China Industry: Dec. 16

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Dec. 16 – This is a regular series of relevant industry news from around China.

Air Transport

China Eastern Airlines said it would conclude its merger with Shanghai Airlines Co. by the end of the year. China Eastern, the third-largest airline in the country said in July it would purchase smaller competitor Shanghai Airlines through a RMB9 billion equity exchange, getting hold of half of Shanghai’s market.

According to China Eastern’s general manager Ma Xulun, the company will swing to profit in 2010, after posting a net loss of RMB9.15 billion for 2008. For the first nine months of 2009, it generated a profit of RMB1.2 billion.

China Southern Airlines’s Xinjiang branch will start flying from Urumqi, Xinjiang to Samarkand, Uzbekistan, from December 8. This is the Xinjiang branch’s second roundtrip to Uzbekistan, the first being Urumqi-Tashkent.

China Southern Airlines will increase the jet fuel surcharges on flights to Hong Kong, Macau and Taiwan from December 1.

The fuel surcharge on routes between the mainland and Hong Kong and Macau, when the tickets are sold in the latter two, will be increased to HKD 75 from HKD71, and will remain RMB69 for tickets sold outside Hong Kong and Macau.

For routes between the mainland and Taiwan, fuel surcharges will be raised to RMB140 from RMB100 for tickets sold in Taiwan and to RMB125 for tickets sold outside Taiwan.

Taiwanese TransAsia Airways will initiate direct flights between Taipei and Danang, Vietnam, from December 26. TransAsia Airways, which is the second foreign air carrier to offer direct flights to Danang after Singaporean Silk Air, will fly on the route two times a week.

The Hong Kong Airport Authority booked HKD4.3 billion revenue for the six months ended September 30, a decrease of 4.7 percent compared to the same period last year. According to the authority, its profit attributable to equity shareholders was HKD1.307 billion, a decrease of 3.8 percent  year-on-year. Its passenger throughput decreased 6.4 percent to 23 million and cargo volume fell 11.5 percent to 1.68 million tons.

Fiji-based Air Pacific Limited has initiated direct flights from Nadi, Fiji, to Hong Kong. The air carrier has said that, under a code-share partnership with Cathay Pacific its network covers southeastern Asia, United Kingdom and Europe.

CEO John Campbell commended Hong Kong International Airport’s location and added that it was perfect for the company as it targets overseas markets using Hong Kong as a transit hub.

Renewables

The Taiwanese government has set the 1 GW target of installed solar power capacity to be reached by 2025. At present, Taiwan has around 2.3 GW of installed capacity from clean energy sources, of which just 5 MW of solar power. The government has planned incentives and regulations to support the segment development.

Taiwan’s renewable energy act, approved earlier in June, aims to add between 6.5 GW and 10 GW of renewable energy capacity over the next 20 years. The new legislature is expected to help attract TWD30 billion worth of investments.

Taiwan Semiconductor Manufacturing or TSMC, announced yesterday that it will acquire a 20 percent stake in local solar cell maker Motech Industries. The company will purchase 75.32 million of Motech’s shares at TWD82.7 apiece at a 16.9 percent discount to its three-month trading average.

Another Taiwanese solar cell manufacturer, Gintech Energy has recently announced intentions to increase its annual production capacity to 1 GW, in line with the predicted growth in market demand.

Germany gave way to the United States and China as the world’s most attractive countries for investment in renewable energy, according to the latest report assessing the renewables investment climate by consultancy Ernst & Young.

Ernst & Young says that China sits behind the United States in terms of overall renewable investment opportunity, but it beats the North American country in both onshore and offshore wind projects and in terms of infrastructure. The United States, on the other hand, is regarded as a genuine leader in solar thermal investment opportunity.

Ernst & Young expects the attractiveness of the Chinese renewables industry to continue to grow. China’s recent announcement to increase its renewable energy contribution to 10 percent by 2020, along with its decision to relax import controls on components needed for renewable energy, as evidence that it was becoming an even better place for renewable energy investors to do business.

This industry report brief is courtesy of Aii Data Processing.