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Carriers will be given access to second-tier mainland cities so long as they first make a stopover in the southern province

China's aviation regulator has announced that it will give foreign carriers access to second-tier cities on the mainland without formal air traffic rights, provided they stop over in Hainan.

The aggressive move would liberalise the aviation sector and  boost economic development in the island province, an official from the International Relations Department with the General Administration for Civil Aviation of China (CAAC) said.

'It's a breakthrough for the aviation industry on the mainland,' the official said.

'Hainan is the testing ground for liberalisation and we want to attract airlines to fly there.'

International carriers have been permitted to fly to Hainan en route to third countries since July last year but none has applied to do so.

'Granting the access to other mainland destinations will help attract foreign airlines,' the official said.

In addition to China's three principal airport hubs - Beijing, Shanghai and Guangzhou - foreign carriers can now operate up to seven flights weekly to any mainland destination via Hainan.

The decision enables foreign carriers to skip the onerous process of applying for formal air traffic rights. They now need only  apply for an operating permit from CAAC to procure permission to land at any mainland municipal airport.

The Hainan provincial government and the municipal authorities of Haikou and Sanya have sweetened the pot with tax subsidies for foreign carriers using provincial airports.

Officials are playing down the impact the move may have on Haikou-based Hainan Airlines.

'I don't think it will pressure [Hainan Airlines],' a CAAC official said. 'The plan was not opposed by any party.'

Although the latest move marks a big step towards a more liberalised aviation regime on the mainland, industry experts are sceptical.  Gilbert Chow, a vice-chairman of the Board of Airline Representatives, said a stop in Hainan might not be feasible for international carriers. .

'It's a surprisingly liberal move,' Mr Chow said. 'But airlines have to study hard to find ways to benefit from it. For some airlines, the routing [via Hainan] is circuitous and doesn't make sense.'

There is little existing traffic between Hainan and onward cities,  and foreign carriers would face stiff competition.

'The limited traffic may not justify a high frequency between [Hainan and other] mainland cities. It's not easy for international players to tap the domestic market,' Mr Chow said.

BOC International transport and logistics research head Michael Chan said some airlines from countries to the south of China might find the routing acceptable.

Mr Chan said carriers such as Qantas Airways and Singapore Airlines might consider stopping over in Hainan before flying on to other cities with strong cargo demand, such as Nanjing and Suzhou, as an economical alternative to negotiating traffic rights in those cities.

'It's a piece of good news that will benefit Hainan Meilan Airport. But the impact on airlines should be studied further,' Mr Chan said. 'Flying via Hainan seems alright for carriers from the countries in the south. It may be worth a try.'



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