China's Year Ahead

    Following the remarkable achievements by China’s civil aviation industry in 2006, Civil Aviation Administration of China (CAAC) plans to continue and guide the development of the industry in 2007.
     Just what is in store was revealed late last year at The National Civil Aviation Work Conference offering clear guidance to what lies ahead. The CAAC plans include harmonizing security, speed, quality and profits, with an eye toward achieving better and quicker development.
     Looking back and ahead CAAC notes that 2006 was “free of air accidents and the year unfolded amidst favorable security conditions”.
     “Total volume of air cargo transported in 2006 at 30.2 billion tons, represents a 15.7 percent growth rate year on year.”
     “Passenger volumes reached 160 million.
     Mr. Yang Yuanyuan, Director of CAAC, delivered the Annual Work Report for the fifth time since he moved from the left seat in a B747-400 to his current position.
     “From January to November, China’s civil aviation industry achieved gross revenue of USD 26.73 (RMB208.4) billion, and net income of USD 1.15 (RMB9.01) billion, while domestic airlines earned gross revenue of USD 18.8 (RMB146.7) billion, and net income of USD 0.6 (RMB4.73) billion, USD 0.27 (RMB2.14) .”
     “Spring Airlines had the highest rate of seat occupied (rpk) on domestic routes at 95.3 percent, while Air China leads the rate of seats occupied across international routes and the Hong Kong-Macao courses, at 75.9 percent and 70.3 percent respectively.”
     Spring Airlines is the first private-invested airlines and also the first low-price airline of China, currently operating four A320s.
     “China National Aviation Holding Company is the most profitable airline of China, with USD 0.5 (RMB3.97) billion net income topping all airlines.”
     China National Aviation Holding Company owns over 130 subsidiaries in China with Air China flagship of the company.
     Capt. Yang Yuanyuan General Administration of Civil Aviation of China knows the airline business from the inside out.
     Winner of Flight Safety Foundation award in 2004 for Outstanding Achievement In Safety Leadership Captain Yang was recognized for leadership in the development by the General Administration of Civil Aviation of China (CAAC) of a 10-year plan that significantly promoted the establishment and improvement of an effective safety-regulatory framework and safety-management system that has now established China’s position among leading aviation nations.
     Capt. Yang began his aviation career as a student, flight instructor and flying team deputy chief at the China Civil Aviation Senior Flying School.
     He later was a line pilot, chief pilot and vice president of China Southern Airlines.
     He served as a CAAC flight inspector and director general of flight standards before being appointed in 1999 as vice minister in charge of safety and in 2002 as minister of general administration.
     A flight instructor for more than 10 years and type-rated in several airplanes, Capt. Yang remains current in the Boeing 747-400.
     Capt. Yang has fostered a safety management philosophy at CAAC based on organization and leadership, rules and regulations, supervision and inspection, education and training, and system improvement.
     Capt. Yang also pointed out problems of China’s civil aviation industry:
     “Security mandates still do not fit well with the rapid growth of air transportation in China.
     “Service quality and profits are still relatively low with delayed fights still quite common.
     “CAAC insists on better punctuality of our flights in 2007, with strict attention and action to achieve that goal including shutting down airlines with unacceptable punctuality rates on some routes.”
     “Since 2000, China’s civil aviation industry has entered the rapid development stage.
     “So far, there have been five private-invested and six joint-venture airlines operating in China, with overall about 39 aircraft.
     “In 2007, CAAC will continue loosening restrictions on doing business here. “Except for supervision over gross flights volume at eight major airports, other airports will allow operators access to provide start up services.”
     The eight supervised airports include Beijing Capital Airport, Shanghai, Pudong and Hong Qiao airports, Shenzhen, Guangzhou, Chengdu, Kunming, and Dalian.
     “New measures are being issued to promote the development of regional jet services.”
     Another challenge Mr. Yang mentioned:
     “According the schedule, in 2007, 130 incremental aircraft will join China’s airlines, raising the concern about oversupply in the industry.
     “As more services are offered, this also will increase the pressure on security and airlines’ profits.”
     About goals of China’s civil aviation industry, Mr. Yang said:
     “We expect gross investment on fixed assets to be USD3.3 (RMB26) billion in 2007.
     “Target volumes in 2007 for total air transportation, passenger transportation and cargo and mail transportation are 34.8 billion tons, 187 million and 3.85 million tons respectively, with annual growth rate expected to be 15 percent, 16 percent and 12 percent.”
David