News

China encourages postponement of aircraft orders

The Chinese aviation regulator is encouraging domestic airlines to postpone or cancel aircraft deliveries, because of the poor economic prospects for 2009. The government believes that a slowing economy will curb the demand for air travel.

The Civil Aviation Administration of China (CAAC) encouraged carriers to retire old aircrafts, and they said they will not be approving new airlines before 2010. CACC also announced that they will not be raising take-off and landing fees in the first half of next year.  And they will still continue to subsidize airlines that charter less profitable regional routes. The regulator is also taking steps to strengthen their alliance with local airlines to make them globally competitive.

These developments can hurt major aircraft manufacturers that deal with Chinese airlines, particularly Boeing and Airbus. The rivals will surely be setting their sights on emerging markets to alleviate a lack of local economic growth from their home market.