Regional drive gathers pace despite financial losses

Civil aviation is an expanding strategic industry in China, but little attention is paid to improving competitive effectiveness at airports

More than two-thirds of Chinese airports, mainly in the regions, lost a combined total of CNY2 billion (USD315 million) in 2011. Despite this, construction of new regional airports in China continues unabated, given that the government has dubbed the civil aviation sector as a 'strategic industry'. In May 2012 the government accelerated the approval process for capital transport projects, in effect giving the green light for more airport and rail projects to stoke a slowing economy.

Figures published by the Civil Aviation Administration of China (CAAC) and the International Air Transport Association show huge scope for Chinese airport and air travel expansion. The CAAC has said China will expand 91 of its 175 airports under the 12th five-year plan, a government blueprint for the 2011-15 period. That comes after Beijing spent CNY250 billion between 2006 and 2010 to build 33 new airports and renovate 142. The 12th five-year plan envisages a continuation of this surge, including construction of 56 new airports.

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