(Corrects paragraph 6 of Aug 4 story to say CAO supplies half
of its 10 million tonnes of jet fuel trading volumes to China)
* Jet fuel demand growth to stay at 10 pct in 2014
* CAO to continue supplying 10 million tonnes jet fuel to
* CAO looks to airports outside China to counter domestic
By Jessica Jaganathan
SINGAPORE, Aug 4 China's jet fuel demand growth
is likely to hold at around 10 percent this year even as the
world's second biggest economy faces a broad slowdown, the chief
executive at China Aviation Oil (Singapore) said on
Growth in consumption should hold at about the same pace as
in 2013, despite stiff competition from fast and affordable
rail, said CAO's Chief Executive Meng Fanqiu.
Jet fuel use in China is growing as its population gets
richer and flies more often. The Civil Aviation Administration
of China (CAAC) plans to add nearly 80 new airports by 2020,
with China to replace the United States as the world's largest
aviation market in the next two decades.
"Supply into China has been stable with a slight increase,
which is in line with our expectations, even though (the
country's) growth rate has slowed down," said Meng on the
sidelines of the company's earnings briefing.
China's civil aviation industry grew 10.7 percent in the
first half of this year while total jet fuel consumption
increased by 11 percent year-on-year, CAO said.
CAO, the sole importer of jet fuel into China, supplies half
of its 10 million tonnes of aviation fuel trading volumes to
China every year to tap this growth, Meng said. CAO plans to
keep overall trading volumes steady.
Still, the company faces more competition as refining
capacity increases within China, which is able to meet much of
the domestic demand growth.
CAO's overall jet fuel supply and trading volumes fell by
9.1 percent to 4.8 million tonnes in the first half of this year
compared with the same period last year.
The company also plans to expand its aviation marketing
business into more airports outside China. CAO already supplies
jet fuel to 32 international airports outside of China, and
plans to grow its presence in Europe and the United States as
well as "big hub airports", Meng said without any elaboration.
Earlier this year, CAO signed a jet fuel supply contract
with China Airlines in Taiwan.
It also plans to continue expanding its trading activities
into other oil products, including fuel oil and petrochemicals,
and seeks to invest in or acquire strategic oil assets to
diversify its income streams, the company said.
CAO on Thursday last week announce that its first-half net
profit rose 7.2 percent from a year ago to $37.4 million.
Its overall trading volumes rose 14.9 percent to 9.1 million
tonnes in the first half of the year.
(Reporting by Jessica Jaganathan; Editing by Tom Hogue)