THE TIMES OF INDIA

FRIDAY, AUGUST 15, 2003

Germany's Fraport, Shanghai airport to set up JV

REUTERS

SHANGHAI: Shanghai Airport Authority will set up a joint venture with
Frankfurt airport operator Fraport AG, a spokesman for the Chinese company
said on Thursday in another step towards opening China's aviation market.

The 50-50 joint venture, with total investment of 200,000 euros ($226,200),
will provide airport consulting and training services and be set up by the
end of the year, a source close to the deal said.

Though the investment is small, it is significant as China begins to lift
restrictions on foreign and domestic investment in aviation infrastructure.

It is luring money into airports as it searches for ways to to pay for an
ambitious industry overhaul and expansion.

"We have already signed a letter of intent to set up a joint venture company
with Fraport," Shanghai airport spokesman Huang Guangyi told reporters,
declining to provide further details. Fraport officials were not immediately
available for comment. Frankfurt airport is continental Europe's biggest
airport in terms of passengers and freight.

The German airport company said in December it would enter a cooperation
agreement with Shanghai's Pudong International Airport to exchange "know
how" with one of China's busiest aviation hubs, but few details were
provided at the time.

In February Hong Kong conglomerate Swire Pacific Ltd and a unit of China
Eastern Airlines Corp Ltd agreed to invest $30 million in a 50-50 venture to
invest in airport management and services in China.

Shanghai's airports have already bounced back from the impact of SARS, which
kept passengers from travelling and forced airlines to ground large parts of
their fleet.

The city's two airports -- Pudong and the older Hongqiao facility now used
only for domestic flights -- are handing an average of 74,000 passengers a
day, up from a low of 13,000 in May at the height of the SARS outbreak,
Xinhua news agency said.

China's aviation market has boomed in recent years with demand for travel
surging on the back of average yearly economic growth of eight per cent.

About 120 million people are set to take to the skies annually in eastern
China alone by the end of the decade, according to official estimates.

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