China Southern Airlines

China Southern flies to Henan Airlines' rescue

PUBLISHED : Tuesday, 25 September, 2012, 12:00am
UPDATED : Tuesday, 25 September, 2012, 4:30am

China Southern Airlines has come to the rescue of Henan Airlines, which was banned from flying after one of its planes crashed in Yichun, Heilongjiang, in 2010, killing more than 40 people.

China Southern and Henan Aviation Investment, a company set up for the restructuring of Henan Air, yesterday agreed to form a 6 billion yuan (HK$7.34 billion) joint venture in which China Southern will hold 60 per cent.

The joint venture will clear the way for the relaunch of Henan Air, which is now owned by the Henan government and Shenzhen Airlines.

An investigation by the Civil Aviation Administration of China found that the crash was caused by pilot error and loopholes in the airline's safety management.

Separately, Cathay Pacific Airways announced plans yesterday to upgrade regional business class seats after its passenger yields came under pressure amid fierce competition and falling demand for business travel.

The new seat is wider, can recline further, and is designed to lure back business travellers who traded down to economy class.

"The passenger yield was down 5 to 6 per cent in the first eight months because of the decline in ticket prices and trading down," Cathay's chief operating officer, Ivan Chu, said yesterday.

In the first half, Cathay's passenger yield - the average fare paid per passenger, per mile - rose 1.2 per cent year on year to 66.1 HK cents.

The carrier will retrofit 29 Boeing 777s and Airbus 330s with the new seat over 18 months from January.

Cathay and Hong Kong Aircraft Engineering also announced they had entered into a HK$300 million agreement to form an inventory technical management services company.