CAA (CENTRAL AMERICAN AIR LINES, S. A.): Honduras (1925-1927). Dr. T. C. Pounds, who had started the first air service in Central America in 1923 but who went out of business following the defection of his pilot to Empresa Dean, S. A., returns to the Honduran air transport scene in early 1925.
Having persuaded a pilot named Morgan to contribute an Aeromarine flying boat to this new enterprise christened CAA (Central American Airlines), Pounds relaunches service to the capital city of Tegucigalpa— this time from Puerto Cortes, 200 kilometers away on the Gulf of Honduras. On December 4, the company’s northern terminus is transferred to San Pedro Sula, headquarters town for United Fruit Company.
A Caudron is added to the fleet in 1926 and services are maintained, but by 1927 the Pounds-Morgan partnership is finished, along with the airline.
CAAC (GENERAL ADMINISTRATION OF CIVIL AVIATION OF CHINA): 155 Dong-si Xi Dajie, P. O. Box 644, Beijing, 100710, China; Phone 86 (1) 401-2233; Fax 86 (1) 401-2210; Code CA; Year Founded 1952. After decades of struggle, by the summer of 1949 the supporters of Communist leader Mao Tse-tung are in possession of almost all of mainland China. Regularly scheduled operations by the airlines of the Nationalist government, Central Air Transport Corporation (CATC) and China National Aviation Corporation (CNAC-1) cease on August 17 and they begin sending their aircraft to safety in Hong Kong. Mao Tse-tung announces the formal creation of the People’s Republic of China on October 1. The only Western company still flying is Hamiata, the Sino-Soviet joint stock company that is providing small-scale services in the northwest part of the country.
On November 1, the new government in Peking establishes the China Civil Aviation Administration (CCAC) to operate ad hoc air services on 12 routes linking the capital with the southern communities of Canton, Hankow, Chongqing, and Kunming.
C. Y. Liu, CNAC-1’s Chinese managing director, defects to Tientsin on November 9 with 8 Douglas C-47s and 3 Curtiss C-46 Commandos from the company’s 56-plane fleet, plus the CATC Convair CV-240, the only one in China.
Among the defectors is future CAAC Director General Hu Yizhao, now an airplane mechanic. Following their arrival, the aircraft crews are treated to a great feast at the Peking Hotel, where Premier Chou En-lai presides. Shortly thereafter, the Convair is christened Beijing and is named flagship of the new airline that the government orders formed.
Those CNAC/CATC fleet elements at Hong Kong are now grounded under guard, but a British court in the crown colony acts on December 3 to prevent the Nationalists from taking control of the aircraft. Over the next several weeks, hundreds of out-of-work CNAC-1 technicians and aircrew flee to Peking, secretly smuggling out maintenance manuals and spare parts for the planes acquired on November 9. A three-year legal battle will follow before Civil Air Transport (CAT) is able to claim the contested aircraft.
The Civil Aviation Bureau of the PRC is established at Peking in January 1950 as the first step in the establishment of a national airline. To take over services previously provided by CATC/CNAC, now based on Formosa, the People’s Aviation Corporation of China is formed on March 27, with Soviet interest and assistance. The new concern’s name is longer in both Chinese (Ren Ming Hong Kong Kun Sze) and Russian (Sovietsko-Kitaysko Aktsioneren Obschestvo Grazhdanskoi Aviatsii) than it is in English (Sino-Soviet Joint Stock Company). As a result, the company is familiarly known as SKOAGA. It will, at least for awhile, coexist with CCAC, in what might be seen as two autonomous divisions of a young national system.
Shareholding in SKOAGA is divided on an equal fifty-fifty basis between China and Russia and the previous Sino-Soviet joint carrier Hamiata is merged. A Russian fleet of Lisunov Li-2s is delivered to supplement the CNAC and CATC units acquired earlier. The airline takes over the Hamiata routes, including the strategic service to Alma Ata, while simultaneously starting services in Manchuria over a network earlier flown by the Japanese. A new frequency is also initiated to Chita, in Siberia, where a connection can be made with Aeroflot Soviet Airlines flights to Moscow.
CCAC continues to operate its routes in southern China. On August 1, it inaugurates a new service from Canton to Chengtu via Hankow, Tientsin, and Chongqing. Operations continue apace over the next three years. A new route is opened to Irkutsk in Siberia in December 1952. A 1,200-mile Urmuchi-Kashgar route is started in 1953, linking the western Chinese provinces to those in the east.
Having matured both in its administrative ability and in its jurisdiction, the Civil Aviation Bureau is able to organize a merger of SKOAGA and CCAC in March 1954. The new concern is named the Civil Aviation Administration of China (Zhongua Ming Hong Jui) or Minkaiduy and is placed under the direction of Air Force General Kuang Jen-nun, a Korean War Mig-15 pilot.
Modeled upon the organization of Aeroflot Soviet Airlines, the company’s major administrative units are established as directorates at Peking, Shanghai, Canton, Shenyang, Sian, and Hankow, with subdirectorates at Lanchow and Chongqing. The establishment of the new carrier is completed by December 30.
The year 1955 is one of amalgamation as the new airline’s DC-3 and Li-2 fleet successfully integrates operations over the combined new route network. An initial few (later hundreds) Antonov An-2 biplanes are acquired and employed to start services from Lanchow to Hofei and Sining. Imported Soviet Ilyushin Il-12s/14s begin to supplement the Li-2s and plans are made for modest foreign expansion the following year to nations of similar political outlook.
The first international expansion (other than the Soviet Union) is an April 11, 1956 Il-14 route from Kunming to Rangoon via Mandalay. An Li-2 route proving flight is made from Peking to Lhasa, Tibet, on May 25, with regularly scheduled service beginning on June 27. Meanwhile, Canton to Hanoi service is launched on May 29 via Nanning.
