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Chinese airlines are flying high
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08:44, April 09, 2009

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Chinese airlines made an estimated 800-million-yuan ($116 million) profit in the first quarter thanks to a rebound in domestic travel and the government's supporting measures, the civil aviation head Li Jiaxiang said yesterday.

The domestic market saw a double-digit growth in passenger volume during the period, up 17.9 percent on the same period last year, Li, chief of the Civil Aviation Administration of China (CAAC), told the 2009 China-US Aviation Symposium, which ends today.

The symposium promotes a high-level dialogue between the two countries to address challenges to the growth of the aviation sector.

Li said the growth rate was faster in China than that in other countries.

Globally, passenger volumes fell by 10.1 percent in February, compared to that last year, following a decline of 5.6 percent in January, according to the International Air Transport Association (IATA) statistics.

Carriers in North America and the Asia Pacific region saw passenger traffic decline by more than 12 percent in February, while those in Europe saw a drop of 10.1 percent, IATA said.

Li attributed China's growth to the central government's effective measures to spur domestic demand as well as the low price of oil. The CAAC's measures to cut taxes and return funds to airlines, and the government's injection in some large airlines, have helped them make profits, he said.

Li Lei, aviation analyst with CITIC China Securities, said that the growth rate was a sign of the domestic market bouncing back, pointing out that it was the traffic of cargo rather than passengers that reflected industry performances.

Official statistics showed domestic airlines' cargo transport and international transport were still mired in the ongoing global recession.

Li Jiaxiang said that the volume of cargo handled by the domestic airlines in the first quarter was down by 17 percent on the same period last year.

Meanwhile, both passenger and cargo transport on international routes fell by 21.5 percent year on year, he said.

But Li said the passenger volume in April and May is likely to go up, and with the oil price remaining at the current level, the industry can earn a profit for 2009.

The CAAC announced its plan to invest 80 to 100 billion yuan in the civil aviation's fixed assets this year, up 33 percent on last year, to boost domestic demand. Part of the money will go into building and expanding 22 airports.

Dorothy B. Reimold, acting assistant administrator for international aviation for the US Federal Aviation Administration, said China was one of the biggest buyers of the US-made aviation products.

Between 1971 and 2007, China ordered 889 aircraft worth 700 billion yuan from the US. If engines, air traffic control and other facilities are included, China's purchase from the US has exceeded 1 trillion yuan, she said.

Source: China Daily

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