Starting today, June 3, ten airlines from the mainland and Taiwan will make 19 round-trip flights for the traditional Duanwu, or Dragon Boat Festival which runs from June 3-15.

The Civil Aviation Administration of China said the mainland airports involved are in Beijing, Shanghai, Guangzhou and Xiamen, with one in Taiwan — Taipei.

Shanghai will have the most flights on the mainland, with 14 round-trip charter flights.

Carriers that will operate the flights are Air China, China Eastern, China Southern, Xiamen Airlines and Shanghai Airlines on the mainland, and China Airlines, Mandarin Airlines, EVA Air, UNI Air and TransAsia Airways in Taiwan.

Mainland people celebrate their first ‘official’ Dragon Boat holiday this year.

The State Council revised the official holiday schedule late last year to add three traditional festivals —Qingming, Duanwu and Zhongqiu — in response to public demand.

Interesting that the Dragon Boat Festival is probably the most international of all festivals from China. In fact it would be fair to say that dragon boat racing (sport and festival) is among the fastest growing of team water sports, with tens of thousands of participants in various organizations and clubs in over 60 countries.
Source: China View

An alliance between two state-owned companies — AVIC1 and China Eastern Airlines — will form the Xingfu Airlines joint venture which will operate as China Joy Air. It is expected to promote sales support to AVIC1’s 60-seat MA60 and the larger 70-to-110-seat ARJ21 China-made aircraft. The Xi’an-based venture underlines the government’s efforts in promoting China-made aircraft.

According to a statement by the Civil Aviation Administration of China (CAAC) on February 29th, AVIC 1, China’s largest aircraft manufacturer, will hold 60% share of the joint venture while China Eastern Airlines will own the remaining 40%. AVIC1 will invest RMB 600 million in cash, while the remaining RMB 400 million will come from China Eastern.

Li Lei, a Beijing-based analyst at China Securities said that the right to make major decisions like aircraft purchasing is important for AVIC 1 as a newcomer to the airline industry. Li Lei said, ‘The regional carrier can also help complete China Eastern’s existing network.’

The CAAC further said in its statement that China’s aircraft fleet is projected to quadruple to 4,000 aircraft by the year 2020. By then, the aircraft developed by AVIC 1 will be able to compete with planes made by Brazil’s Empresa Brasileira de Aeronautica SA and Canada’s Bombardier.
Source: CCAR

China Eastern Airlines, Shanghai’s biggest carrier, put a spurt on in the stock market amid speculation — the stock market being the biggest purveyor and believer in gossip of any institution — it may combine with smaller rival Shanghai Airlines (some of the crew seen in this illustration).

China’s third-largest carrier jumped 6.26% to close at RMB10.69, after climbing by as much as the 10% daily limit. Shanghai Airlines gained 0.5% to close at RMB8.02.

It is unusual for rumors to have a sound basis for thinking it. But this one has its reasons.

A tie-up with Shanghai Airlines would raise China Eastern’s market share in China’s commercial capital to 55%, helping it compete with larger rivals Air China and China Southern. The carrier is also seeking funds to cut debt and improve its operations.

Shanghai Airlines is controlled by the city’s government, while China Eastern is majority-owned by the state government.

Chairman Li Fenghua earlier this month said China Eastern wants to raise RMB15 billion ($2.1 billion) for new planes and training. He said the company plans to reach the target by reviving the sale of a stake to Singapore Airlines, by tapping capital markets and through government subsidies.

The airline’s minority shareholders vetoed the sale of a stake to the Singaporean carrier and its parent Temasek in January in anticipation of a higher offer from Air China.

What will happen now? Your guess is as good as anyone’s. Probably better.

What can be safely said is that China Eastern needs to get its debt sorted out and it desperately needs to improve its customer service at every level. Whether it buys Shanghai Airlines or not is a comparatively trivial business decision compared to those two major tasks.
Source: Bloomberg

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

China Eastern Airlines, the nation’s third-largest carrier, said it may lose RMB405 million ($58 million) of sales this year after being ordered to scrap flights that were disrupted by a labor dispute.

The Shanghai-based airline said in a statement to the city’s stock exchange that two routes in the southern Chinese province of Yunnan will be halted May 4. The number of its flights on six Yunnan routes were cut by between two and six daily.

The government took away routes from the carrier after its pilots aborted flights to protest working conditions. This will do nothing to add to their popularity with the management.

The pilots were able to take such cavalier action because the country is facing a shortage of pilots which will only increase.

Yu Jianjun, an analyst at Huatai Securities Co. in Nanjing said, ‘Aggressive fleet expansion is the reason for all these problems. The nation’s civil aviation industry is running at high risk and debts because everyone is regarding market share as first priority.”

China Eastern’s routes in the southern province will be given to four rivals including Air China.

Board Secretary Luo Zhuping said in a Shanghai interview the airline will seek government permission to resume as soon as possible the routes that were taken away after pilots aborted flights to protest working conditions.

The country’s passenger numbers may increase 14% this year, helped by leisure travel and demand for flights to attend the Beijing Olympic Games.

According to the General Administration of Civil Aviation China’s airlines may fly 210 million passengers in 2008.
Source: Bloomberg