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The Civil Aviation Administration of China is considering levying a new fee on air carriers following the cancellation of the previous civil aviation construction fund, industry insiders said.

The new fee, imposed as payment for possessing flight routes, is believed to be much less than the aviation construction fee. The name of the fee and details regarding the charges have yet to be determined.

"We haven't received any official document about it so far, and the officials in charge should still be studying the plan now," said an official surnamed Gao with CAAC, the nation's aviation industry regulator.

Industry analysts predicted that implementation of the lower new fee will allow air carriers to achieve higher net profits in coming years.

Ma Ying, an analyst with Haitong Securities Co, said that the aviation industry in China generally recorded slim profits, and the previous aviation construction fund cost airlines a considerable sum of money.

"China Southern paid between 700 million yuan (US$84.34 million) and 800 million yuan in 2002 for the construction fee," said Ma. "We believe the new fee won't be more than 100 million yuan a year for the company."

China Southern, the country's largest carrier by fleet size, reported a turnover of more than 18 billion yuan and a net profit of 576 million yuan in 2002.

Following the Ministry of Finance's move that scrapped the aviation construction fee retroactive to the start of this year, shares of listed airlines rose yesterday on the Class-A stock market.

Shares of China Southern increased 3.01 percent to 6.17 yuan yesterday while the price of Shanghai-based China Eastern Airlines ended at 4.87 yuan, up 1.04 percent. Shanghai Airlines Co Ltd saw its shares climb 2.13 percent to 11.52 yuan.