CHINA NORTHERN AIRLINES COMPANY, LTD.: 3-1 Xiao He Yan Road, Dadong District, Shenyang City, Liaoning Province, 110043, China; Phone 86 (24) 829-4435; Fax 86 (24) 829-4433; Code CJ; Year Founded 1988. CNA is one of several regional carriers officially established in July 1988 under the auspices of CAAC (General Administration of Civil Aviation of China). Originally formed during the previous December as China Northeast Airlines, it is quickly renamed China Northern. Based at Shenyang, in Liaoning Province near North Korea, the carrier operates the world’s only scheduled international route with a de Havilland (HS) DH 121 Trident, a 2E, from Beijing to the North Korean capital of P’yongyang.
In July 1989, CNA receives the first of 10 McDonnell Douglas MD-82s coproduced in China and earmarked for it a year earlier. The MD-82 begins charter services throughout Manchuria on August 4. The last of its 10 twin-engine aircraft arrives by December. In May 1990, the carrier receives its own two-letter designator code, CJ.
When scheduled services begin in the province and internationally to Siberia and Japan during 1991, the fleet includes 1 Antonov An-24V, 16 MD-82s, 11 Harbin Y-7-100s (Chinese-built Antonov An-26s), and 15 Harbin Y-5s (Chinese-built An-2 biplanes). After the Trident 2E P’yongyang service is suspended at the end of March and its aircraft retired, there are no more scheduled Trident flights in the world. Revenues for the year total $102 million.
Four leased An-24Vs arrive in 1992, along with 5 MD-82s, one of which is permanently placed on the North Korean service.
In 1993, President Wang Kai-yuan oversees a workforce of 4,720 and a fleet that includes 2 leased Airbus Industrie A300-600Rs, 4 An-24V, 2 chartered and 21 owned MD-82s, and 11 Y-7-100s. The route network now includes 120 services to domestic locations as well as stops in North Korea, Japan, and Southeast Asia.
While en route from Changchun to Fuzhou on November 12, an MD-82, with 82 passengers is hijacked to Taiwan by state economic agency employee Li Xiangyu and Dr. Han Shuxue; the aircraft is allowed to return to the PRC and both pirates are held for trial. Li will receive a 13-year prison term and Han 11 years.
While landing at Urumqi following a November 13 service from Beijing, the autopilot of Flight 6901, an MD-82 with 10 crew and 92 passengers reengages and causes the plane to undershoot the runway, hit power lines, and crash into a field 3 km. short of the runway (12 dead).
An MD-82 with 137 aboard en route from Qingdao to Fuzhou is hijacked to Taiwan on December 17 by clothing salesman Gao Jun. Again, the aircraft is allow to return to China and the pirate is tried and jailed, this time for 10 years
The next day, a Chinese couple, accompanied by their 11-year-old son, divert another flight from Ganzhou to Taipei.
An MD-82 with 139 aboard is hijacked to Taipei on June 7, 1994.
Operations continue apace in 1995. China Northern in July is one of seven PRC carriers agreeing to make service with Taiwan easier for passengers from both Chinas; beginning in August, it will offer double boarding passes to customers traveling via Hong Kong on a China Airlines, Ltd. (CAL) connection.
In late November, it is announced that McDonnell Douglas will assist the airline in setting up and operating a 30,000-sq.-ft. training facility at Dalian.
Four-times-a-week roundtrips commence on December 8 between Shenyang and the new airport at Macau.
Enplanements for the year reach 4,837,450.
Airline employment stands at 7,100 in 1996 and the owned fleet now includes 4 A300B4-622Rs, 4 An-24Bs, 23 MD-82s, and 9 Xian Y-7-100s. Also operated, under charter, are 2 A300-600Rs and 3 MD-82s. Orders are outstanding for 2 A300B4-622Rs and 9 MD-90-30s. A new route to Macao is inaugurated during the spring and the first MD-90-30 is turned over to the company at Long Beach in ceremonies on June 27.
The company has an exhibit in the CAAC pavilion at “Airshow China ’96,” the first PRC international airshow, which is held at Zhuhai Airport on November 5-10.
Passenger boardings accelerate 3.6% to 5,018,101 and cargo jumps 20.5% to 79.16 million FTKs.
There is no change in the size of the employee population during 1997. Destinations visited include Beijing, Changchun, Changhsa, Chengdu, Chongqing, Dalian, Dandong, Fuzhou, Guangzhou, Haikou, Hangzhou, Hefei, Jilin, Jinan, Macau, Nanjing, Manning, Pyongyang, Shanghai, Shantou, Shenyang, Shenzen, Tianjin, Urumqi, Wenzhou, Zi-amen, Xian, Yantai, and Zhengzhou.
When the auto-throttle of an MD-82 with 10 crew and 126 passengers fails during takeoff from Dalian on July 20, the aircraft runs 130 m. off the runway and its landing gear collapses. Although the jetliner is badly damaged, there are no fatalities.
An arrangement is reached during August by DHL Worldwide Express with both China Northern and Air Koryo to provide all-cargo shipments between Beijing and P’yongyang, employing belly space aboard the airliners of those two companies.
Enplanements drop 6.2% to 4,708,488, but cargo rises 17.2% to 92.78 million FTKs.
Flights continue apace in 1998. On June 18, weekly roundtrips are inaugurated from Dalian to Toyama, Japan.
Passenger boardings fall again, down to 4.48 million, but freight traffic climbs again, up to 153.46 million FTKs.
In May 1999, orders are placed with Britten Norman at Bembridge, Isle of Wight, for 3 BN-2A Trislanders. The aircraft, which will be assembled from kits made in Romania, will be delivered beginning in January and will supplement the carrier’s aging Y-5s on regional services.
