SHANGHAI, May 12 - China inaugurated its first ever jumbo passenger aircraft company in Shanghai on Sunday.

The company, named Commercial Aircraft Corporation of China Ltd (CACC), will be responsible for researching, developing, manufacturing and marketing large passenger aircraft.

The aviation industry throughout Asia is expected to expand dramatically in the next 10 years. Currently, the industry supports 10.5 million jobs in the Asia Pacific region according to The Hindu. That figure is only going to go up, with over 16,000 new aircraft required to meet demand by 2020.

The CACC has a registered capital of RMB19 billion. The State-owned Assets Supervision and Administration Commission – the new venture’s biggest shareholder – invested RMB6 billion Xinhua reported. (more…)

HONG KONG, April 11 - The escalating price of jet fuel has been pinpointed as the main culprit for the collapse of long-haul budget airline Oasis Hong Kong. Another factor that contributed to strained company finances was the decision to buy instead of leasing the aircrafts. According to the International Air Transport Association, in the past year alone, fuel prices have surged more than 60 percent.

In an open letter Oasis founders Raymond and Priscilla Lee explained, “As oil prices sharply increased, the fuel costs took up the majority of our budget.” (more…)

SHANGHAI, April 10 – The second terminal at Shanghai’s Pudong International Airport opened on March 26, more than doubling capacity for the airport to 60 million passengers and year.

Built at a cost of RMB20 billion, the new terminal and third runway, designed to handle the world’s largest aircraft, opens just in time to handle the expected surge of passenger volume from the upcoming Olympic Games and 2010 World Expo.

Current passenger traffic however, remains distinctly low. Arriving at the new terminal, one finds nothing more than vast emptiness. Even with passengers pouring out of two 747s, the anticipated chaos is nowhere to be found, with staff efficiently clearing immigration queues in the shortest amount of time. (more…)

BEIJING, April 9 - Beijing Capital Airport’s new Terminal Three opened to passenger traffic on March 26. Designed by Sir Norman Foster’s architectural practice Foster & Partners, the Dutch airport planners NACO and engineered by Arup, the new terminal is expected to handle the massive increase in passengers expected for the 2008 Olympics and China’s increased role in global economy from its entry to the WTO.

The new terminal will allow Beijing Capital airport to increase capacity from 27 to 60 million passengers annually by 2015. The same team of planners, architects and engineers were responsible for the Chep Lap Kok airport in Hong Kong.

We sent our intrepid staff to find out how the new terminal was stacking up. (more…)

SHANGHAI, Mar. 26 - Hainan Airlines net profits nearly quadrupled in 2007, thanks to a booming domestic industry and a stronger Chinese currency.

The company, China’s forth largest carrier, posted a net income of RMB651.4 million, up from RMB166.8 million in 2006 it said in a statement to the Shanghai Stock Exchange.

The Haikou-based carrier’s operating revenue rose 6.1 percent to 13.6 billion in 2007, and it took in RMB11.3 billion from 14.5 million passengers. The volume of cargo transport however, declined 0.5 percent to 197,900 tons the company said.

Chinese airlines carried 185 million passengers last year, up 15.9 percent, while cargo volume surged 13.3 percent to 3.96 million tons, according to government estimates. (more…)

Jan. 28 - Xinhua is reporting that China announced plans Saturday to build nearly 100 new airports by 2020 to cater for soaring demand.

The proposals will mean eight out of every ten residents will live within 100 kilometers of an airport within 12 years, the General Administration of Civil Aviation said. It put the cost of building the 97 new airports at US$61.6 billion.

Air traffic volume rose 16 percent to 185 million passengers in 2007, according to official figures. The General Administration of Civil Aviation predicts passenger traffic will grow by 11.4 percent a year between now and 2020, and freight traffic by 14 percent.

The number of airports serving more than 30 million passengers a year will rise from the curent three to 13, it said.

Dec. 26 - Tianjin airport has completed its large expansion project, including a new terminal and runway expansion, ahead of the 2008 Summer Olympic Games in Beijing.

The new terminal building is five times larger than its predecessor with a handling capacity of 10 million passengers annually airport sources told Xinhua.

The project, with a total investment of nearly RMB3 billion, started in August 2005 and included a new 116,000-square-meter terminal building, a 270,000-square-meter apron and a 62,000-square-meter parking lot. The runway was also widened to 75 meters from the current 50 meters and lengthened 400 meters to 3,600 meters. (more…)

SHANGHAI, Nov. 27 - Express shipping and logistics giant, DHL has signed a deal to invest US$175 million on a North Asia hub to be located at Shanghai Pudong International Airport. The move aims to increase the company’s Asia Pacific scope and cement its market leadership in China.

This is the second cargo brand to invest in the airport, after UPS announced plans to build its own 96,000 square meter hub by next year, making it the first in the world to be equipped with two international cargo hubs.

Daniel McHugh, chief executive officer of DHL Express Asia Pacific, told Cargonews Asia that the announcement, “underlines DHL’s strong commitment and confidence in the Shanghai government’s vision of establishing the city as a world economic center, as well as the Shanghai Airport Group’s objective of building Pudong International Airport as the international air hub of choice.”

“Our task as a global logistic provider is to network the world. We are confident that the new hub will give us an even greater competitive edge in managing the huge and complex global trade that is being routed to this region,” he added.

The North Asia hub is scheduled to be operational by the second half of 2010 and will be located nearby the airport’s soon-to-be-completed third runway. It will join the ranks of the company’s five other hubs serving the region: Hong Kong, Bangkok, Incheon, Singapore and Sydney. (more…)

China’s airlines are losing their place in the global competition for air travel. While air traffic in China rose 15 percent last year due largely to the rising affordability of air travel and an increasingly wealthy population, China’s top three airlines, Air China, China Southern Airlines and China Eastern Airlines, have seen a combined decrease in profits. With jet fuel prices constantly and universally rising – more than quadrupling between 2001 and 2006 – and a reluctance to raise domestic fares, Chinese airlines have no way to compensate for the increasing expenses of air travel.

There are also other problems, as the one industry where China cannot out-do the rest of the world with a numerous and cheap labor force, the aviation industry has remained quite small. While the government has decreed that China will develop an aviation industry to rival the U.S and EU, Chinese carriers today are forced to import the majority of their planes, rendering it a pricy business.

To compensate, Chinese airlines have adopted the foreign technique of leasing rather than buying their Boeings and Airbuses – it is easier to lease new planes for short periods of time rather than buying them and then constantly refurbishing and upgrading to keep them up-to-date. (more…)

It’s always a pleasure to fly with Hainan Airlines, as I just did last week from Shanghai to Beijing – a clean cabin, an on time departure when other airlines were having delays, and entertainment on board from lottery games, to acceptable food, and a good drinks trolley. But Hainan Airlines has always been a bit different from the normal Chinese carrier.

Founded in 1989, Hainan Airlines became China’s first joint-stock air-transport enterprise in 1993. It remains today privately owned and has grown to become the fourth largest airline on the mainland in terms of fleet size. It is also the most profitable of all of China’s carriers, with reported earnings for the first half of 2007 at RMB189.71 million.

In 1995, the American billionaire George Soros invested US$25 million in the company, buying 100 million shares. In 2005 he invested another US$25 million.

It is an investment that is sure to pay off once the company begins non-stop flights between Beijing and Seattle – the first North American destination for Hainan Airlines. Those flights are set to begin in June 2008, just in time for the Olympics. They also plan to begin a Beijing-Chicago and Beijing-Newark service, both starting in July 2009. (more…)