Air China profits double, but pilots unhappy

29 April, 2008:

China's aviation sector is booming. Thanks to the country’s economic growth and rising wealth, airlines in China flew 185 million passengers in 2007 – up by 34% from two years earlier. And, this comes to about one-fourth of the air-passenger traffic in the United States.

China's economy, which slowed but still grew 10.6% in the first quarter, has made business trips and holiday travels by air affordable to more residents.

The first-quarter profits of Air China Limited, China’s biggest international airline, soared by 147%, the nation’s official news agency Xinhua has reported.

The Beijing-based Air China’s net income rose to 1.04 billion yuan (US $149 million) in the first three months ended on March 31, 2008.

The first-quarter profits of Southern Airlines Company, China’s largest carrier by fleet, jumped by 523% to 796 million yuan.

Meanwhile, Chinese carriers are buying hundreds of new aircraft but are struggling to find people to fly them, according to a report in the Los Angeles Times.

Tian Baohua, president of Beijing-based Civil Aviation Management Institute of China said,“The current situation is, you need all the pilots to fly to meet the demand.”

What worries the Chinese authorities most is that the shortage of pilots has occurred as China is hosting the Olympic Games in Beijing in August 2008, where about two
million visitors are expected.

Even though China’s aviation safety record in recent years has not been bad, a few incidents that happened recently have made fliers nervous.

Recently, of the 18 flights of the state-owned China Eastern airline that took off from Kunming airport in southern China, some turned around in midair. Others reached their destinations. However, they flew back to Kunming without letting their passengers disembark.

Investigators concluded that the weather was not to blame, but it was “a collective act of defiance by pilots unhappy about their pay, gruelling schedules and lack of rest as well as lifetime contracts that they can break only by paying a fortune.”

China Eastern is one of the nation’s big three carriers, along with Air China and China Southern.

The Shanghai-based China Eastern carried 39 million passengers in 2007. The debt-laden China Eastern – the only carrier with direct service from Los Angeles to Shanghai – has come under fire for poor management and employee relations.

Regulations in China stipulate that airlines are supposed to give pilots two consecutive days of rest a week. But, pilots say that they are made to work six days a week without any time off, leading to fatigue.

In addition, airlines, which do not want their investments to suffer, are demanding that pilots pay as much as $1 million to leave.

Some private Chinese airlines have recruited foreign pilots, paying $8,000 to $12,000 a month. Pilots working for state-owned airlines complain that those hired by private airlines work far fewer hours and enjoy benefits such as a housing allowance that Chinese pilots can only dream about.