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Volume 14,Issue 3 Autumn 2012

CAAC issues new decree on general aviation


China is realizing the importance of general aviation to its economy as the Civil Aviation Administration of China issued a new decree that expanded the types of GA activities that can operate in the country. CAAC Decree 176, or the General Aviation Business License Operations, came into effect last February 14, with the aim of strengthening the GA industry and promoting aviation safety in China. The CAAC will be the regulating body that will issue business licenses to individuals and enterprises planning to engage in any GA-related business. All are mandated to follow state laws and administrative rules and regulations on civil aviation. GA businesses are organized into three categories. Comprising the first category are land-based and offshore oil services, helicopter loading, artificial precipitation, medical service, aerial prospecting, air tours, business flights, private or commercial flight training, helicopter guidance, business aircraft operators, air taxi and charter flights. The second category includes aerial photography, aerial advertising, marine monitoring, fishery, weather detection, scientific experiments, urban fire fighting, aerial observation and patrol. The third category is comprised of air seeding, fertilizing, spraying, insect control, weed control, plant disease control, animal pest control and forestry service. The new decree recognizes and specifically defines all types of GA activities that can be operated and be made legal in China. Previously, only a handful of GA operations in China were recognized and given approval by the government. Business aviation, aviation clubs and flight training were not widely developed despite a growing trend worldwide. Article 6 of the decree mandates that all GA enterprises should promote economic development, and protect the environment and public interest. Besides complying with laws and regulations, they should also adhere to the principle of coordinated development and meet flight safety requirements. China needs to catch up with the worldwide growth of general aviation. In 1951, the first GA flight team was organized in China. At the end of 2005, China has 70 GA organizations and 615 aircraft serving GA comprised of 491 fixed-wing aircraft and 124 helicopters. In comparison, the General Aviation Manufacturers Association (GAMA) says of the more than 320,000 GA aircraft in the world, 224,000 are based in the United States, which accumulated 27 million flight hours last year and carried 166 million passengers. Employment in the US general aviation industry reached 1.2 million as of last year. Those applying for a GA license in China are required to submit a feasibility study, which includes market analysis, base airport and other facilities, aircraft, sources of aviation personnel training, operational reliability of technical expertise and economic forecast. Foreign investment in general aviation in China is allowed. Joint ventures in business aviation, air tours and industrial service are allowed, but majority shares shall be held by a Chinese party. Aviation clubs are allowed to operate in non-urban areas, and are required to comply with relevant aviation rules and regulations to ensure safety. A written agreement on compensation for personal injuries is also required, and no minors will be allowed to participate in club activities without parental consent. The CAAC is committed to developing China’s GA industry. It expects GA to grow at an annual average of 10 percent until 2010, when hours flown should reach 300,000. Business aviation, air tours, flight training and private entertainment flights are expected to grow driven by strong economic growth and the rise in per-capita income in China. While commercial and general aviation operate at totally different airspace, except for business jets, the process is tedious for a GA operator to get a flight plan approved by the military. More often, getting a permit is difficult and time consuming. Without a flight plan, the GA operator’s business will be severely affected by the loss of revenues resulting from delays and cancellations. Today, all airspace outside the 29 commercial air routes operated by the CAAC is under military supervision. China needs to streamline its approval process or decentralize its supervision of the general aviation in order to attract more players in the market. The Chinese government, for instance, supports the establishment of a GA association that will coordinate and regulate the industry. This will improve the GA market especially with the expected growth of GA aircraft and activities in China in the next five years. Based on data from the International Civil Aviation Administration, GA hours flown in China totaled 176,000 in 2005. Of this total, aerial work accounted for 47 percent; instructional and training, 49 percent; and business and entertainment, 4 percent. Total revenue from GA operations in China reached US$140 million in 2005. In its outlook, GAMA says general aviation will have a strong market growth worldwide this year because of an expected growth in real gross national product in China, India and Russia. “Each of these nations comprises a large land mass where general aviation can play a major role in robust economic activity,” according to GAMA. CAAC sees GA as a major player in agriculture, forestry, fishery and environmental protection with China’s huge land area and population. But China needs to build more airports for general aviation. By the end of 2005, there were only 68 fixed and 329 temporary airports for general aviation. With the new regulation, China has shown that it is giving importance to the huge potential that general aviation has. In order to make a steady drive towards growth, policies should be eased to benefit GA operators including the flight plan. The GA airspace should be opened wide enough to accommodate the players. Prospective investors in the general aviation are unlikely to provide support if they feel that existing policies would only hinder the expansion of their business. While much has to be done to improve the state of general aviation, China has at least realized that GA will play a huge part to sustain its economic growth.

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