Troubled mainland airports seek help

Faced with a lack of passenger traffic and struggling to stay afloat, the facilities are asking for state assistance to develop their flight networks

PUBLISHED : Tuesday, 22 January, 2013, 12:00am
UPDATED : Tuesday, 22 January, 2013, 4:12am

Mainland airports are banking on local government subsidies to stay afloat as 70 per cent remain in deficit.

The four billion yuan (HK$4.98 billion) Jieyang Chaoshan Airport, which opened at the end of 2011, is seeking state help to develop its flight network, a spokesman said yesterday.

Like other subsidiaries of Guangdong Airport Management, Chaoshan Airport is struggling to make ends meet as most airlines choose to land at the bigger Guangzhou Baiyun International Airport.

The proposed Aviation Development Fund, which will be funded by the Shantou and Jieyang governments, was to boost more flights to Chaoshan Airport by handing out cash incentives to the airlines, the spokesman said. Last year, just five new routes were added as no subsidy was provided.

Interest expenditure and depreciation dented the bottom line of Chaoshan Airport, which reportedly posted 400 million yuan in losses last year.

"We are in the red but we don't have the exact figure now," the spokesman said.

The airport, which handled 2.1 million passengers last year, ranked 46th of all mainland airports in terms of traffic. The remaining 134 smaller airports in the country are finding it harder to stay afloat as their passenger volume hardly reached one million per year each.

In Jiangsu, nine of 13 airports in the province were in deficit, a report by Guangming Daily said.

To boost traffic at underused airports, local governments were encouraging different departments to hold delegation tours, the report said. Some even set charter flight quotas for officials to meet.

One of the smallest airports in the province, Yancheng Airport, handled only 300,000 passengers a year, with most of the traffic related to official or industrial delegations, it said.

"An airport is a public facility and it means more than profit and loss," said Chen Xiaoning, a vice-president of Guangdong Airport Management. "It's pointless to focus purely on their profitability."

Three of the four airports supervised by Guangdong Airport Management are making losses. Baiyun Airport is the only one that is profitable. The company also manages Meixian Airport and Zhanjiang Airport.

Still, local governments are keen to invest in airports as they believe they can bring in travellers, cargo and capital, which in turn will boost their economies.

Under the 12th five-year plan to 2015, the mainland will build 56 airports, relocate 16 and expand 91 at a cost of 425 billion yuan. That was a concern as most of the airport investments were funded by bank loans while 70 per cent of them were not making a profit, a consultant said.