Civil aviation industry insiders suggested yesterday the latest plane crash would deal another blow to the ongoing regrouping of China's aviation industry, planned to be inaugurated within two years.

The Civil Aviation Administration of China (CAAC) announced early this year that the State Council had authorized the merger of nine major state-owned domestic airlines into three groups, based on Beijing's Air China, Shanghai's China Eastern and Guangzhou's China Southern Airlines.

Air China's jet crash in the Republic of Korea on April 15 cast doubt on the regroup timetable, and the China Northern Airlines plane crash near Dalian on Tuesday night will add more uncertainty to the completion of the reform, according to one analyst.

China Northern is planning to merge with China Southern Airlines, and the two companies have conducted several rounds of related negotiations.

However, following the disaster in which 112 people died, analysts suggested China Northern should focus on safety improvements for a couple of months, and not on merging.

This exemplifies CAAC's call for aviation safety since the Air China crash.

Some insurance companies involved in the accident have started to provide compensation services.

For example, China Life Insurance Company launched contingency measures to offer efficient compensation services.

"All our branches and staff are required to act at once to conduct site inspections and indemnify the victims' families," said Wang Xianzhang, general manager of the company.

An initial investigation states only approximately 30 passengers had bought accident insurance.

Insurance for flight disasters is jointly run by China Life Insurance Company and five other domestic insurance companies.

The company's Dalian branch has decided to donate 100,000 yuan (US$12,000) to help the disaster relief.

People's Insurance Company of China has paid US$2 million in advance compensation to Northern Airlines for the plane crash.

While some would-be flight passengers are said to be psychologically scarred following the two air crashes, many people still show confidence in air travel.

Li Zhaobin, producer of the Association Press Television News, said people need not feel nervous following the two crashes, and traveling by air is still a safe choice compared with other means of transport.

The airlines yesterday disclosed the names of the Hong Kong victims and seven foreigners aboard the crashed plane.

They are: Yonemaru/Chiyori; Kim Seong Woo; Wang/Si Hang; Imoto/Kosuke; Nagai/Joji; Koley/Raj Kumar; Chong/Yew Keong; Laurence/Farget.

(China Daily May 9, 2002)