China's civil aviation authority urged state-owned airlines to cancel or delay orders for new aircraft next year in an effort to keep carriers out of financial trouble during the current global economic crisis.
The Civil Aviation Administration of China (CAAC) also encouraged airlines to return rented aircraft from overseas firms and ground or sell some planes to cope with weaker demand.
The administration said it would also be very cautious of approving new orders for aircraft next year.
Also on its website, it said no new airlines would be approved for operation before 2012 and airlines have been instructed to retire large numbers of old aircraft.
These moves could deal a heavy blow to aircraft makers like Airbus and Boeing, which see China as an important market for future growth.
The U.S. maker, which has a 60-percent share in the Chinese market, secured orders of 101 aircraft from China last year. The French producer managed to sell 160 planes to China in the same year, and its market share has risen to 39 percent.
An industry insider estimated about 180 new planes were expected to be delivered to Chinese airlines next year
The airlines have not yet said whether they will cancel or delay those orders as was recommended by the CAAC.
China's civil aviation market maintained robust growth over the past three years. Planes in operation rose from 751 at the beginning of 2005 to 1,256 in October this year.
However, the country's carriers were pinched by surging crude prices in the first half of this year and more recently by weakened passenger and cargo transport as a result of unfolding global economic turmoil.
"Since the second half of this year, the global economic crisis has had an increasingly negative effect on the development of the civil aviation industry," the CAAC said in the notice.
The country's three major carriers all reported losses in the third quarter -- 1.94 billion yuan (US$282.6 million) for China Air, 2.3 billion yuan for China Eastern and 810 million yuan for the smaller China Southern.
The three state-owned carriers were reported to be seeking financial assistance to cope with high operating costs and weak demand.
So far, China Southern Airlines was the only airline approved to receive a 3-billion-yuan capital injection from the government.
China will also refund some facility fees to help carriers, the CAAC said.
(Xinhua News Agency December 11, 2008)
