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SCMP Reporter

A WAR of words between two rival China inflight magazine publishers could be decided in court with one threatening legal action and the other standing by earlier remarks.

  The row centres on the interpretation of publishing and production contracts for airline magazines and, ultimately, on the powers of the Civil Aviation Authority of China (CAAC).

  At stake is a slice of China's huge advertising revenue and the rapidly increasing number of mainland air travellers who are wealthy enough to buy consumer and luxury products.

  Christophe d'Orey, chief executive of Asia Inflight, which today releases the revamped Chinaskies magazine on behalf of the CAAC, has confirmed having sent rival Parco a letter threatening legal action.

   It follows allegations by Anthony Havens, director of business development for Parco, published in a trade magazine. Parco publishes inflight magazines for five Chinese airlines.

  Mr Havens had alleged in a letter published in the trade magazine that Asia Inflight had made 'entirely spurious' claims in respect of Chinaskies.

  Mr d'Orey said he was waiting to see if Mr Havens had 'calmed down' before taking the matter any further.

  'Our recent correspondence has been fair and in the spirit of proper competition,' he said.

  But Mr Havens claimed: 'There was nothing in my letter that I don't stand behind and there was certainly nothing libellous.'   The bi-monthly bilingual Chinaskies magazine will be placed in seat pockets on all international and domestic flights by Chinese airlines.

  It has been in existence for 12 years, although in a different format and was actually published between 1989 and 1991 by a company linked to Parco, called China Arts and Crafts Printing.

  Last Saturday, 200,000 new copies of Chinaskies were sent by air to Beijing and passed on to six mainland airports for distribution to the nine major airlines.

  Mr d'Orey, who owns 85 per cent of Asia Inflight and is backing the venture with US$2 million over two years, said his publication was the first magazine with national distribution that was targeted at the elite one per cent of Chinese businessmen and officials who travelled by plane. This made it a powerful advertising medium.

  He said CAAC owned all China's airlines, except Shanghai Airlines, allocated routes, gave final authorisation for aircraft buying, controlled most airports and issued airline regulations.

  'This means the airlines are obliged to carry Chinaskies, ' he said.

  Asia Inflight claimed the 20-year publishing and distribution deal for Chinaskies was exclusive.

   Mr Havens rejected these claims.

   'Contrary to Mr d'Orey's statements, they [the airlines] are independent and decide when and what they buy and have to justify those decisions on a commercial basis,' he alleged.

  'They are not just nominally independent, they are independent in fact.'   Mr Havens said Parco - which served as the inflight magazine production and printing house for Air China, Eastern, Shanghai, Southern and Northern Airlines, as well as for Shenzhen Airport - had exclusive contracts direct with the airlines.

  Parco also holds the worldwide advertising franchises for the publications.

  It claims bi-monthly print runs of 160,000 copies for Air China and Eastern, 140,000 for Southern, 100,000 per quarter for Northern, and smaller runs for Shanghai and Shenzhen.

  Mr d'Orey has disputed these figures.

   He claimed Parco's criticisms were 'desperate actions to protect their previously unchallenged business' in a thriving market.

  Mr Havens said: 'The target market is easy to define. It is not the amorphous 1.2 billion, because even if you could get advertising messages to them, they have insufficient money.

  'It is the affluent 60 million in the coastal cities that are consumer goods buyers and the far, smaller elite who can afford luxury items.'   He said the chaotic advertising market in China made inflight magazines an ideal vehicle for upmarket advertising, because only the wealthiest people could afford to fly.



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