Industry News

      Li Jiaxiang, chief of the Civil Aviation Administration of China (CAAC), stated at this year’s Two Sessions that there are 2,800 counties in China. A huge economic growth point will be generated for infrastructure if every county has a general airport, the official Xinhua News Agency reported. It means that a blueprint of connecting the 2,800 counties in China with general airports emerges officially, the official news agency said.

      Such a large-scale construction idea has drawn wide attention. When will the construction of general airports usher in an explosive growth period? Do the 2,800 counties all have demand for the construction of general airports? Is an investment boom coming or not? Where does the money come from? Reporters from 21st Century Business Herald learn that Mr. Li did the speech at the Aviclub Flight Carnival 2015 held by Aviation Industry Corporation of China, but made no mention of special plans.

      21st Century Business Herald learned that the total number of general airports will exceed 2,000 by 2030, based on the CAAC’s layout plan for general airports. In terms of first-tier provinces and cities, Zhejiang, Jiangsu, Fujian, Jiangxi and Chongqing all have put forward and even promulgated general airport plans. In addition to existing ones, China is expected to set up 1,600 general airports over the next 15 years.

      To this end, the CAAC delegated the management of examination and approval for general airports in 2015 to provinces to further relax the approval process and cities as well as local civil aviation authorities, stating that it was working on policies in such aspects as flight regulations and capital. Yet, insiders from the general aviation industry warn that despite the low threshold and huge potential, the construction of general airports still faces a series of problems like airspace limitations and capital handicaps in the near future.  

The Number of General Airports Lags behind that in the U.S. 

      Ji Jiaxiang detailed the idea of getting counties connected at the Aviclub Flight Carnival “Two Sessions of Night” held by Aviation Industry Corporation of China on March 11. Li said there will be 2,800 general airports and RMB 280 billion will be generated if every county has one. Plus the construction of other supporting facilities, the huge infrastructure project will create new momentum for China's economic growth.

Does China really need so many general airports? Where does the capital come from? Many doubts came after the news.

      However, according to the statement seen by 21st Century Business Herald, Li made no mention of specific plans for the 2,800 airports, but stressed the great potential of general aviation construction. The news outlet learned that the CAAC predicted in a blueprint for building general airports that around 2,000 general airports would be built in China, but the deadline of the plan would last till 2030, namely a period of 15 years.  

      The number of general airports in China is not large now. According to the country’s statistic yearbook, China had 2,853 county-level administrative divisions (including municipal districts and county-level cities) in 2013, versus only 399 general airports and temporary landing points. In the view of Li Jiaxiang, only 78 were really presentable. If existing landing points are counted in, China needs to set up more than 1,600 new general airports in the coming 15 years as planned, namely over 100 ones per year on average.

      Meanwhile, the number of general airports in the U.S. is dozens and even hundreds of times as large as that in China. Peng Jianwu, chairman of Southern China Aviation Industry Aviation Industry (Group) Co., Ltd., expressed at the Aviclub Flight Carnival “Two Sessions of Night” that the U.S. now has about 20,000 general airports. The specific number offered by relevant directors of Silk Wings Aviation specializing in cross-border aviation M&A business is more than 19,000, of which more than 500 are open to the public. Apart from 378 airports with a passenger capacity of more than 100,000 people, the rest are regarded as general airports to meet demand for medical rescue, law enforcement of military police, business traveling, development of agriculture and forestry and basic mobility, making the general aviation industry contribute 1% to the full-year GDP in the U.S.

      The gap between the two countries allows industry observers including Li Jiaxiang to predict huge potential in China’s general airport and general airport industry, but this point has not been fully acknowledged. Relevant directors of Silk Wings Aviation noted that among the more than 5,000 airports open to the public in the U.S., 3,300 are totally funded and maintained by the government. 

Barriers Remain to Be Broken for Construction of General Airports 

      The State Council delegated the power of building general airports to local governments when revising the catalog of a batch of investment projects approved by the government last year. At present, if investors want to build general airports, they just need an approval of provincial and municipal local governments. In terms of location, they only need a nod of county-level governments. Previously, the approval of general aircraft had been delegated to local civil aviation bureaus to some extent.

      Policies related are gradually relaxed. Many enterprises show strong interest in the construction of general airports. The Aviclub Flight Carnival project of China Aviation Industry General Aircraft Co., Ltd. includes construction of key airfields and runways. The company has signed cooperation agreements with 19 cities in China.

The investment boom is reflected on investors’ increasing efforts in the construction of general airports at all levels.

      An expert in the civil aviation industry told 21st Century Business Herald that given the different levels of general airports, there are differences in airport construction investment. Initially, the grading followed the standards of passenger transport airports and the grades for aircraft areas, runway facilities and airport fire control were set. However, some local civil aviation bureaus started to agree with the pilot run of exclusive standards for general airports last year. After an inquiry, reporters found that it is relatively common for general airport runways to stretch for 800-1,000 m. The majority of investment in such airports ranges from hundreds of millions of RMB to RMB 2-3 billion.  

      The amount of investment depends on different levels’ airport construction requirements. An employee from a Shanghai-based general aviation company revealed to reporters that distinctive from temporary landing points, a general airport with complete facilities may need such facilities as runways, security-check systems, fuel supply, security protection, fire control, rescue, logistics, machine work, maintenance and office zones. “Despite a smaller scale than large passenger transport airports, a lot of supporting facility construction remains necessary.”

      Nevertheless, the blueprint of building general airports has not been issued. The location sites of the more than 2,000 general airports cannot be determined. The source of construction capital in such a large-scale plan is neither clear. Seen from the Aviclub Flight Carnival situation, Aviation Industry Corporation of China, which is attempting to fund general airports in partnership with local governments, has obtained bank loan support.

      For western regions highlighting mountains, airport construction may be a higher traffic pattern than railway construction in return on investment. Yet, most of existing general airports focus on eastern regions. 21st Century Business Herald found that these airports mostly appear in eastern provinces and cities like Beijing, Shanghai, Jiangsu, Zhejiang, Liaoning, Shandong, Guangdong, Hainan and Guangdong, but less in western regions vast in territory.  

      Anyway, these discussions on the construction of general airports all depend on the progress of opening up low-altitude airspace. China will fully promote the use of low-altitude airspace below 1,000 m on a trial basis, according to messages sent at a national low-altitude airspace management reform work conference at the end of 2015. Where this timetable can be realized on time and the opening up degree both affect the enthusiasm about the construction of general airports.

      Besides, Li Jiaxiang mentioned talent shortage. Data from the Civil Aviation Administration of China show that by the end of 2015, there had been merely 2,191 flight personnel in as many as 164 general and small transport airlines across China. Actually, the figure has been 100% higher than that in 2013.  

      Li Jiaxiang stated that the research on a series of problems such as laws and regulations, capital support and policy privileges is going on, expecting to provide complete support for the general aviation industry. After beginning to implement special financial subsidy policies on general aviation operators in 2013, the CAAC again offered subsidies of RMB 210 million to 79 qualified general aviation enterprises in 2015. Five of them even obtained subsidies of more than RMB 10 million.