China, the biggest air-travel market in Asia, will stop approving orders for new planes and the establishment of new carriers to avoid overcapacity during an economic slowdown.

       No more new aircraft

Liu Shaocheng, head of policy and research at the Civil Aviation Administration of China said airlines will be able to buy planes that have already been approved. Some orders would also be signed next month, he added, without saying when the ban would take effect.

Slowing capacity growth may help the nation’s airlines cope with the global recession, which is expected to hold down air travel in China for as much as three years.

The government may also lower fuel prices and cut taxes after granting an RMB3 billion, or $439 million, bailout to the parent of China Southern Airlines, the biggest carrier in the country.

The move to aid China Southern Airlines appears to be the first step in a government rescue of state-controlled airlines, including Air China and China Eastern, hit hard by weak air traffic demand and hefty losses on fuel price hedging.
More HERE.
Source: International Herald Tribune

Qinghai needs a new airport

Qinghai Province will establish three new regional airports in Qaidam Basin and Guoluo Tibetan Autonomous Prefecture. The exact location of the airports is still being studied.

The Civil Aviation Administration of China listed the construction of the three airports — Qinghai Huatuguo, Delingha and Dawu — in the general construction plan of 2008-2020.

In June, experts from the CAAC’s Northwest Branch of the China Airport Consruction Corp. and the Northwest Regional Air Traffic Management Bureau visited the three areas to select the exact location of the airports.

The site of the Huatugou Airport project will be known by the end of the year.

The Huatugou and Delingha airports are both located in the Qaidam Basin.  Huatugou is an important oil production base of Qinghai Oilfield.

The construction of an airport will promote the development of Huatugou oil production base.  The three airports will be in operation before 2020.
Source: China Civil Aviation Report

            Fuel fluctuating cost

Asia-Pacific airlines have clipped their fuel hedges to save on steep premium costs as oil slid to three-month lows, but they need to keep a consistent ratio to safeguard against volatile price swings.

Gerard Rigby of Fuel First Consulting in Sydney, said, ‘Hedging gives you the ability to fix costs and/or profit margins, but it typically takes away potential for windfall profits for favorable price movements.

The cost of jet fuel jumped almost 70% over the past year to $144.00 a barrel in Singapore trading, though it came off the record of $181.65 a barrel reached last month.

Fuel hedges  — financial products that give a buyer the right to buy fuel at a guaranteed price  — protect companies from price rises, but also increase their costs when prices fall. Hedging contracts are usually options.

Some argue that airlines’ attempt to overreach by making money in oil trading distracts them from their basic business.

Peter Lengyel, a consultant with JBC Energy in Vienna, said, ‘The more often you change your hedge ratio, the more you are gambling. Airlines are not traders. They are not in the business of buying and selling. They go into the market to protect price levels on fuel purchases and these are strategic decisions.’
More HERE.
Source: Reuters

  ARJ21-700's maiden flight

The ARJ21-700, a homegrown commercial regional jet powered by a turbofan engine has made its maiden flight in Shanghai.

The country’s first independently developed regional jet completed its maiden flight in Shanghai on Friday, marking a major stage in China’s civil aircraft manufacturing industry.

The ARJ21-700, a homegrown commercial aircraft powered by a turbofan engine, rolled off production lines in December last year at the Shanghai Aircraft Manufacturing Factory.

The 90-seat jet has a standard full-passenger flight capability of 2,225 km and a maximum flight capability of 3,700 km.

The jet’s maiden flight was successfully completed an hour later, with all testing procedures carried out.

The ARJ21 does not have passenger seats built in during the testing phase, but will be able to carry passengers within 18 months.

The Shanghai Aircraft Manufacturing Factory has an annual production capability of 20 ARJ21 jets and the goal is to assemble 50 jets each year in Shanghai alone.

ARJ21 is an acronym for “Advanced Regional Jet for the 21st Century”.
Source: China Daily

Aviation Industry Corp of China (AVIC), a recently incorporated state aircraft maker, plans to inject major commercial aircraft assets into Xi’an Aircraft International to boost its competitiveness.

