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Airline Spreads Wings to Cash in on Olympics

Jul. 24. 2007

Air China Ltd, the nation's largest international carrier, will add routes and staff as the 2008 Olympic Games fuel demand for travel to its hub, Beijing.

Air China will operate more flights to the United Kingdom, France and Russia, as well as to the United States, Senior Vice President Zhang Lan said in an interview with Bloomberg News in Beijing. It is also applying to add a route to Pyongyang, the capital of Democratic People's Republic of Korea.

The Beijing-based carrier plans to move all operations to a new terminal at Beijing Capital International Airport, set to open in March. The terminal, Asia's largest, will be dedicated to Air China and its domestic and overseas partners, according to the airline. Beijing may receive 1.7 million visitors for the Olympics, including 1.1 million domestic travelers, according to the city's Olympic organizing committee.

"The larger new terminal will make it easier for Air China to add flights," said Jack Xu, a Shanghai-based analyst at Sinopac Securities Asia Ltd. "The new terminal guarantees space."

The carrier aims to boost its market share in Beijing to at least 50 percent from the current 44 percent after the move. It will add several hundred support staff and recruit volunteers to help serve Olympic visitors, Zhang said.

Air China also plans to join the Star Alliance, the world's largest airline grouping, by the end of this year, allowing it to sell tickets on partners' international routes. About 60 percent of Air China's sales come from domestic flights and the rest from international routes.

"Network expansion may help boost Air China's profit," Zhang said.

Expansion work at Beijing airport, due to be completed next year, may reduce congestion and delays for Air China and other carriers. The new terminal and a third runway will more than double Beijing airport's annual design capacity to 78 million passengers.

The air field, Asia's second-busiest after Tokyo's Haneda, has been overloaded as China's economic growth makes air travel affordable for more people. The airport handled 26 million passengers in the first half of this year, a 16 percent increase from a year earlier.

(Shanghai Daily by Irene Shen July 24, 2007)
 

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