Airports in China will be encouraged to seek foreign investment and list on overseas stock exchanges, said a deputy director of the Civil Aviation Administration of China, Bao Peide. The move is part of the CAAC's programme to sever its ties with the airports and turn them into financially independent operations run by regional governments, said Dow Jones. However, Bao did not say how airports might improve their performance to enable this to happen.
Beijing Capital International Airport Co and Shanghai International Airport Co are already listed, but these are two of the country's most important airports. Operating few routes to a small number of passengers, most of China's 143 airports are technically insolvent, according to a report by the Australian consultancy the Centre for Asia-Pacific Aviation. About 90 per cent of them made combined losses of Yn800m last year.
"With low traffic and virtually non-existent revenue sources from retail or other commercial development, it's very difficult for these airports to break even," said Derek Sadubin, an analyst for the company.