China Eastern 2008 Traffic Drops As Economy Slows
January 9, 2009
China Eastern Airlines, one of the country's three biggest carriers, said passenger volume fell 5.4 percent last year, the first drop in at least nine years as the economic slowdown curbed air travel.
China Eastern carried 37.05 million passengers last year, halting four years of double-digit growth fueled by a booming economy.
Cargo volume fell 5.6 percent to 887,000 tonnes during the period, it said.
China's air traffic began to slide in May as a series of natural disasters and a slowing economy dented demand for air travel.
The country's top airlines, which include Air China and China Southern Airlines, posted net losses in their third quarter results.
China's airlines lost CNY7.07 billion yuan (USD$1.04 billion) in the first 11 months of 2008, the official Shanghai Securities News said on Friday, citing data from the Civil Aviation Administration of China (CAAC).
Beijing has unveiled a raft of support measures to help the ailing industry, including combined cash injections of CNY10 billion into China Eastern and China Southern.
The State Council, or cabinet, has also approved a three-year exemption from the operations tax on airlines' fuel surcharges, retroactive to January 1, 2008.
Taxes previously paid would be deducted from the companies' future payments, the Finance Ministry said late on Thursday.
Industry analysts said the support measures, particularly the cash injections, would help to ease the carriers' debt burden and showed the state's commitment to supporting the sector.
"It seems that the government is determined to save its airline industry as it is a key sector and of strategic importance to the whole country," said Li Lei, an analyst with China Securities.
The fuel surcharge tax exemption alone will help Chinese airlines save a combined CNY2.5 billion over the three years to December 31, 2010, state media said, citing CAAC data.
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