The Civil Aviation Administration of China is proposing to alter or lift current restrictions that limit the number of Chinese airlines allowed to fly on international routes from China to key overseas destinations.

First reported by Caixin Global, the new regulations would allow private Chinese airlines to bid alongside state-owned airlines to operate flights between China and the United States, Australia, United Kingdom, countries in Southeast Asia and “selected other parts of the world”.

Current regulations mandate that one Chinese airline can fly on a specific international route. For instance, many prestigious international routes out of Beijing are only operated by Air China, such as Beijing-London, Beijing-Paris and Beijing-Los Angeles due to these regulations. The IATA said that 95% of China’s long range (more than 2,800mi/4,500km one-way) routes were operated by a single carrier, and that out of the ten most popular long range routes between China and other countries, only four have more than one airline.

In addition, the drafted regulations would lift current barriers for many domestic carriers who wish to operate international flights, such as eligibility and flight frequency requirements. In its place, the regulations would set standards for CAAC to follow when evaluating airlines and deciding which should win a route. These would include factors such as load factors, destinations, passenger complaint rates and on-time performance.

The existing regulations were created by the CAAC in the early 1990s to help domestic airlines compete on international routes, however, the consensus is that these regulations are now harming competition and the growth of the aviation industry in China. The passage of these regulations would most likely increase competition, translating into lower fares for consumers and allowing the Chinese international travel market to grow.

The IATA predicts that China will become the world’s largest aviation market in 2024, with the market growing by 817 million passengers to over 1.3 billion passengers a year.

H/T: Caixin Global

Featured image by Allen Zhao via Wikimedia Commons.

Categories: Industry Talk