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CAAC to ease control on domestic air route operation right

By Xin Dingding (China Daily )
Updated: 2007-05-31 09:00

The civil aviation administration plans to lift its control over the domestic air route operation right by 2010, a senior official yesterday.

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Which means domestic airlines would not be required to go through the approval procedure and would only need to report the decision to fly on a certain route to the Civil Aviation Administration of China (CAAC).

This is one of CAAC'S moves to gradually ease its control over the aviation industry.

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.

"Liberalization of the air transport services is a global trend, and China will follow the trend while drafting international and domestic air transport policies," CAAC deputy director Yang Guoqing said in a statement posted on the administration's website.

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.

The European Union, Japan, Australia, Canada and many developing countries have followed that example, making it a global trend.

China that has the world's second largest air transport system is catching up with that trend, with the lifting of control over the domestic route another step towards that direction.

A CAAC document on deepening the reform in civil aviation says it should "be fulfilled in the later half of the11th Five-Year Plan(2006-10)".

"We have drafted an overall policy - strengthening safety control and gradually loosening other controls," Yang said.

Under the policy guidance, the CAAC has been trying to divert all kinds of capital into the air transport industry.

So far, some airports have adopted the registry-for-record system, and they include Wuhan in Central China's Hubei Province, where CAAC is running a pilot reform project.

But flights in and out of eight key airports - Beijing, Shanghai's Pudong and Hongqiao, Shenzhen, Guangzhou, Chengdu, Kunming and Dalian - as well those linking airports with the 15 largest passenger volume, are still under CAAC's control.

"The administrative control has curbed the development of the civil aviation industry," said Han Jing, senior assistant to president of Okay Airway, over the phone.

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

But a more important reason for the control is the protection it provided to air transport enterprises during its formative years, Yang said.

"The airlines then were smaller in scale and not mature enough to adapt to the market," he said. "But now the industry is maturing, and the firms have expanded, hence it's time to change the policy."

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.

Han agreed with them, saying Okay Airway welcomes the new policy because it will make trunk routes accessible to smaller airlines.

The first private airline to operate in China, Okay Airway today operates about 20 passenger flights. None of them, however, flies to Beijing, Shanghai or Guangzhou.