Airline profits soar this year
By Cao Desheng (China Daily)
Updated: 2004-07-27 01:43

China's civil aviation industry witnessed a profit surge in the first half of this year -- the biggest jump since 1997.

Statistics from the General Administration of Civil Aviation of China (CAAC) indicate that at the end of last month, aviation profits grew to 5.17 billion yuan (US$ 630 million). The profit two years ago was just 770 million yuan (US$ 93 million).

Because of the SARS (severe acute respiratory syndrome) outbreak last year, the industry saw a loss of 3 billion yuan (US$363 million).

Except for China Post Airlines, domestic airlines earned a profit of 3.24 billion yuan (US$ 391 million) in total, four times the number they earned in 2002.

While working to reduce costs, the nation's airports also made a profit of 1.21 billion yuan (US$ 146 million), five times what they earned two years ago.

The nation's civil aviation sector is ushering in a new round of rapid growth, CAAC's director Yang Yuanyuan said.

Experts attribute the rocketing of the nation's air transport industry to the rapid growth of international trade and business, which has become a momentum for profit growth in air cargo transport.

Meanwhile, occupancy rates for passenger flights have increased, amounting to about two-thirds of seats available, said Tian Jing, a professor with China Civil Aviation Cadres Management College.

Currently, a lack of planes, which also results in annoying flight delays, has become a major restraint to rapid development of the nation's aviation industry, he said.

China's total passenger volume is expected to rise by 28 per cent, reaching 112 million this year, the CAAC estimates. Air cargo transport volume will amount to 2.66 million tons, a rise of 21.5 per cent from last year.

Behind the booming aviation market still remains some in-depth contradictions in the development of the industry, Yang stressed at a seminar for civil aviation officials last week.

"The construction of air infrastructure lags behind the rapid growth of the sector, while existing management systems fail to adapt to industry operations," Yang said.

In the meantime, the current air services can't meet the increasing public demand, he added.

Measures must be taken to resolve the imbalance between passenger and cargo transport, main lines and regional lines, air transport and general aviation, domestic and international air transport as well as the transport needs in the nation's east and west, Yang noted.

On the other hand, some domestic airlines are often criticized about considering their profits more than services. Delayed flights top the list of air passengers' complaints.

Some even refuse to board the plane or bicker with air staff when compensation is not available in the wake of delayed flights.

According to a document issued by CAAC last month, airlines should compensate affected passengers for delayed or over-booked flights if the trouble is the airlines' responsibility.

However, most domestic airlines, including Air China and China Southern Airlines, have not laid out detailed rules on compensation when flights are delayed or cancelled, except for Shenzhen Airlines.

The most controversial provision is stating whether a flight is delayed for reasons outside the airlines' control.

Experts say there should be a kind of arbitration agency within the industry to judge complicated circumstances.

While urging airlines to improve their services and make their flights operate as scheduled, the CAAC also has warned air passengers not to take extreme actions in safeguarding their rights in case of delayed or cancelled flights.

As a major move to make passengers trips more convenient, the CAAC announced yesterday that airport construction fees will be included in air fares starting September 1.

From August 1, travelers who book air tickets for flights post-September 1 will find a new charge item for airport construction fee on the tickets, which will save time and effort after buying tickets.

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