Grounded – Private Airlines Stifled by State-owned Players
With so many airlines operating in the PRC, private airlines find it hard to make profit amidst the many state-run competitors. In spite of liberalization, financing and cumbersome regulatory procedures have failed to produce a level playing field. To further enhance the aviation industry, these problems must be addressed in order to give private airlines more room to grow.
Date:
April 2008
Keywords (click to search): [aviation] [airlines] [monopolies] [flights] [CAAC] [fuel] [pilots] [congestion] [traffic]
The aviation industry in the PRC has been flourishing in recent years. The growth of the industry is partly due to the continuous positive prospects of the country’s economy, and partly to new regulations issued in 2005. Promulgated by the State Council, the Opinions on Supporting and Guiding the Development of the Private Economy1 opens the door to private capital players, permitting them to enter the aviation sector in the PRC. The government’s aim for this regulation was to limit monopolies in the industry while promoting private economic development. Since then, more than 10 private domestic airlines have been established, competing with the large state-owned carriers.
Yet problems emerge as the number of airlines increases in the PRC. While there is widespread acknowledgment of the growth of the Chinese aviation industry, little has been reported to highlight private airlines’ development in the country. In fact, facing competition from the giant state-run airlines, private airlines often struggle to stand out.
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