A comprehensive domestic route network is developed between 1957-1960. It is reported during these years that, since the creation of the CAAC, the route network has doubled in length to 16,000 miles, 29 routes are operated, and 42 Chinese communities have obtained air service. It is also suggested that PRC commercial aviation has a perfect safety record.
Under unknown circumstances, an Il-14 is lost 70 km. from Xian on April 5, 1958.
In the international arena, a new route is opened on April 3, 1959, from Beijing to Pyongyang, North Korea, via Shenyang. Five Vickers Viscount 843s are ordered from the U. K. in 1961.
In April 1962, the Civil Aviation Administration of China is reformed into the General Administration of Civil Aviation of China (also known as CAAC) and, again on the Soviet model, is assigned such additional duties as cargo, training, agricultural flying, rotary-wing support operations, etc. The commercial division, now operating under the historic China National Aviation Corporation (CNAC-2) name, comprises 20 Li-2s, 50 Il-12s/14s, and 6 Il-18s.
The five Viscount 843s are delivered in 1963 and placed into service. Simultaneously, an interline agreement is signed with British Overseas Airways Corporation (BOAC) and negotiations are undertaken with Aeroflot Soviet Airlines to make the Soviet’s Moscow-Peking service a joint operation.
On April 29, 1964, Pakistan International Airlines Corporation (PIA) inaugurates Boeing 707-340 Stratoliner service from Dacca to Shanghai via Canton. The Karachi-based company has the distinction of offering the first Western airline service into the PRC since the 1949 revolution and its Boeing is the first Western jetliner to visit China. Direct propliner flights from Canton to Phnom Penh also begin during the year. Events of 1965 have nothing so spectacular to offer.
In early 1966, Antonov An-2s are employed to begin weekly services from Urumchi to Sharasume and from Urumchi to Tahcheng via Kara-mai. A twice-weekly service is also offered from Lanchow to Sinang. As a result of the establishment of diplomatic relations with France two years earlier, Air France, on September 20, gives Chinese customers a direct Stratoliner link from Shanghai to Paris; this first European connection is flown via Phnom Penh, Karachi, Cairo, and Athens.
Beginning on April 22, 1967, reciprocal services to Pakistan are widened. Orders are made in 1968 for a number of Antonov An-24s, 2 Tupolev Tu-134s, and 6 Mil Mi-6 helicopters. An Il-14 crashes at Beijing on December 5.
As political difficulties with the Soviet Union intensify toward decade’s end, little is heard of the Chinese carrier in the West. Orders are placed in Great Britain during 1969 for 6 Hawker Siddeley (HS) Trident 3Bs.
To replace aging Soviet aircraft, 4 HS Trident 1Es are purchased from Pakistan International Airlines Corporation (PIA) in 1970. The carrier’s 20 Li-2s and 30 Il-12s are retired as new An-24s enter service. An order is sent to Moscow for 5 Ilyushin Il-62s.
A policy of more relaxed relations with the outside world is implemented and plans are made to expand international services. An Il-14 is lost at Guiyang on November 14.
The first of 5 Il-62s arrives in early May 1971 and, with an allChinese crew, makes a roundtrip on May 13 over the trunk line from Beijing to Guangzhou; the long-legged jetliner allows cancellation of the previous propliner stop at Wuhan. The flight is the first indigenous civil jetliner flight in Chinese aviation history.
Orders worth $48 million are placed on August 24 for 33 Trident 2Es as 2 Nihon YS-11A-200s join the fleet. Future Air China International President Xu Bai Ling is a crew member on the flight bringing Secretary of State Henry Kissinger to Beijing. One of the ex-PIA HS Trident 1Es transporting out-of-favor Defense Minister Lin Piao on a specially arranged flight crashes north of Beijing in September. It is widely rumored that the loss is an act of sabotage.
In addition to some 300 Antonov An-2s involved in agricultural flying, the fleet in 1972 comprises approximately 50 Il-14s, 9 Il-18s, 6 Viscount 843s, and 2 YS-11A-200s. Air Force One brings U. S. President Richard M. Nixon to China on February 21; the dramatic visit will have an important impact on PRC aviation, as well as world diplomacy.
On July 24, orders are placed for 3 Anglo-French Concordes at $34-million-per-copy (they will never be delivered). On August 6, an Il-18 shows an in-flight motion picture for the first time in China. Huge, new-some say historic-orders for Western flight equipment are now placed: $56 million in August for 6 Trident 2Es and $120 million on September 12 for 10 B-707-3J6B Stratoliners, plus $26 million the same day for 40 spare Pratt & Whitney JT3D jet engines.
The first Trident 2E arrives from the U. K. on November 13. The same day, another $59 million is committed for 6 more Trident 2Es and 2 Trident 3Bs.
Five more Il-62 jetliners are purchased from the Soviet Union in 1973. The first domestic Trident 2E service is flown on March 15 between Beijing and Shanghai. The An Il-62 arrives in Tokyo from Shanghai on March 23 on a flight designed to pave the way for direct flights between the People’s Republic and Japan. On April 18, scheduled weekly Il-62 European flights are started to Bucharest and Tirana via
Tehran. The first B-707-3J6B arrives at Beijing in August and is initially employed on a proving flight to Albania.
A Trident 2E makes a flight from the mainland to Hong Kong on September 28, the first such flight since the Communists came to power 23 years earlier. Orders are placed for 15 Australian Aircraft Factory No-mand N.2s while a $100-million request of December 4 for 13 additional Trident 2Es and 2 3Bs is the last made for that aircraft type.
Direct Peking to Moscow Il-62 flights commence on January 30, 1974. In commemoration of the second anniversary of the establishment of diplomatic relations, CAAC and Japan Air Lines Company, Ltd. (2) initiate direct B-707-3J6B services between Peking and Tokyo on September 29. CAAC will be allowed to use Tokyo as a stopover on its forthcoming flights to Canada and the U. S.
Weekly roundtrip Stratoliner service from Beijing to Paris is launched on October 27 via Karachi. Tirana is dropped from the route map on November 29 as B-707-3J6Bs replace Il-62s on the China-Iran-Romania service.
