China Southern Airlines to set up new Beijing base

Alman Loong

July 18, 2005

Guangzhou-based China Southern Airlines, the country's second-largest carrier, will spend about 1.1 billion yuan (HK$1.03 billion) to establish a back-up base at the Beijing Tianzhu Airport Industrial Zone in preparation for the 2008 Olympic Games.

China Southern, which set up a base at the Beijing Capital Airport last September, said the back-up base, covering 103,323 square meters, will also operate passenger and cargo services from Beijing to other points in the country and overseas.

The company expects the base to contribute 400 million yuan in annual turnover.

Airline officials could not be reached for more details.

Chairman Liu Shao Yong earlier said the carrier will operate five A380 planes from the Beijing Capital Airport, with the first to be delivered by the end of 2007.

Mainland carriers have been expanding their operations since aviation authorities started opening up the industry, and China Southern is focusing its expansion plans on Beijing in anticipation of the increased traffic as a result of the 2008 Olympics.

Before, an airline could only operate flights from a city where it was originally based, but this has changed.

Beijing-based Air China set up a base for domestic and international air services in Shanghai in March this year, throwing down the gauntlet to China Eastern Airlines, which is based in the financial hub.

But Luo Weide, China Eastern chief financial officer, said last month the airline, while acknowledging the Air China challenge, would also benefit from the further opening of the market.

The Beijing Tianzhu Airport Industrial Zone, which serves primarily as a logistics center, hosts 288 domestic and foreign companies with a total investment of 26.4 billion yuan.alman.loong@singtaonewscorp.com