Outlook for China’s air transportation in 2007

China’s civil aviation industry will enjoy growth this year based on an economic forecast by the International Monetary Fund (IMF) and the International Civil Aviation Organization (ICAO). Last year, China’s passenger volume reached 160 million, an increase of 15.5 percent, and cargo and mail reached 3.49 million tons, up by 13.9 percent over 2005. According to the IMF, the world economy will increase by 4.9 percent and international trade will increase by 7.6 percent. It said multinational investment will still be active and regional economic cooperation will grow. ICAO says that this year world aviation passenger turnover will increase by 5.8 percent, reaching 4,177 billion passenger-km and, in 2008, will increase by 5.6 percent to reach 4,411.2 billion passenger-km. This year, the Chinese economy will develop rapidly with a total value of domestic production increasing by about 8 percent. Foreign trade will also increase with the expected import-export total value reaching US$ 2,000 billion, an increase of about 15 percent. The tourism industry will keep its comparable rapid development, with international tourists expected to rise by 4 percent to 129 million people, and domestic tourists reaching 1.5 billion people, up by 8 percent. By the end of 2006, the tourism destination countries and regions for Chinese civilians approved by the State Department reached 132. There are 86 destinations already implemented, and the number of overseas tourists will increase. The main advantage factors for Chinese aviation development in 2007 are: deepening civil aviation system reform, thus improving the “opening up” level; further embodiment of the airport localization, the improvement of the local government capability to build airports and their enthusiasm to develop civil aviation; the perfection of the aviation enterprises’ internal resources re-organization to improve their management capabilities, and enhance their competitiveness; and the market orientation of domestic air transportation pricing that will increase the market demand for air transportation. The disadvantages are: the rapid development of air transportation will increase pressure on safety; the infrastructure and air space resources in some regional airports and ATCs will not be able to meet the requirements for the air transportation development; the lack of special technical personnel in pilot and aircraft services; and the conflict between supplies and demands are notable. Air Transportation Development Forecast In 2007, the whole air transportation industry will experience a rapid increase. The expected overall turnover will be 35.2 billion ton-km, passenger volume will be 185 million people, and cargo and mail volume will be 3.9 million tons, increasing by 15 percent, 16 percent , and 12 percent, respectively. There are several policies to be implemented to enhance the growth of the air transport industry in China. One of these is optimizing the investment structure and enhancing the infrastructure construction. The CAAC will also efficiently use civil aviation funds to support underdeveloped regions and small and medium-sized airports. This year, the Chinese government will complete several airport expansion projects, including those at Huhhot Baita, Qingdao Liuting, Wuhan Tianhe and Zhengzhou Xinzheng. It will start the construction of new airports in Kunming and Lali, and expansion projects for Shanghai Hongqiao, Hangzhou Xiaoshan, Shenzhen Baoan, Changsha Huanghua, Chengdu Shuangliu, Xi’an Xianyang, and Urumqi Diwopu. It will also actively boost the pre-stage work of the construction for a new airport in Hefei, the flight area of Chongqing Jiangbei Airport, the terminal of Guiyang Longdongbao, and the expansion projects of Lhasa Airport and Nanchang Airport. It will also press for the expansion of Beijing Capital Airport, Tianjin Binhai, Shanghai Pudong, and Nanchang Airport. In addition, the Chinese government will also complete air route reconstructions for Beijing-Xiamen and Shanghai-Xi’an-Chengdu-Kunming; a home-made radar system in Changchun; and start the construction of a Chengdu area traffic center and a Xi’an area traffic center. It will also push for radar control projects in Shanghai ACC, Guangzhou ACC, eastern region and western air routes, and the civil aviation management center; reconstruction of the first phase of the Beijing air space and terminal area; and reconstruction projects for Shenzhen-Shanghai and Beijing-Shenyang air routes. The Chinese government will also continue to deepen the opening-up and reform policies, and accelerate industrial science development and carry out the “guidance on the deepening civil aviation reform” policy. It will further trim the responsibilities of the CAAC headquarters, regional bureaus and other offices; and will complete the ATC system’s separation of administration and business, and integrate reform. It will implement pricing reform in airports and amend the “domestic air transportation pricing reform solution” and release the “domestic air route pricing management methods” in order to perfect the domestic air passenger and cargo pricing management system. It will improve multilateral business involvements in ICAO and actively participate in the constitution of international civil aviation standards and regulations. It will also push for direct air transportation over the Straits. The Chinese government will push for research on China’s next-generation air transportation system. China will lead in using several new technologies such as green civil airport constructions, jumbo transport aircraft, and engine maintenance, and organize teams to tackle key problems. It will accelerate planning and construction of civil aviation safety test bases and boost the construction and management of scientific and technologic bases. It will also research and fulfill various strategic projects for the Olympics and enhance civil aviation safety management.