Japan is looking for a midsize airliner to supplement its pair of government Boeing 747-400s, the Daily Yomiuri reports, citing an official source. Because the 747s are so big, the government finds that it must sometimes send groups of bureaucrats on commercial airline services, or charter aircraft small enough to fly into short airfields. Japan is far from deciding just what size of supplementary aircraft it needs, however, since it is considering both the Boeing 787 and Mitsubishi Aircraft MRJ regional jet.

Shanghai Airlines is taking an optimistic view of the Chinese air travel market this year, even as it seeks a second round of government funding. Demand should grow fast enough this year for the carrier to have a chance at making a profit, says Chairman Zhou Chi, pinning some of his hopes on state spending intended to boost the economy. Shanghai Airlines lost 435 million yuan (US$64 million) in 2007 and says it will report a loss more than twice as big for 2008.

Chinese authorities have grounded a second small airline because of financial and management weakness, although one of the country’s largest carriers, Air China wants to take over the business. The Civil Aviation Administration of China ordered East Star Airlines to stop flying because it had failed to make an aircraft lease payment to General Electric Commercial Aviation Service, says an official from the carrier’s home town, the big central city Wuhan. East Star has 10 Airbus A320 family aircraft, all leased.