It was bound to happen but there will be some minor problems until it is totally sorted out. According to The Beijing News air-ticket agents around the world, including China, will stop selling paper tickets from June 1.

In fact, many air travelers have not seen a paper ticket for years.

International Air Transport Association (IATA) has set June 1, 2008, as the deadline to stop issuing paper tickets. For that date on only e-tickets will be used.

Zhang Wei, ticket sector account supervisor from Ctrip.com, China’s top online travel agent, said e-ticketing has gained popularity in China since October 16, 2006, and most passengers have taken e-tickets in place of paper tickets.

A survey done by Ctrip.com shows 97.37% of 13,044 interviewed said they will choose e-ticketing as their first choice.

Zhang Wei said, correctly, ‘Ending the use of paper tickets can help reduce airlines’ costs.’

Domestic airlines said one e-ticket can save more than RMB20 ($2.88) compared with a paper ticket in terms of printing, sales and transportation costs. And there is the question of agencies having to provide safe storage from tickets and the relevant printing equipment.

IATA says global e-ticketing is now around the 93% mark, saving $6.5 billion annually.
Currently in China, 99% of domestic flights use e-ticketing, but only 40% of international flights.

Air China said it is ready to fully use e-ticketing. Currently 97% of its domestic and 55.5% of its international flights issue e-tickets to passengers.

Twenty-six overseas airlines declared they have charged or will charge additional fees on paper tickets in a bid to promote e-ticketing.
Source: China Daily

Air China Ltd said it carried 2.85 million passengers in March, down 0.9% year-on-year.

The airline said the overall passenger load factor was 77.7% in March, down 0.1 percentage point year-on-year.

For the first three months, it carried 8.31 million passengers, up 5.7% year-on-year, while the overall passenger load factor for the period was 77.1%, up 2.4 percentage points.

Air China carried 82,000 tons of cargo in March, down 1.4% from a year earlier, and a total of 220,000 tons for the first three months, a rise of 1.3%.

Cargo load factor for March was 60.5%, up 5.6 percentage points, while the load factor for the first three months was 56.3%, up 5.3 percentage points.

In truth, these are not inspiring figures.
Source: Trading Markets

Cathay Pacific Airways, Hong Kong’s largest airline, posted a better-than-expected 83% gain in second-half profit after flying more passengers to China and raising fares to cover fuel costs.

Sales rose 21% which suggests that much of the extra profit came from the fuel surcharge.

The carrier boosted sales in Hong Kong and China 32% last year after buying Hong Kong Dragon Airlines to add more flights in China

Pauline Dan, who helps manage $2.5 billion, including Cathay Pacific shares, at Manulife Asset Management, said, ‘The growth was strong last year because of surging travel demand and higher ticket prices. This year ‘will not be spectacular if oil prices continue to stay at high levels.’

For the full year, the airline paid an average of $91 a barrel for fuel, 6.5% more than a year earlier. The average price of jet fuel traded in Singapore rose 7.7% last year.

Cathay Pacific charged customer 20% more than a year earlier while, at the same time, saving from fuel hedging. Hedging allows airlines to lock in future fuel prices to protect against possible increases.

Cathay Pacific and Dragonair boosted passenger numbers 4.3% last year to 23.3 million. The airlines fly to about 20 mainland cities, including Beijing, Shanghai and Tianjin.
Source: Bloomberg

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

’If it appreciates, own it. If it depreciates, lease it.’ Almost all of the Chinese airlines lease their aircraft because it’s an economical way for the airlines to both keep their fleets up to date (our illustration is of the inside of the new Airbus 380) and expand them quickly for less money.

According to an estimate by Shanghai-based China Business News, between 60% and 80% of the country’s commercial airplanes are leased. At present China has more than 900 aircraft. In 2005 alone, leasing contracts for aircraft, worth more than $16 billion, were made in the country.

Niall Morrissey, regional managing director of Macquarie Capital’s leasing business and head of Macquarie Leasing China, said, ‘The airlines are the most advanced of the Chinese organizations in terms of leasing. They have been leasing for years because airplanes are expensive items and very re-leasable, and change maybe every eight to 10 years although they still have good value.’

Aircraft leasing will grow along with the fleet expansion in China as carriers expand capacity to handle surging passenger traffic.

China will need about 3,400 new airplanes worth about $340 billion over the next 20 years, and the country’s fleet will quadruple to 4,460 by 2026. The financial leasing market will be about RMB750 billion ($100 billion).

Niall Morrissey said the aircraft leasing market in China was dominated by foreign companies because they take an equity position in the aircraft they lease.

The reason may be tax. Qu Yankai, an official at China’s Association of Enterprises with Foreign Investment, said compared with other countries, domestic leasing firms have to pay as much as 22.8% imported value added tax if they import planes. And need to get approvals from the National Development and Reform Commission and Civil Aviation Administration of China or China Aerospace Corporation before buying an airplane.
Source: Asia Times Online