China’s economy is booming again and oil prices are around half their peak 2008 levels. For Chinese airlines, it’s a pretty simple equation, with pent-up demand expected to provide very strong traffic growth again in 2010 after surprisingly strong growth last year (particularly in the second half). As a result, airline industry profits should flow again in 2010 after a recovery in earnings in 2H2009. Chinese aviation is bullish again, growing capacity aggressively (taking delivery of almost one in two aircraft bound for Asia Pacific airlines in 2009 – a proportion it will repeat in 2010 and 2011) and – crucially – looking to further consolidate at home. And will expansion mean foreign airline acquisitions, just as China’s wealth funds are buying into foreign resources?