CAAC acts to stop slump in freight and international flights

"A 10 percent growth in domestic routes shouldn’t be a problem in 2009, but the performance of international routes would be worse and freight transport much worse," said Civil Aviation Administration of China’s deputy administrator Yang Guoqing, over the weekend during The Two Sessions.
Yang said that the CAAC is currently conducting research within various airlines and the industry in order to determine what favorable policies would be most effective in boosting growth. Meanwhile, CAAC Administrator, Li Jiaxiang, said he supports market-oriented restructuring among airlines and encourages the private airlines to focus on regional aviation to serve the secondary cities. Since the latter half of 2008, the domestic civil aviation volume has experienced decline from month to month. As a whole, domestic airlines have suffered losses of almost 30 billion yuan. Some of the airlines are at or close to 100 percent in liabilities. As an emergency measure, the CAAC has installed a civil aviation construction fund and encouraged airlines to put off expanding their fleets. This year, passenger traffic on domestic routes is expected to sustain a double-digit growth, whereas international routes and freight may continue to slide. But Yang also believes that the current sagging in demand for freight and international air routes is the biggest problem, one that is difficult to solve with policies. During The Two Sessions, airline officials have asked the CAAC for more Civil Aviation Authority for further support measures, such as cutting import tariffs and levies on fuels. Li also said the CAAC is coordinating among various departments, such as ministries of finance and taxation, in order to develop more measures favorable to the airlines. Because they are smaller, privately-owned commercial carriers bear the brunt of the global financial crisis. Li said that the CAAC will support mergers and reorganization and keep up its scrutiny of all existing carriers and their pace of fleet expansion. Li also said commercial carriers should focus more on domestic feeder routes because some of them often perform better than the more-competitive major routes.