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New fund changes financing of aviation

New fund changes financing of aviation

Updated: 2012-04-18 07:35

By Xin Dingding (China Daily)

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The Ministry of Finance has set up a new government fund to collect money for civil aviation development, but has abolished two charges, so the move will not affect air travelers' costs.

The move, announced on Tuesday, allows the authorities to use the money on more than just infrastructure construction, and spending will be more strictly supervised, experts said.

According to the interim measures on collecting, using and managing the Civil Aviation Development Fund, passengers flying on domestic flights will pay 50 yuan ($7.93) each per trip, starting this month.

Those on international and regional flights will pay 90 yuan, which includes a 20-yuan contribution to the country's tourism development fund.

At the same time, passengers will stop paying the airport construction fee (50 yuan domestic, 90 yuan international) and airlines will no longer have to pay into the Civil Aviation Infrastructure Construction Fund.

Passengers' payments to the new fund will continue until the end of 2015.

"The new move will not increase travelers' costs, but it has its significance," said Li Xiaojin, a professor at the Tianjin-based Civil Aviation University of China.

The previous airport construction fee was collected and used by the Civil Aviation Administration of China, but now it is collected by the Ministry of Finance.

"It means that usage of the new fund will be submitted to the National People's Congress, the country's top legislature, for review. How the money is used will be more strictly supervised than before," he said.

The change of fund names also signals a change in how and where the fund can be spent, he said. For example, the fund can now be used to develop energy conservation and emission-reduction measures. The airport construction fee was set up in 1992 when the government was short of money to pay for airport security facilities, among other things.

It first charged each passenger 15 yuan, and this was raised in 1995 to the current fee of 50 yuan on domestic flights and 90 yuan on international.

As the government's fiscal revenues sharply increased in recent years, many questioned whether the fee should still be collected.

Ye Qing, an NPC deputy and the deputy director-general of Hubei Provincial Bureau of Statistics, has recommended for years that the government abolish the 20-year-old airport construction fee.

"The fee was originally collected to support the construction of airports when the government was going through a hard time, and we all had to make some contribution. But, in recent years, it has only contributed a little to public fiscal revenue," he said.

China's fiscal revenue reached 10 trillion yuan last year, of which the airport construction fee is estimated to have contributed about 15 billion yuan.

"The money collected accounts for only a trivial percentage of the total revenue. Collecting the money, as well as all the accusations and complaints, is not really a good deal. The government should cancel it, which would benefit the people and ease the financial burden of passengers," Ye said.

Apart from the new fund, passengers now also have to pay a fuel surcharge, which varies in line with oil prices.

Netizens generally expressed disappointment over the new civil aviation measures and complained about the extra fees when buying air tickets.

Some asked the authorities to use the money to improve services and reduce flight delays.