Aviation News
- Air pact opportunity for airlines
Date: 29-May-2007 Sources: (Shenzhen Daily)
DOMESTIC airlines should use the opportunity of additional passenger routes between China and the United States to strengthen their competitiveness, China's civil aviation chief said, as the number of China-U.S. air routes are set to more than double by 2012.
Yang Yuanyuan, minister of the General Administration of Civil Aviation of China, or CAAC, said China hopes the United States will streamline visa procedures for Chinese nationals traveling to the United States to support balanced development of the U.S.-Sino civil aviation market, according to a statement posted on the regulator's Web site.
Under the new agreement, which amends a 2004 bilateral pact, the number of passenger air routes between the United States and China's eastern region will increase by 70 flights per week for each side between 2007-2012, the statement said.
It said the direct air market between Central China, namely the provinces of Anhui, Hunan, Hubei, Jiangxi, Henan and Shanxi, and the United States will be fully opened as well under the revised pact.
Both sides agreed to start negotiations about full liberalization of the U.S.-China air-passenger market in 2010, but the two sides would transition to full liberalization of the air cargo market in 2011, the CAAC said.
In statements issued last Wednesday, the U.S. side said by 2012 there will be a total of 23 passenger flights per day by U.S. carriers on routes to Beijing, Shanghai and Guangzhou, up from 10 now, and that the United States could grant a new airline the right to fly to China and approve a new route this year.
An official in the CAAC's international department said Thursday seven Chinese air carriers now operate routes to the United States.
Air China Ltd., China Eastern Airlines Corp. and China Southern Airlines Co. operate passenger routes, while Shanghai Airlines Co. and three air-cargo carriers operate cargo routes between China and the United States, the official said.
Some analysts said the revised pact is positive for domestic airlines given China's rising domestic demand and its strong gross domestic product expansion, which in the first quarter hit 11.1 percent from a year earlier.
'Air traffic is underpinned by air travel and business travel and that's in line with gross domestic product growth,'said Michael Wu, airline analyst for Fitch Ratings in Hong Kong. 'We are pretty sure trans-Pacific flights are on the upside.'
He said more demand is likely to come from Chinese going to the United States and they are likely to prefer riding on Chinese airlines.
The long-term trend for a strengthening yuan also works in favor of tourist travel from China to the United States, said Li Shurong, airline analyst with SYWG Research & Consulting in Shanghai.
Li expects growth in China's international air routes to average about 16 percent in the next five years, and will likely be stronger for the 2008 Olympics in Beijing and the 2010 World Expo in Shanghai.
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