CHINA: Chinese carriers must collaborate to cut costs

China’s Civil Aviation Administration (CAAC) has said Chinese airlines must collaborate to cut costs arising from higher fuel prices. While jet fuel prices continue to rise apace to that of rising oil prices, Chinese airlines are beginning to face lower demand for air travel. The situation has revived calls made in the past by the […]


China’s Civil Aviation Administration (CAAC) has said Chinese airlines must collaborate to cut costs arising from higher fuel prices. While jet fuel prices continue to rise apace to that of rising oil prices, Chinese airlines are beginning to face lower demand for air travel. The situation has revived calls made in the past by the head of the CAAC, Li Jiaxiang, for the creation of a “super carrier” that can compete against the major foreign airlines.

The idea is entirely within the realm of the possible, say analysts, based on the fact that China’s three largest carriers – China Southern, Air China and China Eastern – are all indirectly controlled by the government. But not all three of the carriers are keen on the idea as evidenced by China Eastern’s rebuff of Air China’s parent company which sought to buy a stake in China Eastern early this year. China Eastern had earlier unsuccessfully attempted to get shareholder approval for Singapore Airlines to take a stake in it so that it could tap the Singapore carrier’s expertise.