Air China Ltd will boost its capital expenditure and expand its fleet this year to cope with challenges in the competitive aviation market.

The country's biggest carrier by market value will raise its capital spending by six percent to 17.97 billion yuan (US$2.54 billion) this year, said Chief Financial Officer Fan Cheng yesterday.

The Beijing-based airline will put 24 new aircraft on its routes this year, and at least 20 in 2009 and 20 in 2010, Fan said. Air China has a fleet of 220 passenger and cargo aircraft by the end of 2007.

The carrier said in a statement its net profit rose 30 percent last year to 3.88 billion yuan, helped by increasing business travel and a stronger yuan. Its sales rose 15 percent to 49.7 billion yuan.

Fan said membership in the Star Alliance, the world's biggest airline grouping, will bring in revenue of 900 million yuan this year for Air China which joined in 2007.

Fitch Ratings, a global rating agency, has urged major domestic carriers to raise their operational efficiency to gain from the benign outlook in the aviation industry and to improve their credit ratings.

(Shanghai Daily March 19, 2008)