China's domestic civil aviation market booming

Considering the peak season of July, August and September is just arriving, China's civil aviation market will thrive in the second half, pushing the entire year's growth of domestic passenger transport to over 20 percent, said Li Jiaxiang, director of the Civil Aviation Administration of China (CAAC).

In the first half of 2009, China's domestic civil aviation sector saw its passenger transport grow by 20.4 percent, a figure that surprised the market. Not only is such a rapid growth better than expected, it is higher than the same period in 2007 when the economy was faring well.

The latest data shows that in the first half of 2009, the entire civil aviation industry reported a total transport of 19.19 billion ton-kilometers, 107 million passengers, and 1.89 million tons of cargo. Of these, domestic passenger transport showed rapid growth, up 20.4 percent year-on-year. In particular, the volume of domestic passenger transport between January and June showed an upward trend. The growth rate reached around 15 percent during the first three months, and accelerated in the following months, jumping to 26 percent in May, the highest in recent years. Due to booming demand, airlines have transferred part of their international aviation capacity to the domestic market. Chinese carriers also canceled 4,711 scheduled domestic flights during the first half of this year.

Why has domestic passenger transport increased so rapidly? An official from the CAAC offered an analysis, saying that, firstly, the domestic economy is steadily picking up and driving a continuous growth in domestic passenger transport.

Secondly, to cope with the impact of the global financial crisis, the civil aviation industry has introduced a series of stimulus measures with noticeable effects. The measures include refunding certain levies to reduce business transportation costs and increasing subsidies for western air routes. These measures have improved the environment for the civil aviation industry, and played a positive role in stimulating the industry's recovery.

Another important reason is that the drastic decrease in plane ticket prices has boosted the demand for domestic aviation. Ticket price statistics for the first five months show that the net profit for domestic air routes stood at 0.53 yuan per passenger-kilometers, a drop of nearly 20 percent year-on-year.

Regarding the trend in the second half, Li said that domestic passenger transport is expected to continue a high-speed growth, and domestic cargo will follow, but profits for the entire civil aviation industry are not optimistic.

Li added that expanding the international transport market is the industry's priority for the second half. During the first six months, the total transport volume for international routes dropped by 17 percent. The CAAC will adopt policies including special subsidies for international long-haul services to gradually recover international civil and cargo transport.

By People's Daily Online