China's aviation regulator is to further ease rules to promote the establishment of low-cost carriers (LCC), following complaints that restrictive policies make it impossible to operate a true budget airline.
Civil Aviation Administration of China (CAAC) minister Yang Yuanyuan said in an exclusive interview with flightglobal.com's sister publication, Airline Business magazine, that changes will include the opening of secondary airports as well as a further easing of pricing and route licensing regulations.
Several new passenger airlines have started operating in China since 2005 and all tried to adopt the LCC model successful in many other parts of the world. But they have complained about restrictions on which routes they can fly and what they can charge, as well as the high cost of operation at many airports.
"The complaints are fair," Yang admits. "The development of LCCs in China is still in the initial stage, and we admit that some small airlines still have fair complaints that they cannot be successful LCCs because of some of the policies and regulations."
Yang says that to support the development of LCCs the CAAC will be looking to open up secondary airports.
"We are exploring whether or not we can develop some secondary or tertiary airports near or around the large cities for them to use," he says. "For example we have some military airports, and maybe we can make them for both military and civil purposes."
Yang says a domestic traffic rights deregulation programme should also be fully in place by 2010, which will mean airlines will no longer need to seek permission to fly on specific routes.
"We are also making reforms in terms of the airport fees," Yang adds. "Our objective is that in the next five to 10 years we can change the airport fee regimes so that they can be compliant with ICAO standards."
Airfare pricing reforms will also continue to be rolled out gradually, says Yang, which eventually could enable airlines to set their own fares based on market forces.
But while more choice is good for the market, he says, there are once again too many carriers in China. "We will not accept new [licence] applications now. Maybe again later, but not now," says Yang.
Source: Flight International
