Guangzhou-based China Southern Airlines Co Ltd, one of the top three airlines in China, yesterday opened a Beijing branch.

Among its 18 branches and sub-branches, the Beijing office is China Southern's largest and most important.

"The foundation of the Beijing branch is crucial for China Southern's sustained development," said Liu Shaoyong, chairman of China Southern, in an interview yesterday.

"Now China Southern has merged with China Northern Airlines and Xinjiang Airlines, Beijing is an ideal hub to link the airline markets in Central South and Northwest China, as well as with international routes," he explained.

He said that China Southern will invest 1.09 billion yuan (US$134 million) in the construction of the Beijing base, giving it two hubs. This includes money spent on a terminal building at the airport.

According to Si Xianmin, general manager of China Southern, the establishment of the Beijing branch will make air travel more convenient for passengers in Beijing.

He said that China Southern will use Airbus A380 aircraft and Boeing 787 Dreamliners, which it recently ordered. They will be available in late 2007.

Si said that China Southern had high hopes that the Beijing branch would make the best out of the booming air travel market from the capital, as well as tap potential business related to the 2008 Beijing Olympic Games.

Official statistics indicate that Beijing Capital International Airport handled 34.86 million passengers in 2004, an average growth of 13.4 per cent a year since 1990.

The number of passengers handled by the Beijing airport last year was second only to Shanghai, which had 35.96 million passengers.

It was much higher than Guangzhou, which recorded 20.32 million passengers.

International passengers that passed through Beijing last year totaled about 10 million, topping all other airports in China.

The figure represented 31.1 per cent of all international passengers handled by the nation's airports.

An industrial insider, who refused to be identified, told China Daily that the establishment of the Beijing office will allow China Southern to get more flight rights.

"With a base in Beijing, China Southern might apply for international direct flights from Beijing," the insider said. "Without it, Beijing would be no more than a stopover for China Southern."

China Southern set up its Beijing representative office in 1989. It linked up with Beijing Capital International Airport to set up a ground service joint venture in 2003.

And it put into operation a terminal building last year, making it China's first and only airline company to own a terminal building of its own.

China Southern operates 43 flight routes from Beijing. It is expected to handle 9 million passengers to and from Beijing this year, and have a business turnover of 4 billion yuan (US$493.22 million), accounting for about 10 per cent of its total.

(China Daily December 20, 2005)