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Thursday, August 24, 2017

China Regulator Considers Allowing More Airlines to Fly International Routes

(Caixin) China's aviation authority has proposed lifting restrictions that currently limit the number of Chinese airlines allowed to operate international routes from China to key destinations in certain countries.

Private airlines would be allowed to join state-run competitors in bidding for routes between China and the United States, Australia, Britain, Southeast Asia and selected other parts of the world, according to a regulation drafted by the Civil Aviation Administration of China (CAAC).

If the regulation were to take effect, China would no longer limit international routes for many long-range destinations to a single airline. For example, the change would open to competition the Beijing-to-Los-Angeles route, which has been controlled by state-owned Air China for years.

CAAC restrictions that now cover domestic airline eligibility and flight frequency for international routes would be lifted for many overseas destinations. Authorities let only two airlines serve long-range routes linking some countries that have not granted Chinese airlines commercial aviation rights to enter their airspace.

A long-range route is defined as one that requires flying more than 4,500 kilometers (2,800 miles) one way.

The restrictions were initially imposed "by CAAC to help domestic airlines compete on the international stage," civil aviation expert Lin Zhijie told Caixin. "However, as China's civil aviation industry grew stronger, this policy restricted competition and hindered domestic airlines from expanding into the global market."

The International Air Transport Association said 95% of China's long-range international routes last year were served by a single carrier. Among the 10 most-popular long-range routes between China and other countries, only four have more than one carrier.

Although opinions from various parties will be considered before CAAC makes a final decision, China is expected to continue opening more international routes to its airlines, a source who participated in the draft process told Caixin.

The proposed regulation would set standards for CAAC to follow when evaluating competing airlines and deciding which should win a route. Standards would encompass flight volumes, regular destinations, passenger complaint rates and on-time performance.

And because Beijing is now building a second airport, the new regulation would have an effect on airlines seeking international routes between that new facility and abroad.

The State Council, China's cabinet, has ruled that Air China's hub must remain at the existing Beijing Capital International Airport. But a number of other domestic airlines will have to move to the new facility when it opens in 2019, including China Eastern Airlines, China Southern Airlines and Beijing Capital Airlines.

Lin said the proposed restriction would hurt airlines that have to move to the new Beijing airport.

Source: Caixin by Huang Rong and Song Shiqing

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