Beijing is considering raising the ceiling for foreign investment in the nation's aviation industry and encouraging overseas participation in airport management, according to a senior official. Xia Xinghua, director-general at CAAC's department of restructuring, regulation and enterprise supervision, said Beijing was considering whether to raise the ceiling for foreign investment from 35 per cent as part of efforts to reform the airline industry. Last month, Beijing threw open the doors to foreign investment in aviation, with investment sought for a 100 billion yuan (about HK$93 billion) expansion and modernisation programme. Detailed measures on the size of the possible increase in the ceiling could be released as early as this year, Mr Xia told a meeting at the World Economic Forum's China Business Summit being held in Beijing. He declined to give further details except to say that the government was treating the matter as one for serious discussion. Aviation analysts yesterday speculated that the ceiling for foreign investment in mainland airlines could be increased to more than 40 per cent. They said the move would provide further incentives to foreign investors to buy into domestic airlines. It could pave the way for foreign investors to be involved in management of mainland carriers in the long term, they said. Along with the telecommunications industry, the government considers airlines and airports to be sensitive sectors over which it has maintained an absolute majority control. However, analysts said Beijing needed foreign capital and management expertise to reform its carriers and airports to bring them up to international standards. Official figures have shown that among a total of 34 carriers, only a few were profitable. So far, only China Eastern Airlines, China Southern Airlines, and CNAC have been allowed to float overseas while regional carrier Hainan Airlines has been allowed to sell a 25 per cent stake to an investment fund controlled by George Soros. Mr Xia said more carriers and domestic airport operators would be listed on the international and domestic stock markets in the future. He said Air China, China Aviation Fuel Supply Corp and the Beijing Capital Airport were being restructured into shareholding companies to prepare for stock market flotations. CAAC would also revise the existing regulations later this year to allow foreign investors a part in high-level management of airports. He said the aviation industry would continue to see double-digit growth rates past 2000. Overall turnover is expected to rise to 14 billion tonne-kilometres by 2000 from 8.67 billion tonne-kms, while passenger traffic will rise to 100 million from 56.3 million last year.