China Eastern, the nation’s third-largest carrier, has won official approval to establish a regional airline called Happy Airlines. (The name sounds a bit daft but so did EasyJet and Virgin the first time you heard them.)

The Beijing News reported that China Eastern will invest RMB400 million ($55.8 million) and take 40% in the new company, which will cater to west China’s middle and low-end tourist market.

The rest of the airline will be owned by the state-owned China Aviation Industry Corporation I (AVIC I), manufacturer of China’s first home-made passenger airliner ARJ-21.

The new airline will be based in Xi’an Xianyang International Airport in the country’s northwest and expects to hire transport plane pilots from the air force.

The newspaper said there are a handful of Chinese air companies running regional airlines, whose services are in huge demand but suffer from low profitability.

It further said, without elaboration, that China Eastern expects the new company to get beneficial treatment by the government. Beijing wants to boost the economy in the west to tackle unbalanced regional development. Note the illustration has nothing to do with the airline but this might be the image it wants to convey with its name.
Source: Economic Times

This is like a long running serial on television. You do not really enjoy watching it but there is always something happening to hook you into the next episode.

Now that Singapore Airlines has been repelled, with some small assistance from Cathay Pacific, China National Aviation Holding Company (CNAHC), parent of flagship carrier Air China, has said what it is looking for is a partnership, not a merger, with China Eastern Airlines in its new counter-offer. Makes it sound much more palatable.

CNAHC also said it would, as promised, submit the bidding within two weeks of the rejection to CEA’s proposed 24% stake sale to Singapore Airlines (SIA) and Lentor Investments, a unit of the Singapore state investment company Temasek.

(Bringing that down to basic ideas SIA would have got a strong foothold in China and the area in which is specializes, customer service, would have improved beyond measure. Cathay Pacific has tried to up the quality of inflight service in China but allows that it is tough going.)

Minority shareholders voted against SIA’s bidding after CNAHC’s wholly-owned subsidiary, China National Aviation (CNAC) said it planned to buy 24 to 30% of CEA’s shares at 32% higher than SIA’s offer price. Which is an offer you cannot refuse.

This deal reflects the long-held concept of Li Jiaxiang, former CNAHC’s general manager and Air China’s board chairman, for the joint running of overlapping flights, combined cargo transport subsidiaries and a cross-shareholding arrangement between the two carriers. The official said the two central government-owned airlines could still maintain independent operation and their own brands.

CEA had a dominant 36% share of Shanghai’s aviation market, compared with 12% of the Beijing-based Air China.

What is needed now is for someone like Emirates to get involved and show the inflight crew the way that customers should be catered for. Until that happens passengers will be predominantly Chinese and these will not be truly international airlines. If from scratch, Emirates could build a reputation as one of the great service airlines of the world it should not be impossible for China Eastern or Air China to attain similar standards.
Source: China Daily

There are simply not enough pilots in China. The government, very intelligently, has frozen out about two dozen new airlines simply because there are not the pilots to go around.

Now, Sichuan Airlines has hired 12 pilots from Taiwan. This is the second batch from the island province. Our illustration sees some of them accepting their wings.

The same airline recruited eight pilots on three- to six-year contracts two year ago, becoming the first mainland carrier to employ Taiwan pilots.

Taiwan pilots are flying to and from Nanjing, Xi’an, Shanghai, Guangzhou and Shenzhen.

According to the General Administration of Civil Aviation of China (CAAC) the air transport industry has been growing at an annual rate of 16%,

In 2006, the authorities estimated that the country would need 9,100 more pilots by 2010 to fly the new Boeing and Airbus planes being added to Chinese carriers’ fleets at the rate of 100-150 a year.

The gap between the demand and supply of pilots is likely to be 2,000 by 2010.

China can now produce 1,400 new pilots a year, including the 400-odd that come out of China Civil Aviation Flight College (whose alumni include 90% of the country’s 11,000 pilots.)

The rest were trained by airlines, which prepare students in theories in aviation colleges and universities at home, and send them abroad for flight lessons.

Dearth of pilots is a problem common to all mainland airlines, from the big three — Air China, China Eastern and China Southern — to the private ones. To overcome the problem, they have sought the help of domestic aviation colleges and universities, as well as foreign flight schools.

