Air China may seek other allies to exploit Shanghai as an international hub if its preferred partner, China Eastern Airlines, won’t sell a stake to Air China’s parent. And China Eastern has said loud and clear that it does not want to

The suggestion is that Air China would consider tying up with China Eastern’s hometown rival, Shanghai Airlines, or Hong Kong-based Cathay Pacific Airways, with which Air China has significant cross-shareholdings.

Kong Dong, the company’s acting chairman, said Air China plans to set up a subsidiary airline in Shanghai, China’s commercial center and part of the airport shown in our illustration, whether or not it finds a partner.

That is the key to the whole situation. China Airlines is strong in Beijing. But it is not strong in Shanghai where China Eastern rules the roost.

Yet Air China is the strongest and most profitable of China’s airlines and dreams of becoming a national supercarrier. To do this it need Shanghai.

If it gets Shanghai, no matter by what means, then China Eastern is dimished and the China airline scene becomes one monster — Air China — and a lot of satrapies, China Eastern, China Southern Airlines and others.

Air China’s parent, China National Aviation (CNAC), won’t reduce its offer price for up to 30% of China Eastern, even after a recent slide in the Shanghai carrier’s share price. Kong Dong states he will stick with the earlier offer

Which leaves Singapore Airlines — and its parent company, Temasek Holdings — out in the cold.

But, if Air China gets its way, it dominates China aviation and this may not be the best event ever for the traveller. What China needs, perhaps more than anything, is serious competition among the interior airlines to raise the standard of service. Especially if there is any serious hope of competing internationally for non-Chinese passengers.
Source: CargoNews Asia

Air China’s former chairman Li Jiaxiang has proposed the creation of a super-carrier via his company’s acquisition of smaller rivals. His view is that China should create a state holding company which would control the assets of its top three airlines. His thought being that this would make them better able to compete with global rivals.

Under this plan, recounted to the the 21st Century Business Herald, the holding company would control the assets of China Southern Airlines , China Eastern Airlines and Air China.

The move would forge a closer partnership among the three carriers and enable them to better compete in the global markets.

He added that his firm, Air China, was seeking RMB30 billion to 40 billion ($4.22-5.63 billion) cash injection from the government to boost its capital base.

Aggressive aircraft orders in recent years have pushed debt ratios at major Chinese airlines above 90%, increasing their operating costs.

All three major carriers last year sought cash injections from the government, according to local media reports, but have not yet received a response.

None of which remotely attends to the real problems of the industry.

Passengers judge airlines by promptness and the quality of the inflight service. Promptness requires integration between several authorities but it can be done.

In flight service is something else again. The writer has been on no Chinese airline where the inflight service has been remotely acceptable by international standards.

There seems to be an idea among the cabin crew that they take care of one safety demonstration, one meal (normally served in a slapdash fashion), a clearing away of the debris and then disappear to an undefined space from when they emerge for landing.

No international traveler would take a long haul flight on a Chinese airline by choice. Amalagamating them will not touch the problem.

What is needed is a most stringent test when hiring the staff and a weeding out of the passenger-unfriendly practices which are deeply embedded.
Source: Reuters and agaonizing personal research.

Philippine Airlines, an airline which has had an interesting career and is still the nation’s flag carrier, is opening two regular flights to China, marking the the first direct air link between the Philippines and the scenic southwestern part of China.

Departures from Manila for Chongqing are every Monday and Friday. The return service departs Chongqing on the same days.
For Chengdu, departures from Manila are every Tuesday and Saturday. Return flighs are on the same day. Both routes will be served with brand-new Airbus A320 aircraft.

Chongqing and Chengdu are PAL’s fourth and fifth destinations, respectively, in mainland China. The airline already operates daily services to Shanghai and Xiamen, and a five-times-weekly service to Beijing.
Source: Business Enquirer

Air China, Southwest branch has a new flight route from Chengdu to Osaka. It will be the company’s second route from Chengdu to Japan.

There will be three flights every week on the new Chengdu-Dalian-Osaka flight route. Flight CA151, using an A319 aircraft, takes off from Chengdu, stops at Dalian and then arrives at Osaka’s Kansai Airport. And reverse.

Previously, the only air route from Chengdu to Japan landed in Tokyo, with a stopover in Beijing, That route was also operated by Southwest Air China.

Jun Li, an analyst covering the transportation industry for Shanghai-based Everbright Securities said, ‘As the industrial center shifts from coastal cities to the central and western regions, there will be more and more routes to Japan, South Korea, Europe and even North America connected to these regions to meet business or tourism requirements.’

Jun Li added the aviation industry in Yunnan and Guizhou province, both located in southwestern China, will to some extent benefit from developing tourism.
Source: Emerging China

Sichuan Airlines, a mid-sized Chinese carrier, is in talks with Taiwan’s TransAsia Airways to set up a joint venture airline. Which is, perhaps, yet another sign of the move towards a normalization of relationships between the Mainland and Taiwan.

A spokeswoman said, ‘We have been in discussions with TransAsia to form a joint venture.’ She added that details of the proposed partnership had yet to be finalized.’

Sichuan Airlines, partly owned by China Southern Airlines, according to it web site operates more than 130 routes, almost entirely within China, with a fleet of 40 aircraft.

TransAsia Airways is an airline based in Taiwan. It mainly serves the domestic market but also has limited scheduled international services to Macau and South Korea and charter services to some holiday destinations.

TransAsia was formed in 1951 as one of the first private civil airline in Taiwan, flying the Taipei - Hualien - Taitung - Kaohsiung route. It also served as local agent of foreign airlines and provided airport ground handling services for foreign airlines.

Air services ceased in 1958 when the management of the airline decided to concentrate their attention on their agency businesses. It established its airline meal catering services in the same year.

Domestic flights were resumed in 1988, after an absence in the market for 30 years. First scheduled international services started in 1995 to Macau and Surabaya.
Source: Reuters and research.