Enplanements for the year dip 1.6% to 4.417,000, but cargo is up a healthy 15.8% to 177.64 million FTKs. An 80-million yuan profit is reported.
Airline employment at the beginning of 2000 stands at 8,000, a huge 69.5% boost. The company now has 13 billion yuan (US$2.73 billion) in assets.
Fleet expansion continues into the new millennium as, on March 7, the carrier signs a contract with Airbus Industrie for the delivery of 10 A321s, beginning at year’s end.
Two Chinese-manufactured McDonnell Douglas MD-90-30s are received on September 19.
Weekly MD-82 return service is inaugurated on October 6 from Harbin to Vladivostok via Mudangijang.
It is reported on October 8 that a new marketing and code-share agreement has been signed with Angel Airlines, Ltd. Under its terms, CNA provides a pair of A300B4-622Rs in November with which to operate Angel’s domestic and international routes from Bangkok.
A week later, the western press reports that the company is in merger discussions with China Southern Airlines Company, Ltd. and that a possible amalgamation (with CSA the surviving partner) may occur before year’s end.
Reacting to rising fuel costs, the CAAC, on November 1, grants the nation’s 34 airlines permission to raise ticket prices by 15% to balance passenger traffic and avgas costs; 23 companies, including China Northern, increase fares on November 5.
CHINA NORTHWEST AIRLINES COMPANY, LTD.: Laodong Naniu, Xian, Shaanxi, Shaanxi Province, 710082, China; Phone 86 (29) 426-3029; Fax 86 (24) 426-2022; Http://www. virtual-airline. co. uk/China-Northwest. html; Code WH; Year Founded 1989.
CNWA is one of several regional carriers established in May 1989 under the auspices of CAAC: General Administration of Civil Aviation of China. Based at Xi Guan Airport, at Xian City in Shaanxi Province, the new entrant, formerly a directorate of the monolithic state carrier, offers regional domestic and charter services in Shaanxi and Gansu provinces for the next two years.
In May 1990, the carrier receives its own two letter designator code, WH. Drawing on an old northwestern China legend that whenever a Feitian (flying Apsaras) appears there is good luck and happiness, the company now adopts an Feitian in flight around a globe as its symbol.
Scheduled operations commence in early 1991, at which time the fleet includes 3 Antonov An-24s, 3 British Aerospace BAe 146-100s, 10 Tupolev Tu-154Ms, 2 Xian Y-7s (Chinese-built An-26s), and 5 Y-7-100s. Revenues for the year total $81 million.
Flight equipment is significantly increased in 1992. Initially added are 2 leased Airbus Industrie A300B4-605Rs and 2 A310-222s. Orders are placed at the end of June for 12 BAe 146-300s.
Upon its arrival from Toulouse in July, the premier A310-222 becomes the airline’s first wide-body aircraft. A network of 70 routes links the Xian base with nearly every city in the People’s Republic. The first 4 BAe 146-300s are delivered in the fourth quarter.
In 1993, President Gao Jun Uue oversees a workforce of 4,000 and a fleet comprising 5 leased A300B4-605Rs, 3 A310-222s, 1 An-24V, 2 An-24RVs, 3 chartered BAe 146-100s, 4 BAe 146-300s, 10 Tu-154Ms, 2 Y-7s, and 5 Y-7-100s. Three more BAe 146-300s are delivered in the spring and the first international routes are initiated from Xian City to Hong Kong, Singapore, and Nagoya.
Flight 2119, a new BAe 146-300 with 5 crew and 108 passengers, fails its takeoff from Yinchuan on July 23 for a service to Beijing. The aircraft impacts earthen banks and lands in shallow water, exploding and splitting into 3 sections (55 dead).
Flights begin to Bangkok in 1994. Its passenger service standards noticeably bad, the airline becomes the object of a lawsuit by 81 disgruntled passengers in April; the suit is heard by the Chaoyang District Court at Beijing.
While en route from Guangzhou on June 6, auto-pilot induced oscillations cause Flight 2303, a Tu-154M with 14 crew and 146 passengers, to shake so violently that it crashes near Xian, its point of origin; there are no survivors in the country’s worst aviation disaster to date.
In July, the company joins with the Nanjing local government to form the regional carrier Nanjing Airlines Company, Ltd.
China Northwest in July 1995 is one of seven PRC carriers agreeing to make service with Taiwan easier for passengers from both Chinas. Beginning in August, it will offer double boarding passes to customers traveling via Hong Kong on a China Airlines, Ltd. (CAL) connection.
Twice-weekly roundtrips commence on December 8 from Shenyang to Macau via Tianjin and from Dalian to Macau via Yantai.
Enplanements reach 2,545,511.
Airline employment stands at 4,700 in 1996 and the owned fleet now includes 2 A300B4-605Rs, 7 BAe 100-300s, 9 Tupolev Tu-154Ms, 2 Xian Y-7s, and 3 Y-7-100s. Also operated, under charter, are 2 A300-600Rs, 3 A310-222s, and 3 BAe 146-100s. Orders are outstanding for 4 A300-600Rs.
The company has an exhibit in the CAAC pavilion at “Airshow China ’96,” the PRC’s first international airshow, which is held at Zhuhai Airport on November 5-10.
Passenger boardings surge 17.3% to 3,078,005 and cargo climbs 36.3% to 56.23 million FTKs.
There is no change in the size of the workforce in 1997. In addition to 70 domestic markets, the company also flies to Hong Kong, Nagoya, Singapore, and Tashkent.
On February 10, security guards are aboard an A300B4 en route from the central city of Wuhan to Zhuhai at the border with the Portuguese enclave of Macau. With the help of some of the 173 passengers on board, the guards are able to overpower a hijacker in his attempt to force the flight to divert to Taiwan. The plane puts down at Guangzhou where the pirate is arrested.
Customer bookings advance by 1.5% to 3,125,000, while freight increases by 69% to 94.98 million FTKs.