Professor Li Xiaojin of the Tianjin-based Civil Aviation University of China says at least four carriers — Shenzhen Airlines, Shanghai Airlines, China Southern and China Eastern — have adopted this strategy to get enough pilots for their fleets.

CAAC’s Flight Standard Department official Yang Hu put it very neatly. He said, ‘The problem is that no matter how many pilots are trained every year, each new plane that is delivered needs five pilots and five first officers to ensure a smooth operation.’

Fresh flight school graduates can be employed as first officers for the first six to seven years after, and only after that can they become full-fledged pilots.

But the airlines buying the new Airbuses and Boeings cannot wait that long.

Airbus alone is expected to deliver 372 planes to Chinese airlines from December 2007 to 2012. Boeing is expected to supply another 335 aircraft.

So far, 491 overseas pilots have got their licenses from CAAC to work for Chinese airlines. Some experts say the shortage of pilots won’t last long. The country could have more than enough pilots as early as in five years. This seems grossly over-optimistic. And no suggestion is made as to what should be done during those five years.
Source: China Daily

A pilot shortage is affecting China’s aviation industry, leaving hundreds of new Boeing and Airbus jetliners on order without pilots to fly them.

China will need an average of 2,500 pilots each year for the next two twenty years and it is nowhere near set up to meet the demand.

So foreign pilots are taking command of some Chinese airliners. Aviation Minister Yang Yuanyuan recently declared that the industry is growing ‘too fast.’ He’s cut back daily flights, slowed the launches of start-up airlines and warned that safety must prevail over growth.

China isn’t the only country with a pilot shortage. It is a worldwide problem.

William R. Voss, chief executive of the Flight Safety Foundation said, ‘It’s something that is sneaking up on the industry overall because there have always been pilots in the wings.’

Chinese aviation regulators say the nation will need an additional 9,000 or more pilots by 2010, as national airlines add jetliners at the rate of up to 150 a year.

Gao Hongfeng, the deputy head of the General Administration of Civil Aviation of China said, ‘But speaking truthfully, we only have the capacity to train about 7,000, leaving us short 2,000 pilots. The shortage of pilots has become an important factor constraining civil aviation’s development.’

Pierre Steffen, vice president of customer services for Airbus China said, ‘We’ve had two occasions with two Chinese airlines where sales deals were accompanied by requests for foreign pilots.

China’s Big Three airlines — Air China, China Eastern and China Southern — are working hard to deal with the pilot shortage.

Air China has reserved land to build a training center in Beijing that’s likely to be the biggest in the world, with 30 full flight simulators. That is one in our illustration.

Nearly 20 start-up airlines wait for approval to operate, and a green light may not come soon. One reason: The start-ups don’t have pilots. Pierre Steffen said, ‘Where do they get their pilots? They can only get them from existing local airlines.’
Source: Kansas City.com

The warning by IATA that the sands of time are running out on the pilot shortage problem is especially important for China in that it has the fastest expanding aviation market and, potentially, the biggest future problem from a severe shortage of pilots.

The International Air Transport Association (IATA), the apex body of all leading airlines of the world, has warned airlines of a severe pilot shortage unless a concerted effort is made to change training and qualification practices to produce out more pilots every year.

According to IATA’s new estimates the global airline industry will need 17,000 new pilots annually due to expected industry growth and retirements.

Increasing retirement age of pilots to 65 may help but it can’t be the only solution according IATA.

Giovanni Bisignani, IATA Director General and CEO, said, ‘It’s time to ring the warning bell. We must re-think pilot training and qualification to further improve safety and increase training capacity.’

He told the FAA International Safety Forum that industry is concerned because ‘There are no global standards for training concepts or regulation. Pilot training has not changed in 60 years — we are still ticking boxes with an emphasis on flight hours.’

IATA supports the competency-based approach of multi-crew pilot licensing (MPL) training programs. Unlike traditional pilot training, MPL focuses from the beginning on training for multi-pilot cockpit working conditions. It also makes better use of simulator technology.

Europe was among the first regions to adopt MPL and Australia and China are moving ahead with implementation. In China, IATA is working with the government to develop the syllabus and incorporate MPL into national regulation.

But even with this effort there will be shortages. Which means that in the ever-contentious relationships between flight crew and management the pilots will start to get the upper hand. Which, inevitably, means increases in salaries and thus in air fares.