Shanghai Airport Group's listed unit, Shanghai International Airport Co Ltd (SIACL), reported a 12% increase in net profit for the six months ended 30-Jun-07, on the back of surging passenger and cargo traffic. The company's revenue rose 7% in the period, while operating profit increased by 11.9%.

SIACL recently obtained regulatory approval to issue USD330 million in ten-year corporate bonds to fund ongoing expansion at Pudong Airport. Overall, USD2.0 billion is being invested in various expansion projects at Pudong. The airport is expected to handle 60 million passengers and 4.2 million tonnes of freight annually by 2015.

UPS broke ground on its new air cargo hub at Pudong mid-year. The facility, to support UPS' express handling, distribution, cargo and air operations, is due to open in 2008. Meanwhile, major construction work on the Pudong western cargo terminal project was completed in Aug-07. The whole project covers 550,000 sqm and the cargo terminal will handle 1.2 million tonnes of cargo per year. It is scheduled to enter service next year with Pudong Airport’s new second terminal and third runway.

Cargo throughput at Pudong International Airport rose from 634,966 tonnes in 2002 to 2.2 million 2006, while in the first half of this year, cargo volume rose 16.3% to 1.1 million tonnes.

Meanwhile, Shanghai Hongqiao Airport's expansion project will commence shortly with a total investment of USD2.0 billion. The project will include a new runway and terminal and is expected to be completed before 2010.

Shanghai's airports are likely to be the key beneficiaries of China Eastern's restructure and expansion under a strategic investor. Singapore Airlines/Temasek recently agreed to acquire a combined 24% of the Shanghai-based airline, although there are reports Cathay Pacific/Air China could prepare a blocking bid as they seek control of the airline.  Click here for more information.