It is a big ask. China Eastern Airlines, the most indebted of China’s big three airlines, aims to raise at least RMB15 billion ($2.1 billion) for new planes and training to help it compete with Air China and Cathay Pacific.

China Eastern Chairman Li Fenghua said in an interview, ‘If we can get more, it’ll be even better.’

Li plans to reach his target by reviving the sale of a stake to Singapore Airlines, by tapping capital markets and through subsidies from the government, which owns part of the carrier. It all seems a trifle difficult to envisage.

China Eastern’s minority shareholders vetoed a tie-up with Singapore Air in January after the parent of Air China pledged to make a higher offer.

But Jack Xu, an analyst at Sinopac Securities, said, ‘The government won’t sit and watch its own company go bankrupt. China Eastern will have an opportunity to resubmit the Singapore deal this year.’

He rates the carrier ‘outperform’ which seems a tad optimistic given the recorded losses
Shanghai-based China Eastern still aims to raise $1.5 billion selling shares to Singapore Air, Temasek Holdings, the city-state’s sovereign wealth fund, and to its own state-controlled parent, China Eastern Air Holding.

China Eastern Chairman Li Fenghua, seen in this illustration said, ‘There’s no change in our plan to tie up with Singapore Airlines.’

Chew Choon Seng, chief executive officer of Singapore Airlines, said the two carriers are currently discussing commercial cooperation such as cross-selling tickets rather than an equity link. He wisely declined to say whether a tie-up is still being actively pursued.

China Eastern will spend 80% of the RMB15 billion on aircraft, with most of the rest going toward staff training.

The airline plans to add 17 Airbus SAS and two Boeing aircraft this year. It added 20 aircraft in 2007, expanding its fleet to 223. China Southern added 23 aircraft last year and Air China got 29.

The carrier filled 73.6% of its available seats in 2007. Passenger numbers rose 11% to 39.2 million, while cargo volume climbed 6.7% to 939,700 metric tons. This year, freight may jump 14% to 1.07 million tons.
Source: Bloomberg

According to a forecast for the global aviation market recently released by Airbus, China’s air passenger traffic will grow five times and  air cargo six times from 2008 to 2026.

The Chinese mainland will need to add more than 2,800 passenger aircraft and cargo aircraft with a total value of more than $329 billion, meaning a three-time increase in the number of passenger aircraft and 11-fold increase in the number of cargo aircraft.

The additional aircraft needed by the Chinese mainland will take up 11.6% of the global passenger and cargo aircraft demand (24,000) for the same period. This will make China the second largest aviation market with the United States retaining first position.

According to this forecast, the additional aircraft in the Chinese mainland will include 1900 single-aisle aircraft, about 700 twin-aisle aircraft and 190 super large aircraft.
Source: English People’s Daily Online

Hainan Airlines, China’s fourth-largest carrier, begins nonstop service from Seattle (in our illustration on the left) to Beijing on June 9. Northwest Airlines will follow with a daily nonstop service between Seattle and Beijing in March 2009. These are moves which will make a lot of Microsoft executives very happy.

The new Northwest Airlines service will use Airbus A330-200s equipped with 32 business-class seats and 211 economy-class seats.

Joel Chusid, North American general manager for Hainan Airlines, whose new Seattle-Beijing service begins next month, said, ‘This just validates the fact that Seattle has become a major gateway to the Pacific. Competition is competition, but we understand it. It just speaks to the vibrancy of the market.’

Last year, about 69,000 passengers flew between Seattle and China, not including passengers connecting through Seattle from other cities. By 2009, that number is expected to nearly double.
Source: The Seattle Times

Air China, the official airline partner of the 2008 Beijing Olympic Games, has set up a 24-hour command center to ensure smooth air traffic during the Games.

Cai Jianjiang, Air China’s president, said the company had invested RMB568 million (about $81 million) to improve its ground control system and train employees.

The company had recruited 300 new stewards and selected 562 volunteers from current staff to work for the Games.

The new center would facilitate the coordination between the airline and the Civil Aviation Administration of China (CAAC), and other key units at the Beijing Capital International Airport.
Source: China View

The first A320 Full Flight Simulator (FFS) in the Southwest China area has passed acceptance inspection of the Civil Aviation Administration of China (CAAC).

The CAAC evaluated the performance of the A320 FFS at the Flight Training Center of the Training Department of Air China Southwest Branch. The full-flight simulator, with a value amounting to more than RMB150 million, was formally put into operation after the approval of the CAAC.

Air China Southwest Branch currently owns and operates one A320 FFS, one A320 Flight Training Device, and one B737-300 FFS.

The branch airline has established an advanced and all-weather flight training base with an investment of RMB270 million.

The addition of the A320 FSS advances the airline’s level of flight training for the west plateau air route into a new stage. The great advantage of a simulator is that it can be worked pretty much around the clock. China has a great need for pilots. One way of helping ease that need is to get a lot more simulators into action so that pilots can train up rapidly. Especially in the new co-operative cockpit drills.
Source: China Civil Aviation