OK Air in stormy times
At the start of December, Okay Airways, China’s first privately owned airline, suspended all passenger services, stranding thousands of travellers and ending a brief and unprofitable chapter in the country’s aviation history.
(It hopes to start operating again but is not sure of the date.)
China still has at least 23 airlines operating domestically, including a variety of start-up private carriers and smaller players controlled by regional governments.
But many analysts expect that number to shrink rapidly as losses mount and the government pushes for consolidation, which will ultimately benefit the state-owned players — China Eastern, Air China and China Southern — known collectively as the ‘big three’.
China Eastern and China Southern have already received RMB7 billion ($1 billion) and RMB3 billion respectively from the government to balance falling passenger numbers and huge hedging losses from the plummeting price of oil.
State-controlled Hainan Airlines has also received RMB500m, according to state media. Industry insiders expect Air China to get as much as RMB10 billion from the government to help it through the hard times.
Source: Financial Times