Chinese airlines to go global

China Eastern Airlines' strategic sales of equities to Singapore Airlines has sharply focused attention on the restructuring of the booming Chinese aviation industry to meet the rapidly growing demand for global travel.
Outgoing airline passengers from China are seen to be increasing at a faster rate than those on domestic flights. In July, for instance, passengers on international flights increased 20 percent year-on-year compared with 15 percent for domestic flights.
The trend is widely seen by aviation industry experts to have touched off the race between domestic airlines to search for equity partners to expand their global reach and to quickly lift the standard of management and service to international levels.
Air China, the nation's largest carrier, forged a cross-shareholding partnership with Hong Kong's Cathay Pacific last year. The agreement between China Eastern and Singapore Airlines, which is pending shareholders' approval, is simply a move in the same direction by another major domestic carrier.
These alliances are the opening moves of what aviation experts expect to be a grand restructuring of the airline industry. Some analysts say Air China, with the most balanced route structure among all the aviation companies, is likely to lead the industry restructuring by merging other companies.
"Consolidation is an inevitable trend in the global aviation industry, you can find examples in developed countries such as Germany and the United States where only a few airlines have survived," Air China Chaiman Li Jiaxiang recently said while releasing his new book Route to Fly in Beijing.
"As one of the world's fastest growing aviation markets, China needs an internationally competitive airline. That's Air China's target. And that must be realized through consolidation," Li said.