New aviation sector awaits competition
By Guo Zi (China Daily)
Updated: 2004-07-10 09:04

Management of the four airports in Northwest China's Gansu Province was finally handed over to the local government on Thursday.

By doing this, the General Administration of Civil Aviation of China (CAAC) lowered the curtain after 28 months of reform of the aviation sector.

So far, the former nine aviation companies and four service companies have been regrouped into six group enterprises. Except the airports in Beijing and Tibet,90 airports previously controlled by the CAAC have been handed over to local governments.

The CAAC is no longer taking care of the enterprises' profits and losses and now concentrates on general market regulation, security supervision and air traffic management, as well as public relations.

Then what has the reform brought for the general public, for whom ticket price and service quality are the major concerns?

A regulation on the pricing of flight tickets took effect on April 20, allowing greater fluctuations in pricing depending on market demand. Another equally welcome step - a "Punctuality Plan" - was launched at the same time. Both show that industrial authorities have reacted positively to rising consumer complaints about fixed ticket prices and calls for better service.

The market is now playing a much bigger role in the once highly monopolized aviation sector.

Competition has injected vigour into the sector and the reform seems to produce an inspiring result. According to the latest CAAC statistics, during the first five months of the year, the civil aviation sector saw a total turnover of 58.86 billion yuan (US$7.1 billion) with a profit of 4.63 billion (US$559 million), which is said to be the sector's first large-scale profit gains in recent years.

But time is still needed to test the overall effects of the reforms. And further improvements should be made.

The CAAC should urge airlines to make out their detailed criteria for distinguishing human from non-human factors as well as compensation standards under the "Punctuality Plan."

The package of reforms has come to a conclusion but the work to win out in the market should never end.

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