During the first quarter of 1998, the regulatory body CAAC (The General Administration of Civil Aviation of China) significantly increases pressure for the amalgamation of the country’s regional airlines into three large groups centered on major carriers. It is hoped that, by 2001, Changan Airlines Company, Ltd. will become part of China Northwest.
Passenger boardings fall to 2.85 million, while cargo traffic jumps to 109.87 million FTKs.
Flights continue in 1999. During mid-May, a pair of Airbus Industrie A320-200s are chartered from ILFC.
Recovering from the Asian economic crisis, the company is able to report passenger bookings up 4.5% to 2,982,000 and a 30.1% freight surge to 142.97 million FTKs.
The workforce totals 4,900 at the start of 2000, an 18.8% rise. The carrier now operates 116 domestic air routes, 5 regional routes, and approximately 10 international charter flights, connecting over 50 large and medium cities at home and abroad.
Flights from Xian to Seoul begin on April 1. The company’s fifth China-Japan air route is inaugurated on August 11 from Xian to Okinawa; the roundtrip A320-200 service is offered twice weekly.
Reacting to rising fuel costs, the CAAC, on November 1, grants the nation’s 34 airlines permission to raise ticket prices by 15% to balance passenger traffic and avgas costs; 23 companies, including China Northwest, increase fares on November 5.
CHINA OCEAN HELICOPTER CORPORATION: 19-20 Floors Agricultural Bank Tower, 188 Jielang Road West, Shenzhen, Guangdong, 418001, China; Phone 86 (755) 559-0779; Fax 86 (755) 559-0757; Year Founded 1982. China Ocean Helicopter Corporation is established at Nantou-Xili in 1982 to provide logistical support for the nation’s new offshore oil industry. Ownership is divided between the state-owned China International Trust & Investment Corporation (CITIC), China National Helicopter Corporation, and four other smaller concerns. Over the next decade, President/General Manager Ma Xian Shi is able to open facilities in Beijing and Shenzhen and total investment reaches $275 million.
The initial fleet comprises 3 Aerospatiale AS-332L1 Super Pumas, which will be joined later in the decade by 3 AS-365N1 Dauphins, license-built in China and known as Z-9s. One of the European-made helicopters is leased from Bristow Helicopters, Ltd. of the U. K., which also supplies personnel and management expertise.
As the 1980s close and the 1990s begin, COHC finds itself with additional responsibilities in the areas of search and rescue (SAR) and the emergency evacuation of oil platforms in the South China Sea prior to typhoons.
The most spectacular event in the company’s history occurs in August 1991 when its Super Pumas resume 18 survivors from a capsized DB29 oil drilling barge in the South China Sea during the advent of a typhoon. The crew of one of the AS-332L1s is awarded the “Crew of the Year” citation by the Helicopter Association International.
The following year, 1992, the company begins to offer charter services to the growing number of foreign tourists flocking to the People’s Republic of China. President Ma oversees a workforce of 400 that operates with 6 Eurocopter Super Puma and Dauphin helicopters.
Flights continue apace in 1993-1998. One AS-332L is withdrawn during the latter year as airline employment reaches 340.
It is understood that service is maintained without change during the remainder of the decade; exact informatin, is, however, unavailable.
CHINA SOUTHERN AIRLINES COMPANY, LTD.: Baiyun Airport, Guangzhou, Guangdong, 510406, China; Phone 86 (20) 6678901; Fax 86 (20), 666-7637; Http://www. cs-air. com; Code CZ; Year Founded 1987. CSA is one of several regional carriers established under the auspices of CAAC (General Administration of Civil Aviation of China); Capt. Yu Yanen is named chairman/presi-dent. Created in the fall of 1987 and based at Guangzhou in Guang-don Province near Hong Kong, the former CAAC directorate receives 3 B-757-221Bs in November.
When the pro-democracy movement is suppressed at Beijing and other cities on June 4, 1989, the U. S. State Department places a temporary ban on the delivery of B-757 navigation systems (and hence further delivery of the aircraft) to the airline. The hold is lifted in July, despite opposition from members of the U. S. Congress.
The airline receives its own two-letter designator code in May 1990, CZ. In July it negotiates an arrangement with GPA Group for the lease of 10 B-737s beginning in December. Also in July, the carrier is officially named China Southern. Hardly have flights begun when tragedy occurs.
En route from Canton to Xiamen on October 2, Flight 8301, a Xiamen Airlines Company, Ltd. B-737-247A with 104 passengers, is hijacked by “active criminal” Jiang Xiaofeng, who claims to have 15 pounds of explosives strapped to his body. The pirate demands to be flown to Taiwan and refuses an offer to be flown to Hong Kong, instead.
With fuel nearly exhausted, the government orders Capt. Cen Longyu, the same pilot hijacked to Taiwan in May 1988, to try a ruse in an effort to convince Xiaofeng that his demand has been met and that he is landing. When this gambit fails, a fight breaks out in the cockpit as the little Boeing completes its final approach to Canton’s Baiyun Airport.
The aircraft hits hard, veers off the runway, sideswipes a China Southwest Airlines Company, Ltd. B-707-336C Stratoliner and then slams into a China Southern B-757-21B, with 118 passengers, preparing to depart on a domestic service to Shanghai. In the explosion and fire that follows and that will burn out both the B-737 and B-757, 84 are killed aboard Flight 8301,47 aboard the B-757, plus the driver of an airport service vehicle. Fifty other passengers are wounded, including the pilot of the Stratoliner. The fireball creates China’s worst air disaster ever.
