China's ten-month-old ban on commercial-aircraft purchases is showing signs of being relaxed, as small provincial carriers have had several new orders and leases approved.

The clearest indication of the moratorium being eased was the $120 million order by China Aircraft Supplies (CASC) for three new Boeing 737-300s to equip Shandong Airlines (Flight International, 24-30 May, P14). CASC is a subsidiary of the Civil Aviation Authority of China (CAAC) and the country's main supplier of new aircraft.

CAAC imposed the ban on new-aircraft deals in July 1994 in a move to improve safety and infrastructure, after a spate of civil-aviation disasters killed nearly 400 people in two years. China's last major accident was in June 1994, when a China Northern Airlines Tupolev Tu-154M crashed outside Xian.

The moratorium appears increasingly to be more of an arbitrary measure than a blanket ban, intended to stop the start-up of small inexperienced carriers, "It has never been anything but a policy and is not 100% rigid," says one industry source.

Following approval of the Shandong purchase and earlier leasing deals, observers now expect orders to pick up gradually. Several important and potentially large contracts are under discussion, or awaiting approval.

State-owned flag carrier Air China has a long-standing requirement for up to 15 new widebody aircraft, and is understood to have already signed a letter of intent with Boeing for the 777. The order, however, is being contested by Airbus Industrie, which is offering its A340.

Sichuan Airlines has signed an agreement with International Lease Finance for three Airbus A320s, but is waiting for CAAC approval before taking delivery. The authority is understood to be concerned about training and the carrier readiness to operate a fly-by-wire aircraft.

Other deals being negotiated include up to 20 McDonnell Douglas MD-90s for China Eastern and China Northern Airlines, and an unknown number of Boeing 737-300s for China United Airlines.

Several new provincial and municipal airlines are also hoping to acquire jet-powered aircraft to begin operations.

Beihai Airlines, in the meantime, has begun flying, using two China Northern MD-80s, while Beijing Airlines has been dissolved.

Source: Flight International