New China Trust may find the airline industry an easier ride, particularly in China where state-owned airlines are in a sweet spot.

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China's biggest airline is closing in on a deal for a 51% stake in the proposed cargo joint venture to be based in Shanghai.

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Qantas said China Eastern Airlines is China's second largest airline in terms of passengers carried.

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Based in Shanghai, China Eastern Airlines (CEA, 36) is China's third-largest airline.

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But China is likely to be cautious in granting Cathay additional flights given opposition from home carriers including Shanghai-based China Eastern Airlines as the fragmented Chinese airline industry consolidates.

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And, in the current economic environment with slowdown in Europe, weak macro economic environment in the U.S. and slowing growth in emerging markets like China and India, many in the airline industry anticipate low sales for these super jumbos to continue over the near term.

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Newly appointed chairman Lee Yun-ling left China Airlines after 24 years to head domestic airline Far East Transport, which is 25%-owned by the American International Group.

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Hong Kong's Hang Seng Index lost 2.4% amid worries over a new strain of bird flu spreading in China, which weighed on Hong Kong-listed airline stocks.

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Many international cruise companies have their eyes set on China's growing number of travelers, who are propelling the airline and hotel industry domestically and overseas.

WSJ: Royal Caribbean Plans New China Launch

Plus, the airline faces new competition on its coveted Pacific routes, as China has opened its gates.

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