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Volume 14,Issue 3 Autumn 2012

China Civil Aviation Development Forum 2009


The 2009 China Civil Aviation Development Forum was opened ceremoniously in Beijing, with the topic “Challenges and Solutions for the Global Civil Aviation Industry”. The forum lasted two days.
In 2009, the world’s macro economic situation is becoming more complicated than ever before. The financial crisis, initiated by the subprime lending crisis, is gradually producing impacts on the real economy. Weakened global economics induce significant decrease in the demands of the external market. The Civil Aviation Administration of China (CAAC) is suffering rare industrial negative growth due to, inflation, significant fluctuation of oil prices, credit squeeze, foreign exchange fluctuation, and sharp increases to the costs, which has not been experienced since prior to 1978. The global aviation industry has gradually become a whole of mutual benefits, which is going to survive the crisis and meet the challenges together. Therefore, focusing on “Challenges and Solutions”, this forum discussed the system to meet such challenges in management and technology innovations in the aviation industry, which have received public concerns. Important people in aviation industry attended the forum and gave speeches, including: LI Jiaxiang, Administrator of the CAAC, who gave a keynote address; YANG Guoqing, Deputy Administrator of the CAAC and the Forum Chairman, who gave the closing speech; WANG Zhanbin, Director General, Department of Planning & Development, CAAC; ZHUANG Wenwu, Director General, Department of Policy, Law, and Regulation, CAAC; WANG Zhaoming, Director General, Office of Aviation Safety, CAAC GAO Yi, Deputy Director General, Air Traffic Management Bureau (ATMB), CAAC. Taïeb CHERIF, General Secretary, International Civil Aviation Organization; Dorothy B. (“Di”) REIMOLD, Acting Administrator for International Aviation, FAA Olivier ONIDI, Senior Representative of European Union; LIM Kim Choon, Director General and Chief Executive Officer, Civil Aviation Authority of Singapore Yukio UMEMURA, Deputy Director of Flight Standards department, Japan Civil Aviation Bureau. 31 leaders and experts from the government, international organizations and the aviation industry gave excellent speeches. The Forum attracted more than 300 attendees from over 80 governments and enterprises from over 10 countries within Asia, North America, Europe and Africa. During the two-day Forum, the attendees discussed and communicated on the following topics: tendency of global economy development; influence of financial crisis on aviation industry; countermeasures of aviation industry to the financial crisis; aviation industry development and environmental protection; tendency and policies on China general aviation development; sustainable safety objectives, safety management of civil aviation and the combination of general and regional aviation; the development of low-cost aviation, and many other topics. The attendees agreed that the uncertainty of the financial crisis and global economy development, the significant fluctuation of crude oil prices, the increasing pressure from environmental protection and safety control, and other environmental factors are the biggest challenges in front of the global civil aviation industry. To guarantee the sustainable development of the civil aviation industry, we must constantly strengthen our communication and cooperation for long-term development, build a public aviation transport system, fasten the development of regional aviation, establish and improve state safety programs and safety management systems, and strengthen the development of general aviation. As the slowdown of the global economy, the demands of aviation transport is shrinking increasingly and the global aviation industry is stepping into the biggest development crisis since the Second World War. How to keep up the sustainable development of civil aviation is the common subject in front of the global aviation industry. To face the challenges of this crisis, the CAAC has put forward ten countermeasures, which provides solid foundation not only for China civil aviation enterprises to get through the crisis safely, but also for the sustainable safety and development of China’s aviation industry. Through the communication and discussion during the Forum, people are fully aware of that, in the future, the CAAC will expand their communication and cooperation with the global aviation industry, seek effective ways for mutual development and improving the competition of the CAAC, establish scientific outlook on development and promote the harmonious development of China’s civil aviation industry. During the Forum, Mr. Dan BRUTTO, President of UPS International, the contract carrier of the Beijing Olympics, said that, according to the statistics of the US-China Business Council, if China, the second largest aviation country in the world, can realize the national integration of air express, it can bring an extra investment of $3 billion to the major export industry, increase an industrial output of $84 billions and add 800,000 job opportunities in future five years. Mr. Dan BRUTTO also said that, in 2008, the cost of logistics in China accounted for 18.6% of the total GDP, however, in America, Japan and Europe, where the logistics industry is highly developed, the cost of logistics only accounts for less than 10% of the total GDP. Therefore, the development of unrestricted and integrated air express logistics industry can create value for China’s economy. At present, the GDP of the Bohai Gulf, Yangtze delta and the Pearl River Delta regions has accounted for 80% of the total GDP in China, 85% of gross foreign export value. The development of air express industry in above three economy circles can bring along the development of surrounding regions. “if the enterprises in Xi’an shares the same global express network with the ones in Beijing or Shanghai, the resource advantages and cost advantages in western China will not be dragged down by high transport cost and long