Operated by the Guangzhou Civil Aviation Bureau, CSA in 1991 flies 1 leased B-737-247A, 5 chartered B-737-3YOs, 6 chartered B-737-2T4As, and 12 B-757-221Bs, as well as 3 Shorts 360s and 5 Xian Y-7s (Chinese-built Antonov An-26s). The first of 10 ordered B-737-5Y0s arrives under lease in February. Destinations visited include Beijing, Changsha, Guangzhou, Hefei, Kunming, Nanning, Shantou, Xiamen, Yichang, and Zhanjiang.
Nonstop flights begin from Beijing to Hong Kong in May; these frequencies are followed by flights from Beijing to Kuala Lumpur that begin in August. In December, flights commence from Guangzhou to Surabaya, via Jakarta, in a reciprocal arrangement with Garuda Indonesia. Also in December, orders are placed for four SAAB 340Bs.
Enplanements for the year total 3,235,650 and revenues are $312 million.
Airline employment stands at 3,801 in 1992 and the first of 4 SAAB 340Bs arrive in April as replacements for the Shorts and Y-7s. Based in Shenzhen, it is the first new technology turboprop aircraft to enter commercial service in the People’s Republic of China.
Also added are 4 leased B-737-247A, 10 chartered B-737-5Y0s, 1 chartered B-757-21B, 1 leased B-767-35HER, and 2 chartered B-767-375ERs. International services are inaugurated to Bangkok, Jakarta, Kaula Lumpur, Manila, Penang, and Surabaya. A former CAAC route linking Beijing with Hanoi via Nanning is resumed.
On November 24, Flight 3943, a B-737-3Y0 with 10 crew and 131 passengers en route from Guangzhou, crashes into a 7,000-ft.-high mountain 20 mi. outside of Guilin Airport while on approach; there are no survivors.
Passenger boardings increase 44.5% to 5.83 million. Revenues total $537 million and expenses are low enough to allow a $102-million operating profit.
President Capt. Yu Yanen oversees a workforce of 7,820 in 1993. His fleet comprises 4 owned and 15 leased B-757-21Bs, 10 chartered B-737-5Y0s, 6 B-737-2T4As, 5 each B-737-3Y0s and Xian Y-7s, 4 each Antonov An-24Vs, B-737-31Bs, SAAB 340Bs, and Sikorsky S-76As, 3 each B-767-375ERs and Shorts 360s, 2 B-737-3Q8s, and 1 each An-24RV and B-767-35HER, the latter leased. Orders are outstanding for 5 B-737-31Bs and 6 B-777-21Bs.
Along with Air China International Corporation and China Eastern Airlines Company, Ltd., China Southern is one of three former CAAC divisions now elevated in stature by CAAC, now acting as a regulatory body, to that of an independent “aviation group.” It is given the authority to acquire its own fleet and responsibility for its own finances, including permission to trade shares on the newly allowed Chinese stock exchanges.
En route from Beijing to Shenzhen on April 6, a B-757-21B with 204 passengers is taken over by steel firm buyer Huang Shu-gang and businessman Liu Baocai, who order the aircraft diverted to Taiwan. At Taipei, the two will receive their requested political asylum in the form of seven-year prison sentences.
In June, the government’s requirement that Chinese domestic passengers produce a letter of reference in order to make a booking is changed to presentation of an identity card. By the third quarter, the company is operating along 90 domestic and 10 intra-Asia routes, plus Hong Kong.
After several years of talks, flights finally begin to Hong Kong in 1994. Early in the year, company representatives begin talking with their counterparts at United Airlines concerning the possibilities of schedule coordination, code-sharing, and joint marketing.
While en route from Fuzhou to Guangzhou on June 6, a B-737-31B with 139 passengers and a crew of 5, is hijacked to Taiwan by food company purchaser Zou Weiqiang. The aircraft and its passengers are allowed to return to the PRC; Zou will be tried and sentenced to 13 years in prison.
Upon its formation, Shenzhen-based Shenzen Airlines Company, Ltd. becomes an operational subsidiary of China Southern. The company will come to own 60% stakes in four more regional carriers: Xiamen Airlines Company, Ltd., Shantou Airlines Company, Ltd., Guangxi Airlines Company, Ltd., and Zhuhai Airlines Company, Ltd.
China Southern in July 1995 is one of seven PRC carriers agreeing to make service with Taiwan easier for passengers from both Chinas; beginning in August, it will offer double boarding passes to customers traveling via Hong Kong on a China Airlines, Ltd. (CAL) connection.
During the summer, a B-777 flight simulator is installed at the company’s Zhuhai training center; it trains pilots for the first B-777-21B, which is delivered at the end of December. On December 24, a new bilateral air agreement is signed between China and the U. S. that will allow the new Boeing to fly a transpacific service.
Enplanements for the year reach 11,711,804.
Airline employment stands at 14,100 in 1996 and the fleet of China’s largest airline comprises 82 aircraft, including the first B-777-212B, which enters service during the first quarter over the “golden triangle” between Guangzhou, Beijing, and Shanghai. Two more B-777-21Bs will be delivered by year’s end.
In the spring, officials from CAAC (The General Administration of Civil Aviation of China) inform the Orient Airline Association that it will not support the applications for membership of its three largest airlines: China Southern, China Eastern Airlines Company, Ltd., and Air China International Corporation. Rather, they insist that China National Aviation Co. (CNAC-2) will be the first admitted.
As the result of a block-space code-sharing agreement signed in April, a Martinair Holland, N. V. B-747-21AC inaugurates twice-weekly roundtrips on October 1 between Guangzhou and Amsterdam via Beijing. Under the agreement, China Southern will transport incoming Martinair freight to other Chinese destinations.
The company has an exhibit in the CAAC pavilion at “Airshow China ’96,” the PRC’s first international airshow, which is held at Zhuhai Airport on November 5-10.