AVIC Executive Vice President Geng Ruguang said the assets will include Chengdu Aircraft and Shenyang Aircraft.

He described them as premium assets but did not give an estimate of their worth, saying they still needed to be assessed. He also did not give a timetable for the transfer.

He said, ‘We want to do it as quickly as possible, but we first need to evaluate these assets we want to fold into Xi’an Aircraft.’
Source: Reuters

     Air China to Australia

Air China has announced plans to further expand its presences in the Australian market with an increase in frequencies to Sydney and Melbourne, and the possible introduction of a new destination in the region.

The news comes just 11 months after the carrier last increased capacity to Australia by over 40%.

Air China currently operates ten services weekly to mainland China consisting of three non stop Sydney - Beijing services and four Sydney—Shanghai—Beijing services offering a daily schedule from Sydney. Melbourne—Shanghai— Beijing is served three times weekly.

All 12 services are code shared with Star Alliance
partner Air New Zealand.

Air China continues to operate all its Australian services with new Airbus A330-200s, which feature a two class cabin containing 34 business and 206 economy class seats.
Source: eTravel Blackboard

Binhai New Area aerial view

Boeing’s aircraft parts joint venture in China launched an expansion project in Tianjin, the official Xinhua News Agency reported, citing the U.S. aircraft maker.

The 21-million-U.S.-dollar project was launched after the global giant acquired a majority stake in the Tianjin-based BHA Aero Composites Parts Co. Ltd. (BHA) in July.

Boeing also gained rights to land adjacent to the venture facilities in the Binhai New Area.

Construction was expected to be completed by early 2010 and the new facility would be fully operational by 2013, the U.S. company said.

The expansion would increase capacity by about 60% by 2013 and employment will rise to about 1,000 from the current 600.

The $21-million expansion of BHA Aero Composites Parts Co. was launched after Boeing increased its shareholding in the company in July to a controlling stake. AVIC also owns a stake in the venture.

The new factory will be completed early 2010 and be operational by 2013.
Sources: CNN Money and China View

Shanghai Pudong airport

According to a senior executive the parent of Shanghai International Airport may fall short of its 2008 passenger volume target as the faltering global economy dents air traffic demand.

Shanghai Airport Authority Chairman Wu Nianzu said, ‘Many other sectors are feeling the pinch of the crisis and airports are no exception. We might miss our annual target of 56 million passengers this year.’

The company operates Shanghai’s Pudong International Airport and the smaller Hongqiao International Airport.

Without a major market rebound, which seems unlikely, China’s airline sector will end up in the red in 2008, airline executives and analysts told Reuters earlier this month.
Source: Reuters

Shenyang Taoxian airport

The parent company of China Southern Airlines, the country’s largest carrier by fleet size, said it will invest more than RMB10 billion ($1.46 billion) in Liaoning Airport Group to help fund its expansion

With the investment, China Southern would be entitled to a 40% stake in the airport group, with the remaining 60% would be owned by Liaoning’s provincial government.

The carrier said it would build a new terminal at Shenyang Taoxian airport, the largest airline hub in northeast China within Liaoning Airport Group.

It also plans to base 100 planes at the airport by 2010, and open
five to eight new international routes in the next five years.
More HERE.
Source: China Daily

Air China Cargo flight being loaded

Aircraft manufacturer Boeing and Air China Cargo have announced the carrier’s cargo fleet is to be expanded with three 747-400 Boeing Converted Freighters.

The modification work on the three Combi aircraft includes the addition of a side cargo door, a strengthened main-deck floor, full main-deck lining installation, provisions for a new cargo handling system and complete revisions to the aircraft systems with positions for 30 pallets on the main deck and will take place at Taikoo Aircraft Engineering (TAECO) in Xiamen, China.

Air China Cargo has eight freighters in operation at present,
including three 747-400 Freighters, three 747-200 Freighters
and two other 747-400 Freighters on lease.
Source: TradingMarkets