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Stimulus plan for aviation industry proposed

By Li Weitao (chinadaily.com.cn)
Updated: 2009-03-06 10:42

China needs to work out a stimulus plan to help the aviation sector ride out of an industry-wide slump, an industry executive said on the sidelines of the annul session of the National People's Congress (NPC).

Air China, China Eastern Airlines and China Southern Airlines, the country's three biggest carriers, have all warned of losses for 2008, the worst year since SARS (Severe Acute Respiratory Syndrome) struck the industry in 2003. They are facing an even tougher time ahead, Liu Shaoyong, chairman of China Eastern Airlines and also a NPC deputy, was cited by Xinhua News Agency as saying.

He urged the government to optimize the air routes, speed up industry consolidation and expand the aviation market across the Taiwan Straits to deal with the industry slump.

China Eastern and China Southern have already secured cash injection from the government to improve their cash flows and Air China Chairman Kong Dong was quoted by Reuters as saying that the company has also asked for cash injection from the government.

However, Liu indicated the cash injections are far from engouth. He said the government need to increase the cash injection this year to help carriers improve competitiveness and fend off the risks.