2010 could be a big year for Chinese airlines as traffic booms. Will they look to invest abroad?

China's economy is booming again and oil prices are around half their peak 2008 levels. For Chinese airlines, it's a pretty simple equation, with pent-up demand expected to provide very strong traffic growth again in 2010 after surprisingly strong growth last year (particularly in the second half). As a result, airline industry profits should flow again in 2010 after a recovery in earnings in 2H2009. Chinese aviation is bullish again, growing capacity aggressively (taking delivery of almost one in two aircraft bound for Asia Pacific airlines in 2009 - a proportion it will repeat in 2010 and 2011) and - crucially - looking to further consolidate at home. And will expansion mean foreign airline acquisitions, just as China's wealth funds are buying into foreign resources?