Beijing mulls buying out small airports

Charlotte So

Beijing is considering buying out the nation's small airports or increasing subsidies to those that handle fewer than 500,000 passengers a year to help cut economic disparities between western and eastern China.

'One of the main challenges curbing the development of Chinese airports is the uneven passenger distributions,' Shao Daojie, a deputy director-general at the General Administration of Civil Aviation, said yesterday on the sidelines of the Asian Aerospace conference in Hong Kong.

The aviation industry accounts for about 33 per cent of global trade, according to Andrew Herdman, the director-general of the Association of Asia Pacific Airlines. Airports serve a crucial role in the economic development of a nation and region.

'We are rethinking the nature of an airport, whether it is a utility or a business,' Mr Shao said. 'There is still some debate in China.'

He said Beijing tended to eye airports as utilities.

On average, the central government owns about a one-third share in most small airports, with local governments and private entities controlling the rest. Increasing government subsidies to small airports or buying them outright could help small airports survive, Mr Shao said.


'About 75 per cent of the mainland's [147] airports lose money,' he said. About 91 per cent of small airports with fewer than 500,000 passengers a year run deficits.

Most of the smaller airports are in rural areas in western, northern or central China. It is not uncommon for those small airports to lose 10 million yuan to 20 million yuan a year, he said.

China's big airlines focus on developing new routes to major airports such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Kunming, leaving second and third-tier airports underserved.

Seven of the biggest airports handle 54 per cent of total passenger volume in the country. But these top seven, which each handle more than 10 million passengers a year, account for only 5 per cent of the total number of airports in the country.


China, which has the world's second-busiest skies, has earmarked 140 billion yuan for airport expansion. The central government is considering increasing the number of airports to 190 by 2010.