From News,page 4, issue no.348, December 31, 2007
Translated by Liu Peng
Original article: [Chinese]

Air China Chairman Li Jiaxiang, a long-time advocate for the consolidation of Chinese airlines industry to?withstand foreign competition, has stepped down to become a state civil aviation regulator.

Li, once an air force major general, has been appointed to head the General Administration of Civil Aviation (GACA) by the Chinese Communist Party on December 28, 2007. He was?named the party secretary and acting president of GACA.

The 58-year-old Li is known for his protectionism view on local airlines industry. He believes in merger, cross-shareholding and consolidation of local airlines as a mechanism to withstand the challenges posed by foreign players.

He has mounted strong opposition against a recent Singapore Airlines' move to buy a stake in China Eastern Airlines. He has attempted to foil the deal – which is waiting for the nods from China Eastern Airlines shareholders through a voting scheduled on January 8 – by initiating a counter offer and takeover strategy.

Some industry watchers think that Li's latest appointment would have an impact on the Singapore-China Eastern deal. Besides, a new round of Chinese airlines consolidation is widely expected under Li's reign.

Seven years in Air China
In November 2000, Li accepted an urgent appointment to head the China International Airlines (former Air China). It was a time when the airline had registered losses for three years in a roll, with an annual deficit amounting to some 600 million yuan.

The then national carrier was also shrouded by scandals, including cases of pilots hijacking flights to flee the country, cabin staff smuggling guns and drugs, and accounting personnel taking bribes.

The airline was lagging far behind its regional counterparts like China Eastern Airlines and China Southern Airlines, which had then both successfully listed in the mainland and Hong Kong stock exchange.

Li is widely credited as the man who has given Air China a new leaf of life, turning it into the world's biggest airline by stock market value today.

He had started his tenure at the airline with a "house cleaning"exercise to cut spending, increase efficiency and build up team spirit. Later, massive restructuring set in and transformed the airline's direction.

When Li took over the airline, it was positioned as an international airline with both passenger and cargo flights serving the global routes. However, since the 1990, the airline's flights to the United States and European countries were suffering long-term losses.