By staff reporter Zhang Na

From Caijing Online

(Caijing.com.cn) The civil aviation sector, including airlines and airports, booked a combined profit of 40 million yuan in January as domestic passenger traffic grew, although international traffic slackened, the civil aviation regulator said.

Li Jiaxiang, director of the Civil Aviation Administration of China (CAAC), told Caijing that passenger traffic on domestic routes rose 21 percent and 13.5 percent in January and February, respectively. 

But on international routes, cargo and passenger traffic fell in the first two months, he added, without providing figures. 

The overall industry profit signals a possible turnaround from a 2008 loss of 28.2 billion yuan, prompting the regulator to cut taxes and boost investment in infrastructure.

Li said that as a result of the industry-wide downturn, “the CAAC encourages mergers and acquisitions among airlines, which will improve the competitiveness of the civil aviation sector.”

He did not speak of any specific merger candidates, but China Eastern Airlines and Shanghai Airlines have long been the center of speculation for a possible merger sponsored by the Shanghai government.

Meanwhile, flagship carrier Air China said last month that it is in talks to acquire privately-owned East Star Airlines

Full article in Chinese: http://www.caijing.com.cn/2009-03-05/110113200.html