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Beijing Grounds New Airline Starts

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Beijing Grounds New Airline Starts

Old 16th Aug 2007, 05:21
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Beijing Grounds New Airline Starts

From today's South China Morning Post (Hong Kong) Business section dated Aug 16 2007. Written by Charlotte So.



Beijing has suspended the establishment of new airlines in the country for three years as it increases efforts to prevent overcrowding at airports and alleviate a pilot shortage.

The world's second - biggest aviation market is paying the price for runaway growth with overstetched pilots and congested flight paths, rasing concerns about safety.

The General Administration of Civil Aviation of China (CAAC) said no new airlines applications would be accepted until 2010 and requirements for new carriers would be raised. It did not specify new criteria.

It is the first austerity measure implemented by the CAAC after officials last month said the mainland aviation industry was growing too fast and was in danger of overheating.

In the first six months of the year, passenger numbers grew 16.7%, outstripping the 14% target set by Beijing.

Beijing Capital International Airport is so overcrowded that the regulator ordered it to cut it's daily flights to 1050 by October from 1100 now. Daily flights will be further cut to 1000 by March next year.

The industry's double didgit growth has attracted a crop of new privately owned airlines which has added congestion in the skies. In the past 2 years, more than 10 carriers were set up, including Juneyao Airlines, Spring Airlines, Okay Airlines, Chonquing Airlines and Jade Cargo Airlines.

The start up carriers have begun poaching pilots from other airlines as new graduates from flight schools are insufficient to meet demand. Highlighting the shortage, China Eastern Airlines sued a pilot for 6 million Yuan after he and five others left the carrier last year.

Industry watchers forecast that the pilot shortfall would reach 10,000 in five years, with the aircraft fleet reaching 1250 by 2010. The CAAC said it would assert stringant controls on pilot-aircraft ratios and pilot flying hours.

"Safety is our top prioroty" said Du Xiaping, the chairman of corporate jet company Deer Air. " The CAAC is pressing hard to maintain safety by controlling growth in the industry."

Mr Du said while the mainland had accumulated more than 80,000 flying hours with no accidents, it was getting harder to keep that safety record considering industry growth.

Some carriers will be exempt from the new rules, including cargo airlines, those employing foreign pilots or deploying state designed aircraft, according to the CAAC. New airlines based in western or northeast regions will also be allowed.

"Beijing hasn't done enough to encourage airlines to expand in remote areas, leaving key airports overwhelmed by new flights", Mr Du said.

Incentives such as tax allowances and profit tax concessions should be introduced for airports in western or other poorer regions he said.

Nantong Airport near Shanghai and Tianjin Airport near Beijing could play better roles in accepting flights from overcrowded airports.

Ella Li Shurong, an analyst at Shenyin Wabguo Research Consulting said the government had realised that growth did not guarentee profit. "The profitability of existing airlines must be improved through controling the growth of the industry.

Mainland carriers returned to the balck in the first half of this year, reporting 2,36 Billion Yuan in net earnings from a 290 million loss in the same period last year.
Dan Winterland is offline  
Old 16th Aug 2007, 22:10
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the mainland had accumulated more than 80,000 flying hours with no accidents
I suppose some would consider this remarkable.
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