The mainland's largest freight carrier Air China Ltd said
yesterday it would not rule out the possibility of merging with
rivals including China Southern Airlines to raise its
competitiveness.
Air China President Cai Jianjiang made the remarks in response
to speculation that the country's three largest airlines might be
restructured.
Cai said the mainland's aviation industry is looking into the
issue, "but we have yet to make a submission to the central
government to express our view".
A string of small State-owned and central government-controlled
airlines are being restructured in an effort to fend off
competition from outsiders. Against that backdrop, rumors are
flying that the three largest airlines will be restructured.
Air China on Tuesday posted a 1.5 billion yuan net profit in the
first half of the year, a year-on-year increase of 240 percent,
while its operating revenue rose 17.17 percent to 23.3 billion
yuan.
Li Jiaxing, Air China's chairman, attributed the growth to
accelerating demand for air travel that effectively mitigated the
negative effect of increased fuel costs.
Fan Cheng, the company's executive director and chief financial
officer, said the hedging ratio of fuel was at 40 percent during
the period. He stressed that the company would continue to adopt
fuel-saving strategies to minimize the impact of oil price
fluctuation.
Fan said oil prices would hoves around $75 per barrel in the
second half. He said Air China would change its freight routes and
hedge oil prices to combat the higher cost.
Air China has launched about 700 Olympics products and has
posted 158 million yuan in sales revenue. Its income is expected to
reach 580 million yuan during the Olympic Games next year.
Cai said the operation and debt ratio of China Eastern Airlines
will be substantially enhanced by Singapore Airlines buying a stake
in the carrier.
But he said the purchase would not affect Air China's strategies
in the eastern region.
Air China holds 53 percent and 43.8 percent of the cargo and
passenger markets in Beijing, which it expects to increase to 55 to
60 percent for cargo and 45 to 50 percent for passengers by
2010.
(China Daily August 30, 2007)
