Industry Snapshot- Civil Aviation

China is on its way to achieving its goal of transforming from a “large aviation nation” to a “powerful aviation nation.” The country has become an integral and growing part of the global aviation supply chain for a wide variety of aviation products and services, and is making great progress on its plans to enter the large commercial airplane manufacturing market. As of June 2012, there are nearly 3,100 aircraft operating in the civil aviation market on the Chinese mainland, nearly triple the total in 2002. Of those, more than 1,850 are transportation aircraft and more than 1,200 are general aviation planes, according to the Civil Aviation Administration. Currently, there are 46 airlines on the mainland, which is 12 more than the number in 2002, and 134 general aviation companies are operating in the market.

However, significant challenges still remain. For example, only 20% of China’s airspace is available to commercial. China recognizes the increasing need to expand civilian airspace for commercial and civil aviation use. To address the issues brought by the rapid demand and growth of the aviation industry, in 2011, China’s Civil Aviation Administration of China (CAAC) has announced the “12th Five-Year Plan for Civil Aviation Development.

In 2002, there were only four airports in China that could handle more than 10 million passengers annually, and by the end of 2011, the country had 21 such airports. Massive investments in infrastructure have increased the capacity of airports across the country to serve passengers and handle cargo.

According to the 12th FYP plan, China is expected to add 56 airports in the next 5 years. By 2015, the total number of airports in China will exceed 230. China’s airlines by 2030 will need 5,000 new airplanes valued at RMB3.8 trillion. The number of pilots in China is expected to increase from 24,000 in 2010 to 40,000 by 2015. By 2015, the air transport turnover of civil aviation will reach 99 billion ton-km, the air passenger transport 450 million person-times and air freight transport 9 million tons, up by 13%, 11% and 10% respectively. The expansion provides significant opportunities in airplane sales and airport design and construction, flight training as well as in the general aviation sector.

CAAC predicted that in 2010-2020 China will need around 2,500 pilots a year. China’s domestic flight training capacity is insufficient to meet this demand. China’s largest flight training school, the Civil Aviation Flight University under the CAAC can only train 1,000-1,200 students per year. As a result, Chinese airlines have been calling upon foreign flight training schools to bridge the gaps. Advanced training equipment and systems are increasingly in demand in China, e.g. simulator, passenger crew training systems.

There are in total 23 foreign schools accredited by CAAC to train Chinese pilots for the airlines, and four of them are in Canada. It is a lengthy and expensive process to obtain Chinese accreditation. Despite the fact that there is a huge demand of pilots for China’s airlines, CAAC has suspended receiving application of foreign schools for the time being. The schools that do not have approval from CAAC would only be able to do the training for private pilot licence.

According to CAAC, nearly 20 provinces and regions are making plans to develop the general aviation industry, and 14 of those have outlines such intentions in their respective 12th FYP. This is in recognition of the important role general aviation can have in further developing China’s economy and infrastructure.

China’s low-altitude airspace is controlled by the Air Force and the Civil Aviation Administration of China (CAAC). Private flights currently need to go through time-consuming and complicated procedures to fly in low-altitude airspace, which has hampered the sales opportunities for demand for private jets.

China has launched pilot projects in its north-eastern, southern central regions, as well as seven pilot cities, to open airspace below 1,000 meters for general aviation flights. The seven pilot cities are Tangshan, Xi'an, Qingdao, Hangzhou, Ningbo, Kunming and Chongqing. By 2015 State Air Traffic Control Commission (SATCC) plans to expand the reform nationwide. Central government commitment to this pilot program was laid out in the 12th FYP.

Contact:

Ms. Jessica Jiang, Commercial Officer, Alberta China Officer Email: lin.jiang@international.gc.ca Tel: (8610) 5139-4277