Foreign Firms Encouraged to Start Airlines in China

Foreign capital is encouraged to set up general-purpose airline companies in China. The country wants to take this opportunity to develop its laggard general-purpose aircraft industry.

On October 18, Mr. Liu Wanming, deputy director of the Transportation Department, Civil Aviation Administration of China (CAAC), was present in the “2009 China International General-purpose Aviation Summit”. During the conference he said that the CAAC encouraged the foreign capital to set up general-purpose airline companies in China. In addition, the CAAC will also support the individuals in buying private aircrafts. Now the CAAC is actively negotiating with the military side, promoting the trials of reform to the low-level airspace management.

According to the report from the Xinhua News Agency, the Mainland Chinas general-purpose aircraft industry started from the 1950s. Now, there are 88 enterprises doing the businesses concerning general-purpose aviation and 70 airports for general-purpose aircrafts. About 3,076 people are qualified to drive the general-purpose aircrafts, 806 of whom have the private pilot licenses. Now, China has 898 general-purpose aircrafts, which is smaller than the world average number. In the year of 2008, there was gap of more than 170 general-purpose planes between the demand of the Chinese agriculture and forestry and the actually available number.

Mr. Fu Shula, president of AVIC International Holding Corporation said in the conference that the demand for the general-purpose planes in the world from 2008 to 2017 will exceed 42 thousand units. The total value is estimated at about 214.4 billion US dollars. In China, the demanded number will be about 5,000 units, taking 12% of the total number of the world. About 79% of the 5,000 general-purpose planes will be used for the purposes of commuting, operation, production, training and so on. In the next 10 years, the total value of the general-purpose planes China needs will reach 15.5 billion US dollars.

According to the analysis of Fu Shula, the development process of the Chinese general-purpose aircraft market is divided into three stages. The first stage lasts from 2005 to 2010, during which the main target is to consummate the traditional industry like agricultural production, forestry fire prevention and so on. Meanwhile, the emerging industries like the private entertainment flights, short-way transportation of passengers and goods and flight training has set out but their market share is still quite small; the second stage will be from 2011 to 2015, in which the emerging industries will make a breakthrough in the development and the demand of the training market will be greatly motivated; the third stage will last from 2016 to 2020, in which the Chinese general-purpose aircraft market will become mature and have connections with the international market. The market demand will reach the peak at that time.

More than 600 delegates of the general-purpose aircraft enterprises from Germany, America, Canada, Sweden, S. Korea, Japan, Denmark and Hong Kong attended this conference. Most of them said that the Chinese general-purpose aircraft market is a huge pie for them and they will be glad to lead their ways into China.

Some experts advised the relevant government department to issue policies as quickly as possible to help the foreign general-purpose aircraft companies establish their businesses in China. This is a win-win method because China can make use of the foreign companies technology and experience to make its domestic general-purpose aircraft industry get rid of the current situation.