During 1975-1977, additional international routes are started, growing in number from 107 to 160 and the number of weekly flights increases from 273 to 500. Director General Ma Jen-Hui’s fleet is upgraded and comes to include 13 Li-2s, 50 Il-14s, 11 Il-18s, 7 An-12s, 5 Viscount 843s, 20 Trident 2E/3Es, and 5 Il-62s, 10 B-707-3J6Bs. In addition, there are 37 An-24s, 31 An-26s, 300 indigenously built Y-5s, and 30 N-30s.
Osaka joins the Asian route network in 1976 while an An-24, with 40 passengers, crashes at Changsha on January 21, while on final approach to Baiyun Airport, Guangzhou; there are no survivors.
Shen Tu is named director general early in 1978. A de Havilland Canada DHC-6-200 Twin Otter is delivered on April 1 and, simultaneously, Stratoliner service is inaugurated to Addis Ababa via Karachi. Weekly B-707-3J6B flights commence to Zurich via Urumchi (technical stop) and Bucharest.
The 117th and last Trident built, a 2E, is delivered on June 17, followed by another 2E on October 11. One of the new units inaugurates regularly scheduled services from Guangzhou to Hong Kong on October 12.
An order is placed with Boeing on December 16 for 3 B-747SP-J6s. The request is the first from CAAC since the Stratoliner order of September 1972.
A three-year old service to Phnom Penh is suspended on February 1, 1979.
AHS-121 Trident 2E with 12 crew crashes into a factory while climbing away from Guangzhou on March 14; all aboard are killed, along with 32 people on the ground.
Weekly Il-62 service is launched to Frankfurt on May 3 via Tehran and Bucharest.
Flights to Manila commence on September 4 and Nagasaki becomes the carrier’s third Japanese destination on November 1. The carrier begins recruiting female flight attendants at Peking on December 23; within 3 days, 800 have applied for an estimated 140 positions.
The first B-747SP-J6 is delivered on February 29, 1980. An An-24V is lost at Changsha on March 20; there are no other details on the accident.
The new B-747SP-J6 Jumbojet is employed to inaugurate weekly roundtrip Beijing to Paris flights on April 2.
A pooled daily service with Cathay Pacific Airways (Pty.), Ltd. on June 21 between Guangzhou and Hong Kong. Two more Special Purpose Jumbojets also arrive, one each on June 26 and September 23, respectively. B-707-3J6B service to Bangkok is initiated on August 29.
Under charter to General Motors, 6 B-747SP-J6 flights are conducted in October between Beijing and Seattle. On November 15, one of the new SPs extends the Frankfurt route on to London.
It will be reported 15 years later that enplanements for the year are 3.42 million and 90,000 tons of freight are transported.
During the first week of 1981, the press notes that CAAC has upgraded its operations for the initiation of flights to America; among the improvements cited are new uniforms, in-flight movies, improved cuisine, and more courteous service.
Scheduled B-747SP-J6 passenger services between the U. S. and China are resumed on January 7, after a 32-year hiatus, when a B-747SP-J6 piloted by Xu Bai Ling, with 139 aboard, lands at San Francisco after a nonstop flight from Beijing. Passengers are welcomed by Mayor Dianne Feinstein and Chinese Consul General Hu Ding-yi. The aircraft continues on to New York.
The carrier now begins to launch or upgrade passenger and cargo service to 17 countries in Asia, Africa, Europe, and North America. Domestically, the route network grows to 171 services tying together 29 provinces. The fleet is increased by 2 Trident 3Es, 7 Trident 2Es, 5 B-737-2J6As, 1 B-707-3J6C, and 2 MD-80s. Direct Trident 2E round-trips are initiated between Kunming and Hong Kong on November 3.
Service from Shanghai and Beijing to Los Angeles begins on April 12, 1982.
En route from Guangzhou to Builin on April 26, Flight 3303, an HS 121 Trident 2E with 8 crew and 104 passengers crashes into Mt. Yangsu; there are no survivors.
In the spring, a B-737-200 demonstrator tours the country for 6 days, landing on occasion at difficult points such as the11,800-ft. high city of Lhasa in Tibet.
When five men attempt to commandeer Flight 2502, an Il-18, on July 25, they are attacked by both crew and passengers and the two would-be pirates are nearly bludgeoned to death. As later described by a group of New Jersey tourists aboard, one of the hijackers dropped a live hand grenade that exploded, blowing a hole in the fuselage and causing the aircraft to nearly crash during its Shanghai landing. After a trial, the five failed pirates are executed at Shanghai on August 18.
Orders are placed with Boeing on December 15 for 10 B-737-2T4As.
A passenger’s cigarette butt starts a fire aboard an Il-18B with 11 crew and 58 passengers as the Ilyushin is landing at Guangzhou on December 24; the aircraft is evacuated on the runway, but 25 passengers die and 28 others are injured in the process.
Built for Braniff International Airways but not accepted, a B-747SP-27 is sold on December 23 to CAAC instead.
As a result of the July hijacking attempt, the Chinese government assigns security guards to all company flights as of February 23, 1983.
After landing at Fuzhou on February 27, an HS 121 Trident 2E with 96 passengers overruns the runway and suffers the collapse of its nosegear; there are no fatalities.
Despite the new guards and because of inadequate airport policing, five men and a woman are able to smuggle two pistols aboard a Trident 2E with 105 aboard on May 5. They shoot two crew members while taking over the plane during a flight from Shenyang to Shanghai. The pirates demand to be flown to Taiwan, but the pilot flies over North Korean airspace, perhaps desiring to put down in friendly territory. The North Koreans put up a cloud of antiaircraft fire and force the plane to divert south, where it is allowed to land at a U. S. base northeast of Seoul, South Korea. The incident marks the first successful skyjacking of an aircraft from the People’s Republic.
