China’s civil aviation administration plans to lift its control over the domestic air route operations right by 2010 which means domestic airlines would not be required to go through the current approval procedure and would only need to report the decision to fly on a certain route to the Civil Aviation Administration of China (CAAC).

It would give a chance to small private-owned and joint venture airlines to compete with their bigger counterparts to fly on profit-making routes. Such routes are mostly monopolized by the country’s three biggest airlines.

CAAC deputy director Yang Guoqing said in a statement posted on the administration’s website, ‘Liberalization of the air transport services is a global trend, and China will follow the trend while drafting international and domestic air transport policies. . . . We have drafted an overall policy — strengthening safety control and gradually loosening other controls’.

In 1978, the US became the first country to loosen government control over its aviation industry, and the policy has greatly stimulated the development of its airlines. This is now a global trend. In China it will mean that a large number of new airlines will arise.

Flights in and out of eight key airports — Beijing, Shanghai’s Pudong and Hongqiao, Shenzhen, Guangzhou, Chengdu, Kunming and Dalian — as well those linking to airports with the 15 largest passenger volumes, are still under CAAC’s control.

One CAAC official said the control had been imposed because the resources of these key airports were relatively limited compared with the huge demand.

Some analysts said the three biggest airlines in China — Air China, China Eastern and China Southern — could suffer a jolt because of the CAAC decision.

The effects are already beginning to be seen with the first private airline to operate in China, Okay Airways. At the moment it operates about 20 passenger flights. None of them, however, flies to Beijing, Shanghai or Guangzhou. After the restrictions have been lifted no doubt those cities will be included.
Source: China.org.cn

The General Administration of Civil Aviation of China (CAAC) has urged the United States to ease its visa and travel controls on Chinese people after the two nations signed an agreement to more than double their passenger flights by 2012.

CAAC head Yang Yuanyuan said in a statement published on the regulator’s website that the US should ‘provide convenience for Chinese in visa applications and group travelling to America, in order to boost the balanced and fast growth of the aviation markets in both countries.’

The accord was announced during talks between the US and China, led by Treasury Secretary Henry Paulson and China’s Vice Premier Wu Yi.

Under the pact, US and China carriers will be able to operate 23 daily round-trip flights between each other’s countries by 2012, up from 10 currently, while the two sides also agreed to begin talks in 2010 on a so-called ‘open skies’ agreement. If an ‘open skies’ agreement is reached — and this seems increasingly likely — then the number of travelers in both directions will surge.

The Chinese government has made a most serious effort to make it easier for visitors to China to acquire visas. The writer, speaking from very recent personal experience, can attest to the fact that it is much, much easier to arrange a visa to China than to the United States. Matters could be improved in many areas.
Source: Forbes

China and New Zealand have agreed to amend their air services agreement so that their airlines can establish commercial code-share arrangements.

Annette King, New Zealand’s Minister of Transport, made the announcement after meeting with Yang Yuanyuan, Minister of the General Administration of Civil Aviation of China. She said, ‘Yang and I agreed that China and New Zealand will implement from this month a change to our 1993 air services agreement to facilitate code share arrangements.’

According to official statistics, New Zealand received 114,000 visitors from China in the year to March, a 26% growth year-on-year.

ir New Zealand launched direct Auckland-Shanghai services in November 2006, a ‘milestone’ for the airline and for direct travel between New Zealand and China.

Air New Zealand plans to increase its Auckland-Shanghai services from three to five. Which is excellent news. However, shared codes are not without their problems. A simple example: when the idea of code sharing first started Qantas, the Australian airline, made deals with several other airlines. The result was chaos at the airports.

A traveler would buy a Qantas ticket, check in at a Qantas counter and find that the aircraft ready for boarding was from some other airline. At which point the passenger refused to fly.

Nowadays it is very, very carefully explained to all passengers right from the very first contact that this is a code-share flight and all though it might say Qantas it may very well be Finnair. Not that anyone has anything against Finnair. It is just that most Australians do not see raw herring and vodka as a satisfactory inflight meal. (I lie, I lie. The food on Finnair is, in fact, quite excellent.) Still, a flight from Sydney to Bangkok is often code-shared between Finnair, Air Malta, British Airways and Qantas. And this could give a passenger pause.

Code-sharing can bring benefits but it has to be handled very, very carefully.
Source: China View

IATA, the International Air Transport Association (IATA) has identified five challenges China will face in an air industry which can compete at world levels. These are: efficient air traffic management, environmental sustainability, cost-efficient airport infrastructure, internal cost control and commercial freedoms.

However, note that IATA. almost by definition, is representing all the other commercial airlines (a vocal slab of which is American neatly protected from true competition by Americ’a strange bankruptcy laws) and commercial freedom is something members of IATA have been squabbling about among themselves since it was formed. Basically what most IATA members want is commercial freedom from everyone else, but not for everyone else.

Giovanni Bisignani, IATA’s Director General and CEO and shown here, at the China Civil Aviation Development Forum in Beijing, said, ‘China has an important role in the industry today, and is a future global leader for air transport. By 2010, the largest single market for aviation will be intra-Asia, accounting for nearly a third of all air travel with China at the centre. China is at a critical moment that is also a great opportunity. And to build a more successful future, China has to avoid the mistakes made in other parts of the world.’

He went on, ‘ While there have been impressive accomplishments in China - IATA-1 was opened last year that cuts 30 minutes off a round trip to Europe, RVSM will be implemented this year — big challenges still remain. The congestion delays in the Golden Triangle can be measured in hours, while the inefficient airspace design in the Pearl River Delta is costing HK$1 million a day with Chinese carriers being the most affected. We need a solution quickly.’

And IATA would like, please, to have the prices of going and coming lowered.

Giovanni Bisignani said, ‘China has some of the highest charges in Asia outside of Japan. With uniform charges for all Chinese airports, they are definitely not cost-related. IATA is working with the government to develop a charges regime that challenges airports on efficiency, provides a reasonable return to investors, and supports a competitive industry.’

The competitive industry would, of course, mainly be members of IATA and, indeed, again he has a point.

Massive landing charges curtail commercial development and China will have to make up its mind of what basis those charges should be made.

He then got to commercial freedom which is a tricky point with every major country in the world and it is pointless trying to blame one country over another.

He said, ‘The recent US-EU open-skies agreement moves the industry in the right direction, but falls short of the fundamental change we need. China’s fast growing economy demands efficient air transport links, and progressive liberalisation has played an important role — opening Hainan as a free port for aviation services, liberalising bilaterals with the US, ASEAN, Japan and Korea. With the aviation industry’s centre of gravity moving East, China has an enormous leadership opportunity to shape policy where the US and EU have failed to do so.’

It may well be he is hoping for too much.
Source: Money Control