China to provide incentives for airlines to improve international competitiveness

CAAC Administrator Li Jiaxiang reportedly stated China would invest more than CNY1.5 trillion (USD232 billion) in the aviation industry over the next five years and will promote consolidation among airlines to improve their international competitivenes (Shanghai Securities News/Reuters, 11-Jul-2011). Mr Li reportedly stated that the country would institute favourable tax policies to help domestic airlines open new international passenger and cargo routes. Mr Li also said the nation's three largest carriers, Air China, China Southern Airlines and China Eastern Airlines, were still too small in scale compared with global rivals. "Via government guidance and market operations, we must push ahead industry consolidation to form, as soon as possible, two or three airline companies with wide networks that are strongly competitive internationally," Mr Li said.