Passenger boardings rise 4% to 12,199,795 and 220.95 million FTKs are operated, a 19.2% increase over the previous year. The passenger total statistically represents one of every four passengers enplaned in the PRC. Revenues hit $1.1 billion. Even so, with its heavily discounted domestic tickets, the company’s local yield is 20% lower than that for rival China Eastern Airlines Company, Ltd.
Employment remains the same throughout 1997 as it had the previous year.
Flights to the Persian Gulf market of Sharjah commence in February; it is the company’s 14th international destination. China Southern also operates 270 domestic routes serving 68 locations.
The first B-777-21B increased gross weight (IGW) is delivered on March 3. Two more of the twin-engine wide-bodies are delivered during the month, neither being IGWs. It is announced during the month that the carrier’s debt is now $2.3 billion.
In April, Delta Air Lines joins with the carrier to offer a block-seat, code-sharing service on CSA aircraft operating on the four-times-a-week Guangzhou to Los Angeles route. The Chinese company agrees to purchase seats on Delta’s flights Los Angeles on to 13 U. S. destinations. The second B-777-21B IGW arrives during the month.
China Southern takes delivery of its first Airbus A320-232 at Baiyun International Airport in Guangzhou on June 24. The premier aircraft will fly two routes from Guangzhou to Chengdu, the capital of southwest
China’s Sichuan Province, and to Xi’an, the capital of northwest China’s Shaanxi Province.
Following Air China International Corporation and the China Eastern Airlines Company, Ltd., China Southern Airlines on July 20 becomes the third Chinese airline to fly between China and the U. S. It also becomes the first to operate a B-777 in transpacific service when one of its Dash-21BAs launches thrice-weekly Guangzhou to Los Angeles return service on July 21. The 7,800-mile route to CSA’s 27th international destination requires a flight of 12-14 hrs.
The Boeing is met with a welcoming ceremony, during which speeches are given by John Driscoll, executive director of Los Angeles World Airports, and China’s deputy consul general in Los Angeles, Wu Zhong-hua. About 100 representatives from local communities are present to greet the flight crew and 60-member Chinese delegation, which is led by Zhang Hanqin, vice chairman of the Standing Committee of the Guangdong Provincial People’s Congress.
To further celebrate the opening of China’s first twin-engine, transpacific route, the airline offers introductory fares of just HK$500 for tickets purchased in the former British colony.
Also in July, the company is listed on the New York and Hong Kong stock exchanges and plans are announced for a domestic offering the following year.
CAAC’s ownership in the carrier is reduced to 68.1% on July 30-31 when Goldman Sachs (Asia), acting as global coordinator, sponsor, and lead manager, places H shares of the airline on the Hong Kong Stock Exchange and American Depository Shares on the New York Stock Exchange. The transactions are the largest stock offering ever by a Chinese firm overseas.
The $632 million raised will be employed to purchase new aircraft, pay debts, and expand facilities.
China Southern begins a 7,200-kilometer, twice-weekly B-777-21B air route from Beijing to the city of Brisbane via Guangzhou, capital of southern China’s Guangdong Province, on September 21. This is the 30th international air route on the carrier’s charts. The Australian city is followed onto the network by Kuala Lumpur.
With a 27.1% share of the domestic market and 273 routes throughout the country, CSA at year’s end is the nation’s dominant domestic airline with the largest route network. It is also the 17th largest airline in the world in terms of operating profit and 20th in passenger boardings and net profit.
Customer bookings total 15.24 million, while operating revenues jump 12.6% to $1.55 billion. With costs of $1.26 billion, the operating profit moves to $284.35 million and there is a $137.94-million net profit. There will, however, be no dividend for the year as the company will turn the profits into business expansion.
During the first quarter of 1998, the regulatory body CAAC (The General Administration of Civil Aviation of China) significantly increases pressure for the amalgamation of the country’s regional airlines into three large groups centered around major carriers. It is hoped that, by 2001, Guizhou Airlines Company, Ltd. will be taken over by China Southern.
The acquisition actually comes more quickly than envisioned. In April, China Southern takes a 60% stake in Guizhou.
The Asian financial crisis, competition from foreign airlines, retrenchment of state enterprises, and falling business traffic caused by improved road infrastructure all contribute to a decline in demand for air transport. The situation is exacerbated by an increase in domestic airline capacity.
The airlines, with little success, introduce a variety of fare reductions. CAAC (The General Administration of Civil Aviation of China) now steps in and requests that the companies delay new aircraft deliveries. Some will lease out or park their latest additions. CSA parks its 3 B-777-21Bs at its Guangzhou hub in early August. On August 27, it announces plans to cut two aircraft leases ahead of schedule and not renew two others.
Major product changes occur on the nonstop B-777-21B service from Guangzhou to Los Angeles on September 22. Eighteen formerly first-class seats are relabeled Premium Business Class seating, while the former business-class seats become Premium Economy Class seating. In both classes, the seats are larger.
On November 2, CSA announces that it will launch its own frequent flyer program, Sky Pearl Club.
The company is a participant in “Airshow China ’98” at Zhuhai Airport between November 16-23. On opening day of the event, CSA officials inform Reuters, Ltd. that they are in discussions with numerous other carriers concerning the possibility of an early launch of all-cargo services to the U. S. and Europe. Among the airlines seen as partners in these endeavors are Delta Air Lines, Federal Express, Martinair Holland, A. S., and Asiana Airlines, Ltd.
A comprehensive strategic marketing alliance is entered into with Delta Air Lines on December 10. In the new year under its terms, the two will link their frequent flyer programs. In addition, CSA will purchase blocks of seats for sale under its code on Delta flights from Los Angeles to Atlanta, Boston, Dallas (DFW), Chicago (ORD), Honolulu, Las Vegas, Miami, Minneapolis (MSP), New York (JFK), Philadelphia, Portland, San Francisco, and Washington, D. C. (DCA). Delta, meanwhile, will place its code on CSA’s thrice-weekly Los Angeles to Guangzhou B-777-21B roundtrips.
