China cuts flights at Beijing airport, suspending new carrier approvals


Beijing (XFN-ASIA) - The General Administration of Civil Aviation

of China (CAAC) said it has started to reduce the number of domestic flights

at Beijing Capital International Airport and will not take new applications

for licenses prior to 2010.

The administration said in a statement on its website that the moves aim to "curb the over-fast growth of the country's aviation market", amid increasing congestion at major airports.

Mainland airlines carried 86.7 mln passengers in the first half, up 16.7 pct from a year earlier, and the surging demand is expected to continue, with average passenger growth of 14 pct forecast each year until 2010, and 11 pct from 2011 to 2020.

"The fast development of the market has caused increasing problems including a shortage of technical staff, lack of air space resources and insufficient airport services," said the administration.

The CAAC said it has recently issued a circular requiring Beijing airport to reduce its total flights by 336 to 1,050 per day by the end of October and down to 1,000 by the end of March next year.

Each of the the three biggest carriers -- Air China, China Southern and China Eastern -- has had 10 flights taken away from Beijing airport beginning today, with 48 flights in total removed from the airport's schedule, said the aviation regulator.

Beijing airport, which has a design capacity of 35 mln passengers but last year handled 48.7 mln, now ranks in the top 10 busiest worldwide.

The country has invested over 3.3 bln usd in expanding the airport ahead of the Olympics next August, with a third terminal set to open next March and a new runway coming on line from this October.

The regulator added that it will not accept any fresh applications to set up new airlines, and that it will apply stricter requirements for approving new airlines now waiting for licenses.

Newly-set up airlines will also be restricted from expanding their capacity, according to the administration.

However, the CAAC said it will continue to encourage the establishment of new cargo airlines, new carriers that mainly use foreign pilots or aircraft made in China, and new airlines based in the country's underdeveloped western areas or the northeastern rust belt.

The CAAC took away one scheduled flight each from Air China and China Eastern Airlines out of Beijing airport earlier this month as punishment for their repeated delays.

Industry consultant CAPA (Center for Asia Pacific aviation) said last week that airline inefficiency also limits the potential of China's aviation sector, with domestic carriers consistently underperforming the global average load factor.

Citing figures for June, CAPA said airlines operated around 6.4 mln seats in and out of Beijing and 4.5 mln passengers passed through the airport, implying load factors of 70 pct. In comparison, load factors for Singapore, Dubai and London Heathrow were 75.3 pct, 76.9 pct and 78.9 pct, respectively.

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