Air China was established and started operations on 1 July 1988. Formerly the Beijing-based international carrier division of Civil Aviation Administration of China (CAAC), it was renamed in 1988, when the government decided to split the operating divisions of CAAC into separate airlines, each with its own name. Further deregulation of the aviation business took place in 1994, enabling foreign investment in airports and facilitating the import of aircraft built outside mainland China. By 1996 the country had 108 airports with scheduled airline services and around 30 different airlines. On 28 October 2002, Air China consolidated with China National Aviation Corporation and China Southwest Airlines.
During 2004 as part of a consolidation of the Chinese aviation industry Air China absorbed Zhejiang Airlines (subsidiary of CNAC). On 15 December 2004 the company listed its shares on the Hong Kong and London Stock Exchanges. Air China has shareholdings in Air China Cargo (51%), Air Macau (51%) and also holds majority shares of Shandong Airlines.
In March 2005, Air China was in talks with Swire Group, the largest shareholder of Cathay Pacific, for merger talks with Air China acquiring Cathay Pacific, and Cathay Pacific acquiring a majority stake of Dragonair. In return, the Swire Group would become the largest individual shareholder of Air China's parent company. Both airlines subsequently announced that the airlines will not merge completely in the forseeable future, and Swire expressed its commitment in remaining as the largest shareholder of Cathay Pacific. It was also announced that Air China would cooperate with Cathay Pacific by codesharing flights in the late 2005, and would partner with Asia Miles in the second-half of 2005.
In January 2005, Air China is owned by China National Aviation Holding Company (CNAH)(69%), public floatation (21%) and Cathay Pacific (10%). On May 22, 2006, Air China signed an agreement with Lufthansa and was officially invited to join Star Alliance, a rival airline alliance of Oneworld of which Cathay Pacific is a member. A few days later on June 9, 2006, a joint annoucement revealed a new shareholding structure in which Air China will acquire a 17.5% stake in Cathay Pacific, while the later will own 20% of the former.
[edit] Incidents and accidents
- On September 11, 2001, an Air China Boeing 747 from Beijing to San Francisco was escorted by two U.S. Air Force F-15 Eagles onto the north runway at Vancouver International Airport during Operation Yellow Ribbon, purely due to communication problems.
- On April 15, 2002, Flight 129, a Boeing 767-200ER jet from Beijing to Busan, crashed into a hill while trying to land at Gimhae International Airport during inclement weather, killing 128 of the 166 people on board. To date, this has been Air China's lone blemish in its safety record.
- On 13 March 2005, the right main gear wheels of an Air China Boeing 747-400 at LAX, sank deeply into asphalt at the edge of the taxiway as it turned on to runway 25R for take-off. The aircraft was immobilised and the runway had to be closed for 13 hours before the aircraft could be pulled free (ref: Flight International, July 2005).