CAAC Director Shen Tu and South Korean Deputy Foreign Minister Ro Myung meet in Seoul on May 7 to negotiate the return of the hijacked Trident 2E and prosecution of the six hijackers. Shen, the first Communist Chinese official to visit South Korea since 1953, is able to also sign the first official accord between the two nations, a document limited to the repatriation of the passengers, crew, and jetliner—but not the hijackers. A local court sentences the pirates on August 18 to prison terms ranging in length from four to six years; the Peoples Republic protests the leniency of the sentences. After a year, they will be released and sent to Taiwan.
A fourth B-747SP-J6, the one accepted in December because Braniff International Airways could not pay for it, is delivered on June 15. It will continue to wear its U. S. registration numbers for five-and-a-half years.
While taxiing onto the runway at Guilin and preparing for takeoff on a service to Beijing on September 14, an HS 121 Trident 2E with 6 crew and 100 passengers is struck on its starboard side by a taxiing military aircraft. The military plane rips a hole in the forward right side of the Trident’s fuselage (11 dead). This is the fourth incident since the previous April.
Two McDonnell Douglas MD-80s are sent to China as demonstrators on December 9 and are placed into a trial service with the Shanghai directorate.
A B-747-2J6B Combi (BC) is delivered on December 20 and it is reported that, despite very bad service, the airline earns $100 million in profits for the year. Still, the four accidents and safety incidents between April 1982 and September 1983 bring about concern for the airline’s operational management.
At the beginning of 1984, CAAC has only 15 commercial aircraft; these are primarily outmoded Soviet-built units.
A lone hijacker is overpowered when he attempts to hijack an An-24 on June 25 as it flies from Nanchang to Fuchou.
Also in June, CAAC service standards and safety are officially criticized for the first time.
In September and October, Gu Mu, the state councillor in charge of China’s modernization program, and CAAC Director General Shen Tu announce that the carrier is being restructured and that CAAC will cease to exist as an operational airline. The plan, which will be approved by the state council in December, calls for CAAC to remain as the administrative body for (initially) four new regional airlines, each with a different geographical name (e. g. China Southern Airlines Company, Ltd.), that will be phased in during the years ahead. In addition, the international routes will be placed into an autonomous unit to be known as Air China, and all utility work will be passed to China General Aviation Company.
Passenger enplanements for the year reach 3,942,000.
Throughout 1985, a total of 76 airliners of a wide variety of types are ordered via the China Aviation Supplies Corporation: 8 B-737-300s, 26 MD-82s, 5 B-767-2J6ERs, 5 B-757-2J6s, 1 B-747-2J6C, 3 Airbus Industrie A310-222s, 3 Tupolev Tu-154Ms, 5 B-707-3J6Cs, and 8 Short 360-300s. With 217 aircraft already on hand, CAAC ranks 6th among world airlines in terms of fleet size.
The year starts out badly with another fatal accident. While performing a missed approach in fog and rain at Jinan on January 18, an An-24B with 7 crew and 34 passengers crashes near the airport (38 dead).
Also in January, Xinhau reports the State Council’s December decision to split up CAAC and indicates that there may be as many as six independent airlines. Twenty-seven routes are added during the year, including 7 domestic and 20 to such international destinations as Kuwait and Singapore.
On April 1,57-year-old Hu Yizhou succeeds Shen Tu as director general and, on April 15, after 6 years of negotiations, an $800 arrangement is made with McDonnell Douglas for the purchase of 28 MD-82s. All but one of the aircraft will be assembled at a plant in Shanghai from parts supplied by the manufacturer from Long Beach.
In May, 5 B-707-3J6Cs are delivered. A B-747-243B, previously flown by Alitalia, S. p.A., enters service on May 20 on a six-month lease from Boeing. According to CAAC CEO Hu Yizhou in June, only four other independent airlines will be created aside from the CAAC-controlled international unit. Also in June, the first two A310-222s enter service and a memorandum of understanding for a two-phase technical cooperation project is signed with Deutsche Lufthansa, A. G. Phase 1 begins on July 1 as German airline executives provide advice on improvements to the Chinese airline’s workshops. Later Phase 2 will emphasize maintenance assistance. The first Shorts 360-300s arrive during the month and begin flying from Shanghai.
In early August, one-hour $55 helicopter tours are initiated to the Great Wall and Ming Tombs. At the same time, 4 more Shorts 360-300s are delivered and begin operations from Wuhan. En route from Canton with 89 aboard on August 30, a Trident 2E crashes while landing at Hong Kong (6 dead). In September, an agreement is signed with Qantas Airways (Pty.), Ltd. for maintenance of the carrier’s B-747s, B-767s, and B-707s.
Another aircraft, carrying 46 workers being rewarded for recent good performances, crashes into a hotel in Linfen on October 7 (42 dead). A Shorts 360-100 is damaged beyond repair as the result of a bad landing at Enshi on October 22; there are no fatalities.
Equipped with a B-737-2J6A, the former Xinjiang Province division, based at Urumqui, inaugurates service in November as Xinjiang Airlines Company, Ltd., the first of the new regional carriers. Another regional, Yunnan Airlines of China, Ltd., based at Kunming and named for its province, receives a B-737-2J6A in December.
Passenger boardings soar 46% to 7.3 million and freight traffic rises 33.4% to 403 million FTKs.
For the Chinese New Year holiday the first week of February 1986, 108 additional flights are made to Hong Kong. The staff now totals approximately 50,000 and the company continues to operate three training colleges for the education of future personnel. There are more than 90 civilian airports in the country, including 8 that can accommodate Jumbojets and 32 large enough to take B-737-2J6As. Early in the year, passenger services are inaugurated with the first commercial aircraft developed and built in China, the Xian Y-7-100.
Operated by the Wuhan municipal authorities, the regional Wuhan Airlines Company, Ltd. inaugurates services in May to Hubei, Hunan, Guangdong, and Sichuan provinces. Some $850 million in orders are placed in June for 4 (later 5) Jumbojets (2 Dash-2J6BCs and 3 Dash-4J6Bs), 4 B-767-2J6s, and 2 A310-300s.
