The civil aviation regulator said it will soon launch policies to subsidize largely loss-making small and medium-sized airports as well as short-hop air services.

Civil Aviation of China (CAAC) said in a statement on its website that subsidies for airports will be provided mainly to those with annual passenger traffic of less than 5 million people, and those located in remote, underdeveloped regions.

More than 80% of the country’s airports are eligible for the subsidies, with subsidy levels dependent on each airport’s size and location.

Short-hop air routes with passenger load factors lower than 80 per centwill also be subsidized. It did not provide a timetable for the new rules.

The civil aviation regulator added that the state council, China’s cabinet, has approved its proposal to continue an airport construction levy until 2010. Passengers are currently levied RMB50 as airport construction fees for each domestic flight, RMB10 for domestic regional routes and RMB90 for international routes.

The illustration is of Xining airport, Tibet. That is a small airport by any definition.

A total of 336 domestic flights to and from Beijing will be scrapped from August 15 to October 27. This is because of the poor on time performance due, mainly, to a shortage of technicians and other professionals and the limited capacity of domestic airports. It will lower the number of peak hour flights from more than 60 to 58 per hour.

In a second phase of cuts, from November to March, the number of peak hour flights at Beijing will fall to 55 per hour.

According to the CAAC, most flights to be canceled are operated by the nation’s three leading carriers: Air China, China Southern and China Eastern.

Airlines had been warned over almost 120 flights since the CAAC launched a campaign in June to reduce delays at Beijing airport. The CAAC named the 20 most-delayed flights every 10 days. Flights were cancelled after two warnings.

The campaign should prevent long delays next August when Beijing hosts the 2008 Olympic Games.

The CAAC saw the flight cuts as concrete steps to cool the overheating development of air transport. Sources said 18 airports, including Beijing, Shanghai Hongqiao, Chengdu, Shenzhen, Dalian and Urumqi, had been operating at their maximum capacity.

China’s air transport is growing at an average annual rate of more than 16%. Beijing handled 26 million passengers in the first half of 2007, and the number for the whole year will far exceed its designed annual capacity of 35 million passengers.
Source: People’s Daily Online

The General Civil Aviation Administration announced in its industry-wide mid-year report that fueled by surging demand, the Chinese aviation industry went from losses into profits in the first half of this year.

The report indicated a double-digit increase in demand for every segment of the industry.

Airlines had RMB2.39 billion ($316 million) in losses in the same period last year. This year they made RMB1.54 billion and revenues rose by 19% to RMB86 billion.

Luo Zhuping, board secretary of China Eastern, said, ‘Consumer spending has risen considerably as a result of the fast-paced economic growth. So people are willing to spend more money on air travel, and this is spurring the industry on.’

The report said first-half passenger volume grew 16.7% to 86.7 million people. The load factor increased to 73.9%. Cargo volume rose 15.3% to 1.83 million tons.

International flights grew ‘conspicuously’ faster than domestic ones, the report said, with passenger volume rising 21.8% to 7.9 million. Domestic passenger volume increased by 16.2%.

Ma Ying, an analyst at Haitong Securities said, ‘Chinese airlines increased investments in international flights and routes this year. Furthermore, the rising yuan has encouraged more Chinese to go on trips overseas.’

Zhang Lei, a spokesman with China’s first budget carrier, Spring Airlines, said his firm’s profits had more than doubled in the first six months of 2007. He said, ‘What we are seeing is an airline industry that is becoming more mature. Airlines are learning to adapt well to the rules of the free market.’

The administration’s report said there were no safety-related incidents during the period and that complaints of missing luggage and poor service had gone down. For which relief, much thanks.
Source: Shanghai Daily

Although China has the world’s fastest growing civil aviation industry, more airports are needed to extend airline services to more parts of the country.

Yang Yuanyuan, head of the Civil Aviation Administration of China (CAAC), said while addressing a training course for airport senior managers, ‘The number of airports is still small compared to other countries.’

This is true. Comparative figures:

United States — 20,000 airports.
Brazil — more than 2,500.
China — less than 500 . . . and then only if temporary runways are included.

Not only are there very few, the distribution is unbalanced. The density of airports in eastern China is 5.3 times the national average, while the density in western China is less than two-thirds the average. Which makes it very empty of airports

China’s dozen large airports are operating beyond their capacity, which raises their logistics costs. Small ones are losing money because of a lack of passengers.

Yang Yuanyuan said that although less than 20% of all air passengers use small airports, they are ‘very important cornerstones of the sustainable development of civil aviation. Airports should be regarded as public infrastructure. Local governments can continue to let profitable large airports operate as enterprises, but they should treat medium-sized and small airports as public welfare facilities.’

Same is true in Australia. There is no small country town that does not have a feeder airport within easy reach. Yes, the airports are subsidized and the airfares, typically, are not inexpensive. But this feeder network of small airports is essential to the country.

Wang Wei, a professor at the Tianjin-based Civil Aviation University of China, said the widespread notion that airports are enterprises rather than infrastructure had kept local governments and large airport groups from building more small airports in recent years.

He said, ‘If you simply look at the figures reflecting an airport’s performance, it may seem like they are losing money. But the benefits they provide to the local economy and tourism sector are huge.’
Source: China Daily