China Southern Airlines forecasts 12% annual growth until 2010

SYDNEY (Centre for Asia Pacific Aviation) - According to China Southern Airlines COO, Li Kun, over the next 15 years, the Chinese civil aviation industry will be faced with extraordinary opportunities and challenges including rapid growth of the national economy; China's entry into the World Trade Organization; hosting the 2008 Summer Olympic Games in Beijing; the 2010 World Expo in Shanghai and the Asian Games in Guangzhou ... as well as reforms and consolidation within the civil aviation industry.

Low cost subsidiary under consideration

Mr Li also stated the carrier is “studying” the possibility of establishing a low cost subsidiary within three to five years, although further details were not disclosed.

According to Mr Li, “we believe that given the present policies in China, it is impossible for private-owned airlines to change the competition pattern of the domestic aviation market, because the Chinese government still has the final say in aircraft introduction, route distribution, aviation oil supplies, ticket pricing & allocation of airport resources…However, in the next three to five years, traditional Chinese airlines will be faced with severe challenges and competition pressure from LCCs, as the government further relaxes its controls over the civil aviation industry and the economic growth further stimulates market demand”.

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