EDITION

SHANGHAI may get a third airport at Jiaxing City where a military air base will be expanded for civil flights.


The expansion, starting this year, will be completed in 2011 and enable an annual capacity of 5,500 flights, 500,000 passengers and 2,000 tons of cargo, today's Oriental Morning Post reported.


It will likely serve as Shanghai's third airport because expansion capacity remains small at Hongqiao Airport and Pudong International Airport, said Jiaxing's vice mayor Qiu Dongyao. Shanghai is expected to receive 132 million air travelers a year by 2015, he said.


A fast train could connect Jiaxing, in neighboring Zhejiang Province, to Shanghai within just 38 minutes, Qiu said.

Read more: http://www.shanghaidaily.com/sp/arti...#ixzz0TiAsZcsz

..

[hkth]

Hong Kong Airport Press Release:
Hong Kong and Shanghai Airports Sign Joint Venture Agreement to Strengthen Cooperation

[hkskyline]

China's Hainan Airlines to begin service to Hawaii next year
12 October 2009

HONOLULU (AP) - China's Hainan Airlines has received approval to begin service from Beijing to Hawaii.

The U.S. Department of Transportation approved the flights, which initially will be once-a-week. The trips probably will not begin until early next year.

The airline, which is privately owned, already flies four times a week from China to Seattle.

State tourism officials are lauding the approval. They hope the flights will bring more visitors to Hawaii, where tourism has fallen sharply in the last year or so.

State statistics show that Hawaii welcomed about 10,000 visitors a year from China in the early 1990s. That jumped to almost 30,000 by 1998 and approached 60,000 last year.

[hkskyline]

Private planes still waiting to take off

XI'AN, Oct. 20 (Xinhua) -- A red four-seater aircraft on show in Xi'an, northwest China's Shaanxi Province, draws crowds of people who huddle to pose for a photo with it.

The Cirrus SR22 GTS, owned by a businessman in Shaanxi Province, is the first private plane in northwest China, an area inhabited by 100 million people.

Chen Yilong, a real estate tycoon from Weinan City, bought the U.S.-made aircraft for more than 5 million yuan (732,440 U.S. dollars) early this year.

Chen and his aircraft were a highlight at the 2009 China International General Aviation Convention that gathered in Xi'an from Oct. 17 to 19.

Many wage earners who could never dream of owning their own aircraft basked in Chen's reflected glory.

"Even though I myself cannot afford a private aircraft, it's good to know other northwesterners can," said Xi'an resident Zhang Xiaoqiang. "Maybe in a decade or two, I'll own one, too. Who knows? I couldn't afford a car 10 years ago -- now I've got one."

Northwest China, covering Shaanxi, Gansu and Qinghai provinces and Ningxia Hui and Xinjiang Uygur autonomous regions, lags far behind the central and eastern regions in terms of economic growth.

For the new rich like Chen, however, owning a plane is one thing, but flying it is quite another. "I might not be able to fly for five years. I'm prepared for that," said Chen, 50.

China's low-altitude airspace is controlled by the Air Force and the Civil Aviation Administration of China (CAAC). Private flights need approval, each time, and the procedure takes at least half a day, making a private flight a less than enticing event.

"To avoid such restrictions, you need to buy high-performance aircraft that can easily reach high-altitudes. But they sell for at least 10 million U.S. dollars each, plus running costs of 5 million yuan a year," said Li He, regional sales manager of Avion Pacific Limited.

Last year, Li's company sold four such luxury planes to private buyers on the Chinese mainland, at more than 100 million yuan each, he said.

Inadequate ground facilities were another factor that keeps China's private plane sales and general aviation market sluggish, Li said.

"China has only 160 airports nationwide, all in big cities, compared with 19,100 general aviation airports across the United States. This is too inconvenient for private jet owners," he said.

AIMING HIGH

It is not just the rich who are dreaming of private planes.

In a remote village in Gansu Province, farmer Zhang Yuxiang keeps trying to make his own, out of a Santana car engine, three motorcycle tires and propellers blades he shaped out of wood.

While most of Zhang's flight trials have failed, Xu Bin, a farmer from the eastern Zhejiang Province, flew 20 minutes on a home-made plane three years ago. Xu's plane, made out of old car seats, home-made wings and an engine he bought over the Internet, cost 30,000 yuan.

But some daredevil, self-made pilots have ended up killing themselves, forcing the government to tighten controls over such attempts. In 2007, a student was denied approval to test fly his self-built plane.

Yet in general, China has loosened control of low-altitude airspace use for private airplanes. This year, the authorities made Guangdong Province and the northeast region trial sites for opening the use of airspace below 1,000 meters.

If successful, this will lead to the gradual opening of low-level airspace to private planes across the country.

"It's big step," said Professor Wu Tongshui, of China Civil Aviation University. "A complicated project, too, because you've got to build a complete ground radar network and a huge team of air traffic controllers to ensure flight safety."

Experts estimate China's private planes will increase, from 11 in 2006 to 2,000 in 2020.

The CAAC was encouraging overseas investment in general aviation companies and supporting individual ownership of private jets, said Liu Wanming, deputy director of CAAC's transport department, at the Xi'an convention Monday.

[hkskyline]

Derivatives Oil Chinese Airline Profits
28 October 2009
The Wall Street Journal Online

China's major airlines are recording profits again. For now, that's the limit of the good news.

What isn't so encouraging is that the key driver of company performance remains the ups and downs of derivatives on fuel prices: essentially bets the carriers once made that jet fuel prices would remain sky high.

China Eastern recorded a $185 million profit in the first nine months of the year. The gain on fuel-hedging instruments, thanks to rebounding fuel prices: $433 million.

At rival Air China, the industry leader, more than half of profits so far this year are from gains in its derivative positions.

But what of a pickup in passenger traffic? It's only translated to on-year revenue growth in the latest quarter. So, for example, while Air China's carried 16.9% more passengers so far this year, its revenues are down 7.8% in 2009. That suggests sales have come thanks to steep discounts.

The carriers are facing all this with still-high debt levels, a problem that's most obvious at China Eastern. Despite substantial government aid, its liabilities exceed its assets by $412 million.

Longer term, while it may seem inevitable that China's increasingly wealthy population will want to travel more by air, additional pricing challenges will emerge.

China Southern's chairman Wednesday said he expected the development of a high-speed train network in China to eat into the airlines' customer base, due to its lower prices and better safety record.

One major benefit China's leading carriers will likely retain is the support of the central government, which has channeled substantial funds into the sector in the past twelve months.

It may not be the last time it has to do so.

[hkskyline]

China's Juneyao Air plans IPO, raising up to $290 mln

SHANGHAI, Nov 5 (Reuters) - Privately-run Chinese carrier Juneyao Airlines will start preparing for its initial public offering later this year, raising as much as 2 billion yuan ($293 million), a senior executive at its parent firm said on Thursday.

The carrier had not decided the venue of the IPO but mainland China and Hong Kong listings were both among the options, Wang Junhao, president of Juneyao Group, told Reuters on the sidelines of an event. ($1=6.826 Yuan)