Passenger boardings increase 27% to 15.05 million, while 479.01 million FTKs are also operated, a 6.7% boost. As the result of fierce price competition and a slowdown in air travel, the mainland’s largest airline suffers a 7.6% downturn in revenues to 11.8 billion yuan ($1.43 billion). Operating costs reach $1.36 billion, leaving an operating gain of $65.1 million. On the down side, there is a 543-million yuan ($65.7-million) loss.
At the beginning of 1999, CSA is the largest PRC airline in terms of passenger volume, number of scheduled flights per week, number of hours flown, number of routes, and size of aircraft fleet. A total of 300 domestic, 21 Hong Kong regional, and 40 international routes are flown and an average of 2,698 scheduled flights per week are operated to 90 destinations. The fleet contains 102 aircraft, including 81 Boeing and 15 Airbus units, with a combined age of 5.38 years.
The carrier’s first advertising campaign in the U. S. begins on February 16, when outdoor billboards go up in the Los Angeles area and an ad appears in the business pages of The Los Angeles Times and the western edition of The Wall Street Journal. In addition, ads also appear in the Asia/China sections of the February issues of Travel Weekly and Trave-lAge magazines, which come out the next day.
Chairman Yan En Yu announces on February 25 that CSA will commit US$250 million over the next 20 years to upgrade facilities and pilot training center, Western Australia Flying College, at the airport facilities in Merriden and Jandakot, 250 km. E of Perth, Australia. The airline expects to educate 3,000 flyers.
On March 12, CSA gives a guarantee that its computer systems will be Y2K compliant by July.
Following the christening ceremony for the CSA B-777-21B The Pearl of the South and a media presentation by senior executives, a preservice code-sharing flight with Delta Air Lines is undertaken, also on March 12, from Los Angeles to Guangzhou.
Thrice-weekly, nonstop B-777-21B block-seat, dual-designator service with Delta begins on March 28 from Los Angeles to Guangzhou. In addition to the seats the American major has purchased on the Chinese line’s transpacific flights, CSA is able to book space on Delta flights from Los Angeles to Atlanta, Las Vegas, Honolulu, Dallas (DFW), New York (JFK), Portland (Oregon), and San Francisco.
The company, on April 14, announces the official opening and commercial use of its first A320 flight simulator as part of its more than 100,000-sq.-ft. expansion at Zhuhai; CSA now operates the largest pilot training facility in Asia.
Twice-weekly A320-232 roundtrips commence on May 19 between Jinjiang and Manila.
At the annual general meeting held at Hong Kong on June 15, Director Yang Yuan resigns and the nonexecutive director, Jin De Qin, is removed; they are succeeded by Han Ma Zhang and Simon To, respectively.
Several Hong Kong morning newspapers report on July 9 that PRC officials may force the merger of CSA with Air China International Corporation. The report had first been carried in the British industry magazine Flight International. The confusion causes the Hong Kong stock exchange to temporarily suspend trading in CSA shares. Later in the day, the restructuring office of CAAC (The General Administration of Civil Aviation of China) issues a statement denying plans to forcibly amalgamate the two companies.
Following up on the Flight International and local newspaper reports, executives at China Southern confirm on July 13 that preliminary discussions have been held with Air China International Corporation concerning a possible merger or partnership sometime in the future. Analysts suggest a merger might be a difficult feat to accomplish.
Twice-weekly A320-232 nonstop roundtrips are inaugurated on August 9 between Guangzhou and Phnom Penh. In a grand ceremony at Toulouse on August 20, CSA accepts the last of 20 A320-232s first ordered in 1997.
During the fall, CAAC executive, aviation media types, and various airline employees join in a wide-ranging, but ultimately empty discussion concerning the possible merger of CSA with Air China International Corporation. Flight International reports on October 13 that the discussions have broken down due to CSA concern over the financial shape of Air China.
Two A320-232s are subleased to Swissair, A. G. Weekly frequencies between Guangzhou and Los Angeles are increased from three to four on December 6.
Assisted by recovery from the Asian economic crisis and the government’s curb of domestic fare discounting, passenger bookings inch up 0.4% to 15,112,000 while 616 million FTKs are operated, a 10.4% improvement. Operating revenues jump 12.2% to $1.6 billion while expenses rise 1.2% to $1.38 billion. The operating profit rises to $223.4 million and the previous year’s net loss becomes a $9.95-million net profit.
By the start of 2000, annual figures for airline employment have increased 103.4% to 15,902. Among the world’s top 25 airlines at the beginning of the new millennium, CSA is 24th in terms of passengers and 19 th in operating profit.
Saturday-only A320-232 roundtrips between Guilin and Seoul commence on January 7.
On February 1, two B-777-2B1s are wet-leased for two months to Biman Bangledesh Airlines, Ltd. The wide-bodies will operate 128 flights between Dacca and Jeddah transporting Muslim Hadj pilgrims.
During the first quarter, the company sells and leases back 4 B-757-2B1s and begins to emphasize e-marketing over the Internet via a new website.
Twice-weekly B-757-2B1 roundtrips commence on March 28 between Shanghai and the Tibetan capital of Lhasa.
Employing a B-747-200F chartered from Atlas Air, CSA, on March 29, inaugurates its first international freighter service over a thrice-weekly roundtrip route from Shenzhen to Chicago (ORD). Previously a charter, the Wuhan-Hong Kong B-737-300 route is converted into a daily scheduled roundtrip on May 1. A marketing and code-share agreement is signed with Japan Air System, Ltd. on June 19.
In response to a fatal June 22 Xian Airlines Y-7-100C crash, CAAC delivers a major reorganization plan to the China State Council in late July. Among the proposals is a release of all airlines from the requirement that they purchase aircraft through CAAC. More important, however, is a recommendation that the 13 largest of China’s 34 carriers be consolidated into three groups built around China Southern, China Eastern Airlines Company, Ltd., and Air China International Corporation.
