China's Airlines Stung by Terror

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 ◆ China's Airlines Stung by Terror

China's aviation industry is beginning to realize just how large an impact the September 11 terrorist attacks on the United States will have on airlines in China, with four of the country's top international carriers expected to post combined losses of 1.5 billion yuan (US$180.7 million) for 2002, the Civil Aviation Administration of China reported.

"Passenger and cargo revenue losses, posted by Air China, China Southern Airlines, China Eastern Airlines and Xinjiang Airlines were roughly 700 million yuan during the post-attack period last year," said Chen Xiaoning, director of research at CAAC, the industry watchdog. "Losses will possibly climb to 1.5 billion yuan this year."

Air China, China Southern and China Eastern are the country's major carriers authorized to fly international routes, whereas Xinjiang Airlines, based in Urumqi, offers a few international flights to Europe and other parts of Asia.

Ye Yigan, president of Shanghai-based China Eastern, the nation's third-largest carrier, seems even more pessimistic, predicting Air China, China Southern and China Eastern would post a combined loss of 3.35 billion yuan for the period after the September 11 attacks in 2001 and into 2002, due to suspensions of trans-Pacific flights during the four-day period right after the attacks, a reduced number of flights, dropping passenger volume and higher fuel bills.

According to statistics from CAAC, Air China, China Southern and China Eastern lost 33.4 million yuan during a four-day suspension of flights to America between September 12 and 15.

The planned airlines consolidation, aimed at preparing the domestic aviation industry for intensified global competition, calls for flag-carrier Air China to take over China Southwest Airlines and China National Aviation Corp., China Southern to acquire China Northern Airlines and Xinjiang Airlines, and China Eastern, to combine with Yunnan Airlines and China Northwest Airlines.(eastday.com)