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CAAC approves two private airlines
By Da Shan (China Daily)
Updated: 2004-06-09 07:38

China has approved preparations for establishing two more private airlines, a spokesperson with the General Administration of Civil Aviation of China (CAAC) said yesterday.

The preparations for Chunqiu Airlines and Ao'kai Airlines were approved on May 26, the spokesperson said.

On February 10, the CAAC approved preparations for establishing the country's first private airline, E & Net Airlines.

Chunqiu Airlines, to be set up by Shanghai Chunqiu International Travel Services Co Ltd and Shanghai Chunqiu Chartered Flight Travel Services Co Ltd, will mainly engage in chartered flights and regional airline businesses from the Shanghai Hongqiao International Airport, the spokesperson said.

Ao'kai Airlines, to be established by Xinjiang Zhongjing Qili Investment Co Ltd, Ao'kai Investment Development Co Ltd and Beijing Qili Logistics Co Ltd, will mainly engage in domestic cargo transportation, chartered flights from Tianjin and logistics businesses.

Preparations for the two companies will be completed in two years. The two companies will be required to complete 15 procedures including aircraft leasing or purchasing applications, and aircraft registrations.

Officials from the two companies were not available for comment, but analysts say the approval by the CAAC to allow private companies to invest in the aviation market suggests that China is speeding up its opening-up process.

Earlier, CAAC Director Yang Yuanyuan said the government was considering opening further the country's potentially huge aviation sector to private investment.

The CAAC would vigorously broaden the reform and opening of the country's civil aviation industry to meet growing demand and impending competition from foreign airlines in China, as the opening-up of the market widens in accordance with the nation's commitments to the World Trade Organization.

In the next 12 months,examination and approval procedures for domestic airline management will be streamlined so a fair and liberal administration system can be established in line with market demand, Yang said.

Market access will also be broadened and investors will be allowed to enter the sector by establishing new enterprises or using their shares in existing companies.

Both international and domestic capital will be encouraged to enter China's civil aviation industry, Yang said.

"A policy is being mapped out on domestic capital, particularly that of private enterprises, for the civil aviation industry so that rights and interests can be guaranteed."

Yang said that, while promoting the rapid development of the industry, the aviation authority has also emphasized its safe growth.

Airline companies should take full responsibility for security, and the government reserves the right to supervise their operations, he said.

Civil aviation management departments at all levels must strengthen air defence to protect against possible terrorist activities.

In the past year, the country's civil aviation industry achieved a revenue of 108.6 billion yuan (US$13 billion), up marginally over the previous year - although there were heavy losses during April and June because of SARS.

Looking to this year, Yang said passenger transport capacity is expected to total 103 million while cargo transport is forecast to reach 2.5 million tons, up 20 and 18 per cent respectively against last year's figures.

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