Air China to invest RMB 18 bln in expanding capacity

Air China <601111><753>, the nation's top air carrier, plans to invest RMB 18 billion in 2008, of which RMB 11.88 will be used for buying new aircrafts and RMB 6.087 will be used for improvement of infrastructure, sources reported today.

Air China plans to introduce 24 aircrafts in 2008, including eight A320, seven A330 and nine B737, which is less than the 29 aircrafts introduced last year. The decrease mainly comes from the air carrier's concern over its own capacities of maintenance, logistics and management.

Air China's revenue and total profit reached RMB 49.739 billion and RMB 5.203 billion in 2007, up 14.58% and 20.48% year on year, according to its annual report. In 2007, Air China delivered 34.84 million people, up 10.59% over 31.50 million in 2006. The number of delivered passenger of the domestic aviation industry grew by 16.8%.

The company's business on the freight transport was not so good in 2007. However, it has become profitable in the first three months of 2008, compared to the RMB 250 million loss during the same period of last year. After the adjustment of flights in 2007, it will rebuild several B747-400 into freight planes in two years to increase its capacity.

At present, Air China has three transport hubs in Beijing, Shanghai and Chengdu, with 44%, 24% and 36% market share respectively.