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Airlines to find it hard to establish new units

CHINA'S aviation watchdog has tightened approval for airlines to set up new units as it moves to beef up safety and efficiency of the industry which is hit by a global economic slowdown.

Airlines which plan to form new units must have been operating for more than three years and be profitable for two straight years, the Civil Aviation Administration of China said on its Website yesterday. Airlines are also required to operate more than 10 planes and their units must have at least three planes, according to the regulator.

Airports which handle more than 10 million passengers annually can host a maximum of five units but cargo and regional units are exceptions, the administration said.

"As China's economy and aviation industry are on track toward rapid development, airlines find it necessary to set up units to expand their fleet size and explore new markets," the CAAC said.

The regulator also encouraged airlines to set up units in the northeast and northwest regions to ease pressure on busy airports. The global financial crisis led to a slump in travel demand, forcing airlines to cut capacity and stop investment projects.

China Eastern Airlines Corp, the country's third-largest carrier, has scrapped plans to set up six units and cut investments in several regional airlines.


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