Air China, China Southern and China Eastern relish fresh cash injections amid booming demand

2010 has started with a bang for the Chinese aviation industry, with rapid traffic growth, aggressive capacity and fleet expansion, a recovery in earnings, alliances moves and a flurry of consolidation activity. But there are the ever-present growing pains accompanying China's rapid aviation development, with Beijing again dipping deeply into its pockets to address some of the structural shortcomings. Air China, China Eastern Airlines and China Southern Airlines have received large injections of government cash recently, following massive debt-fuelled expansion over the last decade, with pressures on balance sheets exacerbated by losses from natural disasters and wrong-way bets on derivatives in 2008 and the global economic morass of 2009. Beijing has moved to restore some modicum of health to the balance sheets of its Big Three airlines, as the Chinese economy gets back into stride in 2010.

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