China to slash aircraft orders

CHINA wants its airlines to cancel or postpone orders for new aircraft until the economy has stabilised, a move sure to have an impact on western aircraft manufacturers.

China’s industry regulator, the Civil Aviation Administration of China (CAAC) said that it wouldn’t approve any new airlines until 2010 at the latest. It also recommended carriers should convert passenger services to freight as much as possible, retire old aircraft and not renew aircraft leases from foreign companies.

In return for accepting these recommendations the CAAC promised the return of and future exemption from a total of 4 billion yuan ($582 billion) in airport development fees for the second half of this year and first half of 2009.

An additional 10 billion yuan ($1.45 billion) would be spent on upgrading airport safety and concessions n fuel, landing fees and other services.

“From the second half of this year, the global economic crisis has had an increasingly negative effect on the development of our civil aviation industry,” the CAAC said.

Chinese carriers, as have those around the world, have been hit by high oil prices earlier in the year and dramatically falling passenger and cargo traffic. State-owned airlines lost 4.2 billion yuan (US$615 million) in the first 10 months of this year.

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