transport time.” As the important measures of expanding domestic demand and increasing economic growth, the Chinese Government has put forward the development plans for the logistics industry: reducing the ratio between logistics cost and GDP, improve the logistics condition in western China, break the restriction of administrative regions, and promote the regional development of logistics according to economic zoning and the principles of the logistics industry. On the Forum, Mr. Randy TINSETH, Vice President of marketing of Boeing Commercial Airplanes, forecasted that in twenty years from now, the airlines in China will need 3,700 new planes, including Boeing 747 and larger planes, twin aisle planes, single aisle planes and regional planes. As the world’s most dynamic aviation market, China will need planes valued at $390 billion over next twenty years. Today, the airlines in China have 1,330 planes in service and the number will increase to 4,560 in 2027. According to the forecast, during that period, the annual growth in aviation industry is 5% and the annual growth in China will be 7.9%. According to the data of the CAAC, from 2000 to 2008, the passenger market of the CAAC has doubled and the number of jet planes in China has also doubled. Although the global aviation industry remains uncertain under the financial crisis in 2009, China is still the world’s most dynamic aviation market. When attending the 2009 China Civil Aviation Development Forum , LI Jiaxiang, Administrator of the CAAC, said that positive influences have been brought along by the measures of expanding domestic demand issued by the Chinese Government, and the airlines in China made a profit of 1.940 billion RMB from January to April this year. He also said that influenza A (H1N1) is still at its diffusion stage and its developing tendency is still unclear, which may product new effects on future aviation transport. In addition, at the same forum, YANG Guoqing, Deputy Administrator of the CAAC, said that the financial crisis has little impact on domestic air transport, but more impact on international passenger and cargo transport, which fell to the bottom in February, 2009. Evidence of slow recovery has identified, but it is difficult to make full recovery in a short time. Due to the slow recovery of international passenger and cargo transport, the total transport turnover volume will make a little increase this year. Before this, YANG Guoqing revealed that, at the first quarter this year, the profits and losses of China’s civil aviation industry is on par, with a profit of 1.65 billion RMB. The economic benefits turned better and the industry was at the stage of fast growth. Last year under the impact of the global financial crisis, China’s civil aviation industry was in the red. In the three biggest domestic airlines, Air China got a net deficiency of 9.256 billion Yuan, China Southern Airlines got 4.823 billion Yuan and China Eastern Airlines got 15.27 billion Yuan. The impact of the financial storm is not over yet, but influenza A (H1N1) has just appeared. The domestic civil aviation industry is still at danger after the great loss of last year. YANG Guoqing, Deputy Administrator of the CAAC, said that support on domestic civil aviation industry will need to be done more effectively. The growth in April is a little higher than expected YANG Guoqing explained, from January to April 2009, the total domestic transport volume is 12.69 billion ton-km, the passenger transport volume is 71.372 million, and the mail/cargo volume is 1.215 million tons, up 2.4%, 14.65% and -9.5% respectively over the same period last year. It is lucky that from January to April 2009, load factor of scheduled flights is 76%, up 0.4% over the same period last year. YANG Guoqing reminded that, because of the small increase in peak season (May to September) in last year, peak season in this year (May to September) will be expected to show a large increase. Paying the landing fee of small and medium-sized airports practically YANG Guoqing explained, to increase the amount of support for the civil aviation industry, the CAAC will put forward many measures to help airlines: three-year protection period will be granted to exclusively operated new routes; provide subsidies to special policy-related long-range international routes; continue to subsidize regional air routes, 100 regional routes from/to revolution historical sites, minority habitations, boarder regions, and poverty stricken regions will be given additional subsidies this year; encourage airlines to open more cargo routes and realize marketing operations in cargo transport. in addition, flight calibration fees will be waived in some airports; aviation fuel business surtax is waived, collected value-added tax on domestic-made aviation fuel used in international, Hong Kong/Macau flights will be returned to airlines; landing fee in some small and medium-sized airports will partially be paid by the CAAC. 10 billion RMB worth of costs has been reduced for airlines It is claimed that the ten measures put forward by the CAAC last year will reduce 10 billion RMB in costs for the airlines in this year. As introduced by YANG Guoqing, in the first half of 2009, airport fees will be used as the highest charge standard, airport landing fee cannot be improved, which helps the airlines save the cost by 1 billion RMB in the first quarter. By adopting various effective measures, the CAAC tries to reduce the average en-route and grounding time by 3 minutes for each flight, which saves 4.5 billion RMB. In addition, the CAAC has returned the Civil Aviation Government Funds collected in the second half of 2008 and the first half of 2009 to the airlines (total 4.29 billion RMB). Similar to the former two successful aviation forums, the excellent speeches by the important attendees in the global civil aviation industry, the deep thoughts aroused by attendees and extensive communications in the 2009 China Civil Aviation Development Forum will make great impact on both the domestic and foreign civil aviation industries.

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