China's airlines carried a total of 306,000 tons of cargo in May, an increase of 16 per cent over the same month a year ago.

The nation's carriers also flew 15.5 million passengers last month, up 19 per cent year on year, according to figures released by China's General Administration of Civil Aviation.



Combined sales of 20 domestic airlines were up by 11 per cent to CNY21.1 billion (US$2.77 billion) in May, while operating costs amounted to CNY19.9 billion, Bloomberg News reports. Within the 20 airlines surveyed, 14, including China Southern and China Eastern Airlines, were profitable in April, and six other carriers, including Hainan Airlines, suffered a loss for the month.



It said that growing passenger demand and higher fuel surcharges helped improve the carriers' competitiveness versus overseas airlines.



The stronger performance of China's domestic aviation market is said to be attracting foreign investors such as Singapore Airlines, which is reported to be in talks over purchasing a 24 per cent equity interest in China Eastern for $930 million together with Singapore's state-controlled investment fund, Temasek.



Bloomberg said Singapore Airlines would pay $600 million on the stake and Temasek about $330 million, according to unidentified sources speaking ahead of winning regulatory approval.



It said Singapore Airlines is following in the footsteps of Hong Kong's Cathay Pacific Airways, by trying to invest in mainland carriers, which are expected to see business boom for the Beijing 2008 Olympic Games. Cathay Pacific has a 17.5 per cent interest in Air China, the nation's biggest international carrier.



China's General Administration of Civil Aviation is predicting that the nation's airlines will carry 3.9 million tons of cargo this year, up 12 per cent year on year, and 185 million passengers, an increase of 16 per cent.