The fleet now comprises 410 aircraft, including 300 small Soviet machines and as of October, the first of 10 BAe 146-100s to be delivered. China Southwest Airlines Company, Ltd., based in Sichuan Province, is the only one of the regional carriers, other than Xinjiang and Wuhan, which appears close to start-up, although Shanghai Airlines Company, Ltd., with 5 B-707-320Cs, announces plans for services to Beijing and Guangzhou by year’s end.
Just after takeoff from Lanzhou on December 15, an An-24RV with 7 crew and 37 passengers develops engine problems in its No. 2 power plant due to severe icing. The aircraft attempts to return to its point of origin, but crashes en route (6 dead).
Customer bookings jump 33% to 10 million and cargo accelerates 21.4% to 489.82 million FTKs.
The giant carrier, which is soon to begin de-emphasizing its CNAC-2 flying operations in favor of the regional airlines it will regulate, opens 22 new domestic markets and 17 international services in 1987, bringing the system to 318 routes, including 35 international segments. Among the first of these is a new B-747SP run from Beijing to Melbourne via Guangzhou and Sydney, which replaces service formerly operated (minus the Guangzhou stop) by Qantas Airways (Pty.), Ltd. Overall, more than 229,000 km. of domestic air routes are operated, along with some 94,000 international km. Orders remain outstanding for 3 B-747-400s, 2 B-767-200ERs, 40 Y-7-100s, 6 BAe 146-100s, 5 MD-82s, and 2 A310-300s. However, 2 new B-747-2J6BCs enter service, 1 each on March 28 and December 10.
Three new regional carriers are launched, including China Northeast Airlines Company, Ltd. at Shenyang, in Liaoning Province, near North Korea, China Northwest Airlines Company, Ltd. in Shaanxi Province, and China Southern Airlines Company, Ltd. based at Guangzhou in Guangdon Province, not far from Hong Kong.
Currently, CAAC maintains working relations with some 386 foreign airline companies and the Chinese government has bilateral air service agreements with over 40 countries. Under terms of its February pact with East Germany, an Interflug DDR Airlines Il-62 initiates weekly service on May 1 between East Berlin’s Schoenfeld Airport and Beijing; the 8,100-km. flight, completed via Moscow, requires 9 hrs. 50 min. The route is the shortest link between China and Europe, being 2,000 km. less than services operated by Air France and other carriers.
The first MD-82 assembled in China is delivered in July and it is announced that it is assigned to the China Northeast Airlines Company, Ltd. China Eastern Airlines Company, Ltd. receives 2 Airbus
Industrie A310-300s in July-August. In cooperation with Royal Nepal Airlines, Ltd., weekly charter service is inaugurated in September between Lhasa and Kathmandu.
The international division launches Beijing-Vancouver via Shanghai B-747-2J6BC flights in October. Three B-757-221Bs are accepted by CAAC in November and are handed over to China Southern Airlines Company, Ltd.
Passenger boardings rise 28% to 12,800,000 and 647.49 million FTKs are flown. Revenues advance 45% and operating income is up 53.6%, although the airline fails to reveal exact monetary figures; an after-tax profit of $263 million is declared.
Organization and promotion of the regional airlines continues apace in 1988.
While on initial approach to Chongquing on January 18, an Il-18D with 10 crew and 98 passengers literally loses its No. 4 engine; the resulting vibration causes the plane’s pilot to lose control of the Ilyushin and crash. There are no survivors.
Employing a B-707 leased from CAAC, Royal Nepal Airlines, Ltd. is able to begin participation in the shared charter service the two airlines have between Lhasa and Kathmandu. The service will be operated annually from April through October, although the Nepalese will substitute a B-727-100.
In May, a B-707-3J6B is hijacked to Taiwan. In early June, CAAC indicates that it will soon be primarily a regulatory body and airport authority. The regional carrier China Eastern Airlines Company, Ltd. is established on June 25.
On July 1, the Beijing-based international division is renamed Air China International Corporation. CAAC Deputy Administrator Xu Bai Ling, who headed the former division, is named president as the CAAC continues to divest itself of its actual airline operations. His fleet is immediately equipped with all 4 B-747SP-J6s.
While landing at Kai Tak Airport at Hong Kong on August 31 after a service from Guangzhou, a HS 121 Trident 2E with 11 crew and 78 passengers strikes approach lights and suffers the collapse of its right main landing gear. The aircraft veers off the side of the runway and into Kowloon Bay (7 dead).
Later in the month, an Il-14 with 46 passengers aboard crashes into a hotel at Linfen, Shaanxi Province, while on a sight-seeing flight (42 dead).
In December, the second indigenous MD-82 goes to China Eastern Airlines Company, Ltd.
Revenue passenger kilometers flown increase by 37.5% to 25.6 billion as enplanements total 21.4 million. Freight traffic also accelerates upward by 13.9% to 731.83 million FTKs. The year’s profit is officially put at $269 million.
Beginning in 1989, CAAC no longer regularly flies operations or reports traffic statistics, leaving these matters to be largely managed by Air China International Corporation and the regionals. It does, however, act as a central purchasing agent for aircraft as well as a regulatory body, controlling the allocation of route in a manner similar to that practiced by the old U. S. CAB. Although the exact impact of this political disaster on Chinese airline traffic figures is not revealed, by all informed reports, it is significant.
Demonstrations occur in Beijing between May 4 and June 4. On the latter date, soldiers sweep through protestors in Tiananmen Square, dispersing the crowds at a dreadful cost in lives.
While on its takeoff roll from Honggalae Airport at Shanghai on August 15, an An-24 with 40 aboard overruns the runway and plunges into the river (34 dead). The first 2 B-747-4J6s arrive during the year.
Flights continue in 1990. During the year, CAAC authorizes the undertaking of a five-year experimental program by China Southwest Airlines Company, Ltd. to provide airlift for the Chinese Air Force from Chengdu to the capital of the Tibet Autonomous Region.
