HONG KONG: Air China will boost its capital expenditure by 6 percent to 18 billion yuan, or $2.5 billion, this year, and still hopes to tie up with rival China Eastern, executives said Tuesday after the Chinese flag carrier posted forecast-beating results.

In January, the parent group of Air China formally proposed a strategic partnership with China Eastern, after China Easterns minority shareholders vetoed a $920 million plan to sell a 24 percent stake to Singapore Airlines and Temasek, Singapores state-run investment agency.

But China Eastern rejected the Air China proposal, which involved a cash injection of $1.9 billion and involved broad cooperation between the two airlines operations.

“We maintain our proposal, but the decision-making power is ultimately in the hands of China Eastern,” said Kong Dong, acting chairman of Air China.

Singapore Airlines said on Tuesday it was still in talks with China Eastern over taking a stake.

“We will continue a dialogue with them, but the question of when we may go back to shareholders and how that will take place is a question for China Eastern and not for us,” Singapore Airlines spokesman, Stephen Forshaw, said on the sidelines of an event to launch the first commercial flight of the Airbus A380 to London.

Air China, the worlds largest airline by market capitalization, will bring 24 new aircraft into service this year and at least 20 in 2009 and 20 in 2010, Fan Cheng, chief financial officer, told analysts ahead of the news conference.

The Olympics in Beijing and Chinas continued economic boom should ease worries of a global slowdown due to the looming U.S. recession, Fan added.

“We have no control over the macro environment - those issues are for economists to discuss,” Fan said. “But airlines usually grow on par with GDP (gross domestic product),” he added, referring to Chinas past five years of double-digit expansion.

Late on Monday, Air China posted a 57 percent rise in 2007 net profit to 4.23 billion yuan, from 2.69 billion yuan a year earlier.

Net profit for the second half rose 19 percent to 2.66 billion yuan, according to Reuters calculations from previously reported figures.

Revenues from the cargo business, which is struggling in a cutthroat environment, grew just 1 percent to 4.06 billion yuan.

Shares in Air China fell more than 6 percent Tuesday in Hong Kong, while the benchmark Hang Seng index was down 1.2 percent. The stock is down more than 43 percent over the past three months as investors lose confidence in restructuring prospects for Chinas aviation industry.

To further grow its international brand, Air China joined Star Alliance, the worlds oldest and largest airline grouping, in December. Such alliances allow airlines to “code share,” or jointly sell tickets and share revenue streams for flights run by participating airlines.

Fan said Air China is expected to share 900 million yuan revenue from its membership of Star Alliance in 2008. Star Alliance covers 155 countries and regions and 855 destinations.

Joining the alliance, which began in 1997, allows Air China to extend its global reach by connecting to its partners, which include Singapore Air, Air Canada and Polands LOT.

“We will code share on routes such as Warsaw-Beijing,” Fan said.

PARIS: A French appeals court ruled Tuesday that Jerome Kerviel, the former trader Sociйtй Gйnйrale has blamed for nearly \4.9 billion, or $7.7 billion, in losses, should be released from jail while the investigation into his alleged fraud continues.

Kerviel, 31, was to be placed under judicial supervision and was forbidden to leave France or to associate with any former colleagues of the bank for the duration of the inquiry. Kerviel surrendered his passport to the authorities in late January.

“I am very happy for Jerome,” said one his lawyers, Elisabeth Meyer, according to Reuters.

Kerviels lawyers had been seeking his release from pretrial custody since he was placed there on Feb. 8. The Paris prosecutors office had opposed his release on the grounds that he could flee or otherwise interfere with important witnesses or evidence in the case. The prosecutor had also expressed concerns about Kerviels mental state.

Legal experts said the courts decision was a recognition that Kerviel, who has already admitted to fabricating trades and forging documents to hide his activities, could only harm his chances for leniency if he failed to cooperate with the inquiry.

“It suggests that he is no longer considered a flight risk and will not compromise the ongoing investigation,” said Christopher Mesnooh, an international business lawyer based in Paris .

Mesnooh stopped short of saying that Kerviels release was a sign that the prosecutions case against the former trader was weakening. “I think that would be reading too much into it,” he said. “This does not represent any kind of implicit recognition that he is not guilty of what he has been accused of.”

Jean Veil, a lawyer representing Sociйtй Gйnйrale, said the bank had not requested the extension of Kerviels detention.

“The only reason to keep him there would be because there are things that still need to be done or avenues of the investigation that have not yet been pursued,” Veil said.

(12-12) 12:34 PST San Jose, Calif. (AP) —

EBay Inc. will focus on improving the “user experience” in 2008 in hopes of making the world’s largest online auction more satisfying for its millions of users, a top executive said.

Engineers significantly updated eBay’s home page earlier this year Д for the first time since 1999 Д and made its search engine faster.

Next year they’ll focus on rooting out sellers with unethical or questionable business strategies Д particularly vendors who charge exorbitant fees, said John Donahoe, president of eBay Marketplaces.

Many sellers lure shoppers with extremely low fixed prices or auctions that start at a penny Д then charge disproportionate fees to mail the item to the buyer.

The phenomenon pervades lightweight electronics vendors, some of whom advertise cell phones or digital music players for virtually nothing Д then charge $15 or more to ship.

A year ago, Donahoe said, eBay began asking buyers to rank sellers’ shipping costs on a scale of one to five. Users may now view that data in aggregate form and, if they want, decide whom to purchase from based on shipping fee scores.

The company may use the data in more palpable ways in 2008, such as incorporating shipping fee complaints into search algorithms; sellers with high shipping fees may not appear in the first page of search results. It also may include factors such as whether shipping was prompt or the seller responds to questions.

While they seem arcane, such tweaks have big ramifications for the tens of thousands of people who make their living through eBay. Donahoe, who came to eBay after a business consulting career, hopes buyers will be the beneficiaries.

“EBay needs to evolve the user experience to be more competitive and differentiated,” Donahoe said in the company’s San Jose, Calif., headquarters. “We could start basing our search results or other policies on user feedback, or at least give the buyer a warning.”