A code-sharing agreement is signed with Vietnam Airlines on July 26 providing for dual-designator service from Guangzhou to Ho Chi Minh City.
CSA is the first to take operational and managerial control of another airline under the CAAC mandate. Although it will be allowed to retain its name, Zhongyuan Airlines, based at Zhengzhou in Henan Province, almost immediately becomes part of the Southern Airlines Group on August 1. It is anticipated that China Southwest Airlines Company, Ltd. and Yunnan Airlines Company, Ltd. will be acquired later in the year.
Also in August, the company unveils a new and ambitious cargo plan; to further its freight effort, CSA will acquire 3 B-747-400Fs and build a 25,000-sq.-ft. cargo center at Shenzhen by 2002.
E-ticketing for domestic services is expanded in September and is now available from the company base at Guangzhou to over 60 Chinese cities. A B-747-47UF ACMI contract begins with Atlas Air on September 15 over a route from Shenzhen and Shanghai to Chicago (ORD).
A code-sharing agreement is signed with JAS (Japan Air System, Ltd.) on September 22 covering service over a route from Guangzhou and Osaka (KIX).
Merger discussions with Air China International Corporation, broken off earlier, have been resumed and quietly concluded during the year. However, it is reported on October 2 that a merger proposal submitted by the two to the CAAC has been rejected on the grounds that the resultant carrier would be too large.
Two weeks later, the Western press reports that the company is in merger discussions with China Northern Airlines Company, Ltd. and that a possible amalgamation, with CSA the surviving partner, may occur before year’s end.
Thrice-daily B-757-2B1 roundtrips are inaugurated on October 29 from Guangzhou to Singapore via Hong Kong and to Kuala Lumpur via Bangkok.
Reacting to rising fuel costs, the CAAC, on November 1, grants the nation’s 34 airlines permission to raise ticket prices by 15% to balance passenger traffic and avgas costs; 23 companies, including China Southern, increase fares on November 5.
New Australian B-777-2B1 return service from Guangzhou is launched on December 6, twice weekly to Sydney via Melbourne and once per week directly to Sydney.
CHINA SOUTHWEST AIRLINES COMPANY, LTD.: Shuangliu Airport, Chengdu, Sichuan, 610202, China; Phone 86 (28) 581-4466; Fax 86 (28) 558-2630; Http://www. cswa. com; Code SZ; Year Founded 1987. CSWA is one of several regional carriers established in October 1987 under the auspices of CAAC (General Administration of Civil Aviation of China). Based at Shuangliu Airport at Chengdu in Sichuan Province and based on its parent’s former Chengdu regional directorate, it inaugurates service in early 1988 with 9 B-737-200s. In 1989, the fleet is altered to include 4 B-737-3Z0s,
5 B-707-336B/Cs, and 2 Tupolev Tu-154Ms.
By 1990, the company is visiting some 30 large and small destinations over 50 routes in Sichuan province, as well as Lhasa, Tibet’s airport at an altitude of 11,600 feet. In May, it receives its own two-letter airline designator code, SZ.
En route from Canton to Xiamen on October 2, Flight 8301, a Xiamen Airlines Company, Ltd. B-737-247A with 104 passengers, is hijacked by “active criminal” Jiang Xiaofeng, who claims to have 15 pounds of explosives strapped to his body. The pirate demands to be flown to Taiwan and refuses an offer to be flown to Hong Kong instead. With fuel nearly exhausted, the government orders Capt. Cen Longyu, the same pilot hijacked to Taiwan in May 1988, to try a ruse in an effort to convince Xiaofeng that his demand has been met and that he is landing. When this gambit fails, a fight breaks out in the cockpit as the little Boeing completes its final approach to Canton’s Baiyun Airport.
The aircraft hits hard, veers off the runway, side-swipes a China Southwest Airlines Company, Ltd. B-707-3J6B Stratoliner and then slams into a China Southern Airlines Company, Ltd. B-757-21B with 12 crew and 110 passengers preparing to depart on a domestic service to Shanghai. In the explosion and fire that follows and that will burn out both the B-737 and B-757, 84 are killed aboard Flight 8301,47 aboard the B-757, plus the driver of an airport service vehicle. Fifty other passengers are wounded, including the pilot of the Stratoliner. The fireball creates China’s worst air disaster ever.
The fleet in 1991 includes 1 B-707-3J6B, 3 B-707-3J6Cs, 5 B-737-3Z0s, 5 Tu-154Ms, and 5 Xian Y-7-100s, which are Chinese-built Antonov An-26s. Revenues total $118 million.
The amount of flight equipment available is significantly increased in 1992. Added are 3 B-737-3Z0s, 2 B-757-2Y0s, 4 B-757-2Z0s, and 4 Harbin Yu-12 Ils. One Tupolev is withdrawn.
In 1993-1994, President Zhou Zhengquan oversees a workforce of 3,400 and a fleet comprising 6 owned and 5 leased B-737-3Z0s, 4 Tu-154Ms, 4 each Yu-12 Ils, B-737-3Y0s, and B-737-3Q8s, 3 each Y-7-100s, B-707-3J6Cs, B-757-2Y0s, and B-757-2Z0s, and 1 B-707-3J6B.
The number of domestic routes is increased to 70 and a new service is offered linking Lhasa to Katmandu. On February 18 of the latter year, a B-737-3Y0 with 5 crew and 130 passengers is hijacked to Taiwan while en route from Chengdu to Fuzhou. Businessman-pirate Lin Wen-qiang has also brought along his wife, foster mother, and two sons. The aircraft and its passengers, minus the Lin family, are allowed to return to the PRC; Lin, himself, will be tried and sentenced to nine years in jail.
