bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Annette Chiu

The possibility of allowing fifth-freedom rights at Shanghai Pudong Airport this year is unlikely, an official says

The Civil Aviation Administration of China (CAAC) yesterday dismissed reports that fifth-freedom rights would be granted before the end of the year to international carriers calling at Shanghai Pudong International Airport.

International relations director Wu Zhouhong described as 'inaccurate' remarks attributed to two CAAC officials  stating that Shanghai's passenger and cargo markets would be opened to foreign competition.

Mr Wu said CAAC had yet to receive a formal application from the Shanghai municipal government for permission to open China's commercial centre to foreign airlines wishing to move passengers and cargo on to third destinations.

While he said the regulatory body was open to the possibility, no timeline had been decided.

'The reports are inaccurate. Unlike Hainan, Shanghai is the biggest air-cargo market in China. There is a lot more to be considered. It's impossible for it to happen next year,' Mr Wu said.

In July, Hainan was made a testing ground for liberalisation in China, with the island province offering fifth-freedom rights that had yet to be taken up by foreign carriers.

Freight forwarders and shippers in Shanghai consistently complain about a shortage of capacity during the peak season, stirring speculation that CAAC may allow the city to liberalise its aviation regime and maintain economic growth levels.

Shanghai was the second-biggest exporting city in China in the first seven months, behind Shenzhen, with trade volume reaching US$26.4 billion, up 53.8 per cent year on year, according to the Ministry of Commerce.

Air-cargo volume in Shanghai rose 17.7 per cent in the first eight months to 960,000 tonnes, but further growth of international cargo could be capped by a lack of handling capacity.

A Shanghai-based freight forwarder who works for an international firm said cargo shipments were delayed for one or two days before being loaded on to an aircraft during the peak season, which runs from August to December.

But Mr Wu said granting fifth-freedom rights to international carriers would not help that problem because the international airport's handling capacity was already overloaded.

'Increasing flight frequencies to help cargo flow is not a consideration. The airport is full, there are scarcely any landing slots for newcomers,' he said.

The first phase of Pudong airport was designed with an annual capacity of 750,000 tonnes and 20 million passengers, according to its official Web site. Cargo throughput in the first eight months exceeded 810,000 tonnes, while passenger traffic reached 8.7 million.

Expansion of the airport will not start until next year, according to an architect bidding on the project.

Mr Wu said CAAC had to carefully balance the interests of the municipal government and domestic airlines, as an influx of foreign carriers would intensify competition.

China Eastern Airlines, one of the big three aviation groups in China, last month voiced its concerns in Hong Kong, saying hasty liberalisation would hurt the profitability of domestic carriers.

But regional carrier Shanghai Airlines said increasing competition could lower transport costs and facilitate trade flow.

An executive with the airline said the big players, such as Air China, China Southern and China Eastern Airlines, were well protected by the government.

'Airlines cannot rely on the government for protection. It's unrealistic. They should find ways to enhance their competitiveness. I think CAAC is getting more and more liberalised. It is a good development,' he said.



CAAC rejects liberalisation claims