China’s worst-ever air disaster occurs on October 2 when a hijacked Xiamen Airlines Company, Ltd. B-737-247A crashes into aircraft from China Southwest Airlines Company, Ltd. and China Southern Airlines Company, Ltd. while landing at Canton (131 dead).
Director General Hu Yizhou is succeeded in April 1991 by Jiangxi Province Communist Party Secretary Jiang Zhuping. A large number of independent air carriers have now been established in the nation, most being owned by large manufacturers, municipal, or provincial governments. All report to the CAAC, which continues to allocate routes and order aircraft. In a statement that will be recanted, Director General Zhuping announces in November that the new carriers will be open to private and foreign investment.
In 1992, all of the surviving Il-18s are transferred to China United Airlines. In June, a new agreement is signed with McDonnell Douglas for the production of 40 additional MD-82s. When Airbus Industrie sells Dassault Mirage jet fighters to Taiwan, it incurs the wrath of the PRC government and damages, at least temporarily, its prospects for sale to China of its Airbus jetliners.
Late in the year, four airliners (covered under their company profiles) are destroyed in crashes (276 dead). During the year, $340 million is spent on new “fixed assets,” including construction and ATC radar. Six new airports have been opened since January.
Enplanements increase 31.7% to 28.68 million.
In 1993, the three largest ex-CAAC divisions-now-airlines (Air China International Corporation, China Southern Airlines Company, Ltd., and China Eastern Airlines Company, Ltd.) are granted the status of autonomous, indeed independent, “aviation groups.” The three are given responsibility for their own aircraft acquisitions and finances, and are allowed to float shares on the new Chinese stock exchanges. In March, CAAC announces tightened regulations for new entrants and sets minimum levels for working capital and experienced management, maintenance, and ground-support staff.
On behalf of the nonindependents, the central organization takes delivery of 71 aircraft during the year and begins to operate the aviation college outside Chengdu in Sichuan Province. Through April, Boeing has delivered 125 aircraft since President Nixon’s visit in 1972.
On June 3, Hong Kong Aircraft Engineering (HAECO) and Cathay Pacific Airways (Pty.), Ltd. agree to establish a maintenance outfit with local authorities in Xiamen.
A report by John Bailey in the June 23 issue of Flight International indicates that there are now some 35 airlines in service in China and that CAAC influence with them is rapidly disappearing. Still, poor safety records require CAAC to begin blocking marginal airlines from acquiring new aircraft, a rule soon extended to all PRC airlines. The move is supported by the big American manufacturers Boeing and McDonnell Douglas, as well as Airbus Industrie in France.
New airports are opened during the year at Wuhan, Kunming, Lhasa, and Dayong.
Charged with lax safety standards that have resulted in crashes and 10 hijackings within the past year, Director General Jiang Zhuping is demoted to deputy director in January 1994. Zhuping is succeeded by Chen Guanyi, a member of the Communist Party Central Committee, whose new post is now elevated to government cabinet level. In April, the airline regulatory leadership lets it be known that foreign investment will be sought in an effort to maintain a growth rate of 13% for its carriers and for an upgrade of infrastructure (airports and ATC). Meanwhile, Director General Guanyi launches a campaign to improve passenger service standards at the companies.
CAAC is able to effect a major reform in air traffic management in May when it is allowed to take over ATC responsibility from the military for the routes linking Beijing with Shenzhen and Guangzhou. These busiest routes are returned to civilian oversight after more than 40 years. Meanwhile, CAAC begins to compile the CCARS (China Civil Aviation Regulations) modeled on the Federal Aviation Regulations of the U. S. Federal Aviation Administration.
In September, the dormant China National Aviation Corporation (CNAC-2) division, named in honor of the famous pre-revolution carrier established with the help of Pan American Airways (PAA), is reactivated and takes majority 51% interest in Air Macau, S. A., the first airline to operate from the Portuguese enclave in modern times.
Enplanements encompassing all airlines in China total 37,344,191. Since 1980, total passenger volume has increased 12-fold to 78 million passengers flown (including those served by private and foreign carriers).
CAAC joins with Rosaero Navigatsia of Russia on January 4, 1995 to authorize a new air route from North America via Siberia to China. In March, China National Aviation Corporation (CNAC-2) announces that it will begin a rival airline in Hong Kong before the British colony is handed back to the PRC in 1998.
During the last week of April, CNAC-2 applies for a scheduled license to operate service into Hong Kong as a complement to the charter flights into Kai Tak already made with aircraft leased from China Southwest Airlines Company, Ltd. The PRC move is bitterly opposed by Cathay Pacific Airways (Pty.), Ltd., even though CNAC-2 is a 10% shareholder in Cathay.
The five-year experimental airlift program by China Southwest Airlines Company, Ltd. 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 National Aviation Corporation (CNAC-2) 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 outbound customers traveling via Hong Kong on a China Airlines, Ltd. (CAL) connection.
During the year, the agency continues to aggressively improve the PRC aviation infrastructure. Hundreds of airport facilities are improved, with special attention paid to the 40 airports from which 95% of the carrier’s domestic and international departures are made. Zhuhai Airport and the airport at Macau, the Portuguese enclave, are opened as the fourth and fifth airports in the Pearl River Delta.
As part of a new Five-Year Plan, several new procedures come out of the 14th Meeting of the Chinese Communist Party in October. As soon as Macau Airport is ready in November, Air Macau, S. A., the indirect CAAC subsidiary, launches service. China Northern Airlines Company, Ltd. and China Northwest Airlines Company, Ltd. begin services to the facility on December 8.
Also in December, discussions on a proposed $144.4-million joint venture with Cathay Pacific Airways (Pty.), Ltd. for the joint operation of a new airport at Xiamen are dropped.
A new bilateral air agreement between China and the U. S. is signed on December 24; under its terms, China Southern Airlines Company, Ltd. will be able to begin transpacific service the following year.
