Air China sees profits take off

There has been a large growth in air travel in China

Surging passenger numbers helped push up profits at China's flagship carrier, Air China, by 11.7% in 2006, despite an increase in fuel costs.

The airline made a net profit of 2.7bn yuan (£179m; $347m) on sales which rose 17.4% to 44.9bn yuan.

Air China carried 33.97 million passengers in the year, up 14.2%, with a load factor - an indication of how full its planes were - of 75.9%.

Chairman Li Jiaxing described 2006 as a "critical year" for the company.

During 2006, Air China introduced new 35 routes, including international services linking Beijing with Delhi, Madrid and Sao Palo.

"Although the high price of jet fuel creates significant cost pressure, China's economy has maintained its fast pace of growth and has been the driving force behind our rapid growth," Mr Li said.

He added that the 2008 Beijing Olympics was expected to boost business.

Challenge

Air travel within China is booming as greater wealth makes it an affordable means of travel to more people.

The country is expected to buy 2,230 planes between now and 2025.

Earlier this week, the Chinese government confirmed plans to begin designing and building larger planes domestically, in a challenge to Boeing and Airbus.

China Aviation Industry Corporation (AVIC) has already started building a regional plane, the ARJ-21, which will carry between 78 and 105 people.