The restructuring of the Chinese airline industry into three major groups is almost complete, according to the General Administration of Civil Aviation of China (CAAC).

According to the agreement by the CAAC and its affiliated companies, the three major airline groups to be formed include Air China, China Eastern and China Southern.

An Air China spokesman said the regrouping procedure was well under way and would not be thrown off course.

A senior official with China Southern Airlines said regrouping would be complete by the end of June. China Eastern Airlines showed the same firm confidence.

China Eastern and Wuhan airlines have reached an agreement: China Eastern Airlines owns a 40 percent shares of Wuhan Airlines while Wuhan Airlines was renamed China Eastern Wuhan Branch.

In March, Shangdong Airline Group came into being with 10 joint- venture holding companies under it.

For many years, the regrouping has been an issue of concern in Chinese aviation sector. Experts pointed out that it was an important step for Chinese aviation sector to survive and develop.

Regrouping did not simply mean expanding, but also decreasing with redundancies and cost-cutting, said Zhang Baojian, chief representative of the International Air Transport Association in China.

China will cut 24 local civil aviation bureaus, and keep seven regional administrations such as the northwest and northeast. China will also readjust the flights in order to foster reasonable and moderate competition in the market.

( China Daily May 2, 2002)