Once again, CAAC, acting as something of a clearinghouse, reports annual traffic figures to ICAO for all of the country’s airlines. These show passenger bookings ahead by 27% to 51,156,426. Freight carriage increased 20.2% to 2.16 billion FTKs. It will also be noted that the Boeing concern has trained over 1,000 Chinese pilots and maintenance personnel at its Seattle facilities during the past two years. In addition, the nation’s airlines have recorded 1.2 million accident-free hours of flight time.
Implementation of the nation’s ninth Five-Year Plan begins in January 1996. CAAC now begins to relax its two-year ban on aircraft purchases and begins to phase in a new “down to Earth effort” designed to withhold new aircraft from those carriers with poor business management practices or safety records. Under these new rules, plans are made for the acquisition of 240 new airliners by the year 2000.
During the second week of the month, approval is given to Flight-Safety International for construction of a flight training center near Kunming. At month’s end, officials inform the Orient Airline Association that it will not support the applications for membership of its three largest airlines, China Southern Airlines Company, Ltd., China Eastern Airlines Company, Ltd., and Air China International Corporation. Rather, they insist that China National Aviation Corporation (CNAC-2) be the first admitted.
The PRC expands its stake in Hong Kong’s major airlines during the last week of April. Under a stock offering arrangement worked out between Swire Pacific (Pty.), Ltd. and China’s foreign investment firm Citic Pacific, Swire sells out its majority stake in Cathay, while retaining its management contract. It also turns over 35% controlling interest in Dragonair (Pty.), Ltd., along with the right for the Chinese to appoint their own management team.
Citic Pacific, on its part, will acquire 572.9 million shares of Cathay stock for HK$6.3 billion ($815 million) and advance its shareholding from 10% to 25%. Meanwhile, China National Aviation Corporation (CNAC-2)’s stake shrinks from 10% to 8%, public shareholding falls from 27.40% to 23.10%, and the 52.60% holding of Cathay Pacific is reduced to 43.9%. The infusion from the stock offering is almost twice what is needed by Cathay to cover the costs of the new headquarters and training center it is building at Chek Lap Kok Airport, which is due to open in April 1998.
At the same time, Cathay loses its control of Dragonair (Pty.), Ltd. Under the same agreement, China National Aviation Corporation (CNAC-2) takes over with a 35.86% majority stake. For this, the CAAC unit pays HK$1.97 billion ($254.8 million), including HK$971.1 million ($125.6 million) each to Swire Pacific and Citic Pacific and $4 million to the founding Chao Family. Swire Pacific’s stake drops from 43.16% to 25.50%, that of Citic Pacific falls from 46.15% to 28.50%, that of the Chao Family from 5.57% to 5.02%; public interest of 5.12% remains unchanged.
During the first week of July, CAAC-2 announces that it will expend $700 million on air navigation aids over the next five years. The announcement comes as a Raytheon AutoTrac ATC system is turned on by the North China Regional Administration at Beijing; it will be followed by installations at Taiyuan, Kunming, Nanchang, Xian, Zhuhai, and Zhengzhou.
Also during the summer, the Taikoo (Xiamen) Aircraft Maintenance concern, built by local investors in association with Hong Kong Aircraft Engineering (HAECO) and Cathay Pacific Airways (Pty.), Ltd. opens at Xiamen.
The China Women's News is chosen to announce on August 21 that CAAC is implementing new security rules. Passengers stealing luggage, aircraft fittings, or life vests, smoking in nonsmoking areas, sneaking dangerous goods through safety checks, or getting drunk and fighting with other passengers will be severely punished.
During September, Beijing’s Capital International Airport becomes the first in the PRC to seek membership (which will be approved two months later) in the Airports Council International. During the month, CAAC announces that it has spent $2.2 billion over the past five years making upgrades at 44 airports and authorizes Shanghai officials to begin building the new Pudong International Airport.
CNAC-2 takes over Hangzhou-based Zhejiang Airlines Company, Ltd. in mid-October for an undisclosed sum.
China’s first international air show, “Airshow China ’96,” is hosted at Zhuhai Airport, 30 miles west of Hong Kong, from November 5-10. Every CAAC subsidiary, including airlines, airports, training, ATC, and maintenance units, have an exhibition in CAAC’s large pavilion.
At year’s end, a total of 27 CAAC-approved airlines are in operation, although only six are fiscally viable. Between them, Air China International Corporation, China Eastern Airlines Company, Ltd., China Northern Airlines Company, Ltd., China Northwest Airlines Company, Ltd., China Southern Airlines Company, Ltd., and China Southwest Airlines Company, Ltd. are responsible for 82% of the revenue transport kilometers flown by Chinese carriers.
Following the completion of a review by a joint team from CAAC and the U. S. FAA, it is announced in March 1997 that the Chinese body meets all requirements of international safety oversight standards, but will require additional resources if it is to monitor the safety aspects of its various air carriers.
A Shenzhen Airlines Company, Ltd. B-737-300 crashes while landing at Shenzhen on May 8 (35 dead). Although the accident is the 15th major PRC incident within the past decade, it is the first since CAAC began a safety crackdown 3 years ago. Also during the month, a $1.5-billion order is placed with Airbus Industrie for 20 A321s and 10 A320s.
It is reported that, by June, CAAC has established 62 jointly funded or cooperative ventures involving contracted foreign investments of some $500 million. Total investment in civil aviation projects over the past decade now tops $15 billion.
On July 1, CAAC authorizes an adjustment in ticket prices for the country’s domestic routes and airlines. Henceforth, PRC citizens and foreigners will both be charged the same tariff. The move, brought about by Beijing’s desire to join the World Trade Organization, is widely heralded in air transport and travel circles. The same day, the British hand Hong Kong back to PRC control and China National Aviation Corporation (CNAC-2) assumes final management control of Dragonair (Pty.), Ltd.
