http://www.atwonline.com/magazine/article.html?articleID=1532
With fewer than 200 airports certified to handle transport category aircraft,
China will have to move mountains of earth to ensure that ground infrastructure
keeps pace with the rapid development of air travel.
If China is to become the world's largest aviation market by 2020, it will
have to move mountains of earth to provide enough runways. The country has just
196 certified airports for transport aircraft and 329 "GA Temporary Landing
Points" to serve a population of just over 1.3 billion. By comparison, the US
with 270 million people has 14,807 airports, while Australia with just over 20
million has 444 and tiny Iceland has 100.
The challenge is not only to increase the number of airports but to improve
existing infrastructure as well. China has spent $30 billion since 1990
upgrading 90 landing fields and building 47 new airports. Currently, 133
airports are served by airlines. Of these, just 39 account for 93.5% of total
traffic while 85 handle fewer than 500,000 passengers a year, the majority
operating at a loss, according to CAAC.
To help fund the development of airports and improve their commercial
viability, CAAC transferred the ownership of 90 regional facilities to local
governments, giving them an incentive to invest ahead of possible privatization.
That process, which was started in 2002, was completed in July 2004 and involved
CNY40 billion ($4.96 billion) in assets and 50,000 staff. At the same time,
Beijing, Shanghai, Xiamen and Shenzhen were privatized and listed.
CAAC commenced construction on 35 new airports in 2004, 33 of them regional
facilities, and the Centre for Asia Pacific Aviation estimates that China will
have 240 commercial airports by 2010. It estimates further that the capital
needed to meet that infrastructure requirement will top CNY10 billion a year.
But as would be expected, development has not kept up with demand and CAAC
reports that 18 airports were at capacity by the end of 2005 and another 29 will
join them by 2010.
According to DG-CAAC Airport Dept. Zhang Guanghui, the problem lies not only
with the capital requirements of building airports but also a shortage of
suitable management. Zhang told delegates at an EU-China Aviation Summit last
June that the country's larger airports "are not strong enough to participate in
international competition" and smaller ones "are facing strong competition from
other transportation means." Despite those challenges, he is bullish,
forecasting that by 2010 the number of airports served by airlines will climb
from 133 to 160 and by 2020 there will be 200 such airports with total traffic
of 1.4 billion passengers and 30 million tons of cargo.
The cornerstone of CAAC's current strategy is developing Beijing
International, Shanghai Pudong and Baiyun International into internationally and
domestically important aviation hubs and centers for both passenger and cargo
operations. These airports are home bases respectively for Air China, China
Eastern and China Southern, the country's three largest carriers. CAAC also
wants Chengdu, Kunming, Xi'an, Wuhan, Shenyang and Wulumuqi transformed into
regional hubs. But while it may want to create a hub strategy, there are many
other factors at work, including unsuitable geographic location of key hubs;
hubs outside China becoming points of entry, permitting more direct flights; the
need for regional governments to attract airlines to justify infrastructure
development; emergence of both domestic and international low-cost airlines in
China; the growing role of regional jets, and the impact of regional cargo
airports.
To understand the dynamics of China, one must appreciate that the country is
made up of 11 ethnic groups living in 23 provinces within five autonomous
regions and speaking eight major languages. There are also vast disparities in
wealth, ranging from per capita GDP of $5,000 in Yuman Province to $40,000 in
downtown Shanghai.
Not surprisingly, many of the provinces with low GDP are areas of higher
population density. According to Airclaims' International Transport and Tourism
Consultancy's "2004 Airport Analysis," Henan Province in the central-east has a
population of 100 million but accounts for only 1.2% of total departing seats
while the Shanghai metropolitan area has 18 million people and accounts for 16%.
In industrialized Guangdong Province adjacent to Hong Kong, the two major cities
of Shenzhen and Guangzhou have 18% of the population and account for 94% of
total departing seats in the province.
Essentially, airline operations are concentrated in the coastal regions, with
the three major cities accounting for 45.5% of departing seats in the Chinese
mainland, a percentage that has changed little since 1998. In stark contrast,
reports Airclaims, the large regions in the west, which represent 49% of the
country's area and 12.8% of the population, produced just 0.8% of departing
seats in 2004. In the international context the imbalance is even greater, with
the big three cities accounting for 72% of departing seats. However, Airclaims
Chief Economist Peter Morris believes that "as trade and markets develop in the
rest of China, pressures will increase for direct international services for the
true origin-destination markets." He adds, "While hubs may suit both [major]
airport operators and airlines for awhile, inevitably the pressure for air
services to benefit other regions directly will build." The cities in these
areas are massivewhile Europe and the US have five cities with more than 5
million residents, China has 12.
