| China considering US$2 billion aid to airlines |
BEIJING, Jan. 16 (AP) -- China's government is considering a plan to inject 16 billion yuan (US$2 billion) into its three major airlines to cut their debt and ease the burden of high fuel costs, a news report said Tuesday.
The plan, if approved, would be the most significant government intervention in China's airline industry since 2002, when it merged nine carriers into three major groups.
It calls for injecting money into the parent companies of Air China Ltd., China Eastern Airlines Corp. and China Southern Airlines Corp., The Asian Wall Street Journal reported. It cited an unidentified person familiar with the plan.
Chinese airlines are highly regulated, which has reduced their ability to cope with soaring fuel costs and mandates such as the 2002 restructuring that saw bigger carriers merged with smaller, money-losing competitors.
The government tried to ease the burden of rising fuel prices by raising fuel surcharges on domestic flights in September and surcharges on international flights in October.
Combined profits for China's airlines rose 50 percent in the January-November 2006 period to more than 9 billion yuan (US$1.1 billion) because of the fuel surcharge on airline tickets, according to the China's General Administration of Civil Aviation.
By contrast, carriers lost 640 million yuan (US$82 million; ?64 million) in the first six months of the year, largely due to high fuel costs, according to the agency.
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