For the third straight time, the Shanghai based company China Eastern Airlines Company, Ltd. is cited by air passengers as the best among large Chinese airlines which carry more than six million passengers annually. The survey, which has been conducted for three consecutive years, sent out a total of 1.33 million questionnaires to solicit passenger opinion on the service quality of 25 airports and 16 major Chinese airlines. Other winners announced on July 17 are Xiamen Airlines Company, Ltd. and Shenzhen Airlines Company, Ltd., which each win first place in separate contests for the annual passenger volume exceeding two million and less than two million.
In mid-July, $2.4 billion is authorized for the construction of a new airport at Guangzhou; on July 21, China Southern Airlines Company, Ltd. becomes the first carrier to operate a twin-engine jetliner, its B-777-21B IGW, on a transpacific service flying from Guangzhou to Los Angeles in 14 hours.
In the first joint decision since CNAC-2 obtained final management control a month earlier, officials from that PRC regional and Dragonair (Pty.), Ltd. announce during the first week of August that they will jointly construct a $6.9-million office building at Hong Kong’s new Chek Lap Kok Airport. Pains are taken to assure the world that CNAC-2 will not take over Cathay Pacific Airways (Pty.), Ltd.; however, CNAC-2 Vice President Zhang Xianlin does note that the possibility exists of leveraging its 35.86% interest Dragonair (Pty.), Ltd. via a listing on the Hong Kong stock exchange.
In line with Chinese government policy designed to reduce the number of regional airlines in order to increase the efficiency of competition, six carriers are encouraged in September to form the New Star Alliance. When activated the following January 1, the informal compact between China Hainan Airlines Company, Ltd., Shenzhen Airlines Company, Ltd., Shandong Airlines Company, Ltd., Sichuan Airlines Company, Ltd., Wuhan Airlines Company, Ltd., and Zhongyuan Airlines Company, Ltd. will hopefully begin to boost the quality of its members’ services via integrated passenger and marketing services and code-sharing on selected routes.
Also during the month, CNAC-2 receives government approval to go public in Hong Kong.
CAAC and its regional subsidiaries all sponsor exhibits at the “Air-show China ’97” held at Beijing from October 8-12. CAAC employs the gathering to unveil its new Raytheon ATC system at Beijing Capital Airport.
U. S. President Bill Clinton announces, on October 29, that China will sign a letter of intent for the purchase of 20 Boeing jetliners, valued at $1.1 billion. On the eve of his visit to the U. S., President Jiang Zemin, the next day, announces another $1-billion request for 30 B-737s. Orders and options within two days thus come to $3 billion, atop the $1.5-billion order placed with Airbus Industrie in May.
Also during the month, China National Aviation Corporation (CNAC-2) plans to make a 30% initial public offering (IPO) on the Hong Kong Stock Exchange. Shareholding will be sold in Dragonair (Pty.), Ltd., Jarine Air Services, and a property investment company on the island.
The crash of regional stock markets at the end of the month forces CNAC-2 to postpone its 30% IPO, which it had hoped to start trading in Hong Kong markets at the beginning of November.
It is announced in November that all Chinese cabin crews must be proficient in English by the end of 1998.
Lead manager Peregrine Capital, Ltd. is able to work around the Hong Kong economic problem and launch the IPO in early December. It is oversubscribed 17 times and raises HK$613 million (US$79 million).
At year’s end, Director General Chen Guangyi’s ministry continues to operate the domestic subsidiaries Air China International Corporation and Management Information System of CAAC, plus the domestic division known as the CAAC Flying College. Having witnessed the success of the CNAC-2 stock offering, the government now allows Beijing Capital Airport, Shenzhen Huangtian Airport, Shanghai Hongqiao Airport, Guangzhou White Cloud Airport, and Xian Airport to begin planning for their own domestic stock market listings.
CAAC now oversees the operations of 43 airlines, with a combined fleet of 760 aircraft. Although exact figures are not released, it is estimated that the top 11 carriers have lost $199 million this year. Load factors on domestic routes have averaged only 68.8%, down from 75.9% just two years earlier. China National Aviation Corporation (CNAC-2) generates a profit of HK$401 million.
In February 1998, CAAC imposes fines of up to 700,000 yuan ($84,000) on eight aviation firms for their poor safety records in 1997. China Eastern Airlines Company, Ltd. is, however, singled out for praise.
Also during the first quarter, the regulatory body 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 Airlines Company, Ltd.; that China Southwest Airlines Company, Ltd. will be acquired by China Eastern Airlines Company, Ltd.; and that Changan Airlines Company, Ltd. will become part of China Northwest Airlines Company, Ltd.
On March 1, CAAC authorizes its 10 international carriers to begin flying on July 1 over 18 new routes to Japan, the Philippines, North Korea, Macau, Malaysia, and Mongolia. The expansion will give the airlines a total of 124 international destinations.
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 now steps in and requests that domestic companies delay new aircraft deliveries. Some will lease out or park their latest additions.
During the summer China National Aviation Corporation (CNAC-2) opens a Chinese-language homepage on the World Wide Web, http:// Www. zjair/com.
China and Great Britain sign a memorandum of understanding on civil aviation on October 7; British Prime Minister Tony Blair attends the signing ceremony at Beijing on October 7.
It is reported on November 1 that, due to the Asian economic “flu,” slower national economic growth, and fare discounting, China’s airlines have collectively lost $120 million during the first half of the year. Stressing that existing formal orders are not affected, CAAC now freezes all new orders by the country’s air carriers.
“Airshow China ’98” is again hosted at Zhuhai Airport, east of Hong Kong, from November 17-23. Every CAAC subsidiary, including airlines, airports, training, ATC, and maintenance units, have an exhibition in CAAC’s large pavilion. Boeing introduces its new B-717-200 to potential customers.
Led by Deputy Assistant Secretary David Marchick, a U. S. DOT delegation visits with officials of CAAC in Beijing on December 4 to urge the PRC to expand its air services to the U. S.
World History
