China Airlines of Taiwan lost T$2.37 billion (US$71.8 million) in the first six months of this year, compared with a T$6.53 billion loss a year earlier. Improved results from fuel hedging helped the Taiwanese carrier’s result, despite a 29.5% fall in revenue to T$44.73 billion (US$1.4 billion). Cargo led the way down, with a fall of 51%.

Air China and Cathay Pacific will set up their planned cargo joint venture in Shanghai this year. The company will handle exports passing through Shanghai to Hong Kong, said Air China Vice President Fan Cheng, adding that the two companies have almost finished their evaluation of asset values for the joint venture and are now talking about how to operate and develop the proposed business. The two airlines own shares in each other.

East Star Airlines has become the first Chinese airline to go bankrupt. A court in Wuhan, the central city where the four-year-old private carrier is based, has rejected a restructuring plan for the company. At the end of 2008 its debts exceed 1 billion yuan (US$145 million), while assets amounted to 629.6 million yuan, says the People’s Daily newspaper. Chinese state airlines have also been insolvent, but the possibility of their liquidation has never been raised.