There are 142 civil airports on China's mainland. But at least 60 per cent of them, mostly in the central and western regions, are not profitable and have to rely on government subsidies.

Experts attributed the poor performance of airports to insufficient market demand and fierce competition among airports in developed regions.

In the economically developed Yangtze Delta region, which covers Shanghai, Zhejiang and Jiangsu, there are 14 civilian airports. Only four are profitable, including two airports in Shanghai, one in Hangzhou and one in Nanjing, according to CAAC.

"There are already arguments whether there are more airports than are necessary in regions like the Yangtze River Delta," says Tang Qian, an analyst with BOC International (China) Ltd.

In the Yangtze River Delta region, there are 8 airports for every 100,000 square kilometres, compared to six airports for the same size in the United States.

The average in the country is 1.4 airports per 100,000 square kilometres, and 0.8 in northwestern China, according to a report by Intel-Create Information Consulting Company.

Therefore, foreign investment in the airports may not generate profits in the short term. However, such investments will be beneficial to the industry, say experts such as Xu of the Institute of Yangtze River Basin Development.

(China Daily 08/14/2006 page5)

(For more biz stories, please visit Industry Updates)