Enplanements reach 5,481,433 in 1995. The company leases aircraft to China National Aviation Corporation (CNAC-2), a subsidiary of CAAC, which employs them to launch charter flights to Kai Tak Airport at Hong Kong.
A five-year experimental airlift program ordered performed by the airline by CAAC (The Civil Aviation Administration of China) on behalf of the Chinese Air Force is completed during the spring. CSA will continue to offer flights for the military between Chengdu and the capital of the Tibet Autonomous Region. The experimental project has proven to be such a success that CAAC now orders a Chinese Air Force liaison office set up in each of the country’s major regional airlines.
China Southwest in July is one of seven PRC carriers agreeing to make service with Taiwan easier for passengers from both Chinas; beginning in August, it will offer double boarding passes to customers traveling via Hong Kong on a China Airlines, Ltd. (CAL) connection.
Airline employment stands at 7,000 in 1996 and the fleet includes 39 aircraft.
The company has an exhibit in the CAAC pavilion at “Airshow China ’96,” the PRC’s first international airshow, which is held at Zhuhai Airport on November 5-10.
Passenger boardings rise 3% to 5,650,961 and 98.37 million FTKs are operated, a 16.4% increase over the previous year.
The workforce in 1997 remains the same as the previous year. Among the markets served by the company are Bangkok, Beijing, Dalian, Guangzhou, Hong Kong, Kunming, Lhasa, Shanghai, Singapore, Urumqi, Wuhan, Xiamen, and Zhengzou.
The company on June 13, announces the launch of a new route on June 26 linking Chengdu and Wuhan, capitals of Sichuan and Hubei provinces and the famous scenic spot of the Huangshan Mountain (Yellow Mountain) in eastern China’s Anhui province. The move is made to promote the ’97 China Tourism program. The company’s Boeing 737s take off at 9:05 a. m. every Thursday and Sunday from Chengdu and return the same day.
Customer bookings drop 4.3% to 5,407,675, while cargo is up 1.9% to 100.2 million FTKs.
During the first quarter of 1998, the regulatory body CAAC (The General Administration of Civil Aviation of China) significantly increases pressure for the amalgamation of the country’s regional airlines into three large groups centered around major carriers. It is hoped that, by 2001, China Southwest will be acquired by China Eastern Airlines Company, Ltd.
Weekly return service begins on November 20 between Chengdu and Lhasa, the capital of the Tibetan Autonomous Region. The first of 3 A340-313s on order is received at month’s end.
Passenger boardings fall to 4.74 million, while freight traffic climbs to 166.7 million FTKs.
While en route from Chengdu, capital of Sichuan province, to the port city of Wenzhou on February 24, 1999, a Tu-154M with 10 crew and 51 passengers slams into a hilly rural area some 18 mi. from its destination; there are no survivors. At least one passenger, businessman Lei Ming, has missed the flight for which he was booked. “The flue saved my life,” he informs the Shanghai Express.
The carrier’s 4 remaining Tu-154Ms are withdrawn from service for inspection on February 26 and will not fly again until the cause of the February 24 disaster is determined. Meanwhile, 1 each leased A340, B-737, and B-757 are brought in to ensure regular services.
A one-year aircraft, crew, management, and insurance (ACMI) wet-lease contract is signed with Royal Nepal Airlines Corporation on March 8. Under its terms, China Southwest will fly a B-757-2Z0 on behalf of the Nepalese on routes from Kathmandu to Singapore, Hong Kong, New Delhi, and London.
On April 16, weekly roundtrips commence between Lhasa and Xin-ing in Qinghai Province. The 1,500-km. route passes over the Kunlun, Tanggula, and Nyainquetanglha mountain ranges where the weather is often risky.
The first of 3 new B-737-8Z0s joins the company on November 1; China Southwest is the third Chinese carrier to take delivery of this Next Generation jetliner. The new plane is placed into service between Chongqing and Shenzhen, Haikou, Kunming, and Urumuqi.
The year’s enplanements rise 3.9% to 4,925,000, but cargo traffic dips 0.1% to 155.16 million FTKs.
Airline employment by the start of 2000 has risen an impressive 115.1% over the previous 12 months to 8,603.
Two passengers unsuccessfully attempt to hijack to Taiwan a company flight en route Chengdu to Nanchung on February 29; after they are subdued, the plane diverts to Fuzhou.
Employing the leased B-757-2Z0, twice-weekly roundtrips are inaugurated on March 28 from Lhasa to Shanghai via Xian. The next day, the company places an order for three new aircraft of that type for delivery beginning in May 2001. Delivery of an earlier order for B-737-700s will be turned over to another Chinese carrier.
Twice-weekly B-737-8Z0 return service is inaugurated on July 1 between Chongqing and Seoul. The flights are the first to be directly operated by a Chinese airline from southwestern China to South Korea.
In response to a fatal June 22 Xian Airlines Y-7-100C crash, CAAC delivers a major reorganization plan to the China State Council in late July. Among the proposals is a release of all airlines from the requirement that they purchase aircraft through CAAC. More important, however, is a recommendation that the 13 largest of China’s 34 carriers be consolidated into three groups built around Air China International Corporation, China Eastern Airlines Company, Ltd., and China Southern Airlines Company, Ltd. China Southwest is scheduled for takeover by the latter.
Also in June, China Southwest becomes the first airline to recruit air hostesses from Tibet, with over 400 applications soon received. In a September 5 Lhasa lottery and ceremony, 15 Tibetan girls are chosen to take the carrier’s three-month flight attendant training course.
Reacting to rising fuel costs, the CAAC, on November 1, grants the nation’s 34 airlines permission to raise ticket prices by 15% to balance passenger traffic and avgas costs; 23 companies, including China Southwest, increase fares on November 5.
World History
