Beijing (XFN-ASIA) - The civil aviation regulator has proposed
rules permitting possible subsidies to largely loss-making small and medium-sized
airports as well as to short-hop air services, the official CAAC Journal reported.
The newspaper said that the proposal was submitted for discussion to the 2007 annual financial work meeting - held last month by the General Administration of Civil Aviation of China (CAAC) - for discussion.
According to the proposal, subsidies for airports will be mainly provided to those with annual passenger traffic of less than 5 mln people, and those located in remote, underdeveloped regions. The focus of the subsidies will be on airport safety management.
Air routes within a province or short routes between provincial airports will also be subsidized, said the report.
The CAAC has completed a pilot program for subsidizing regional routes in the country's northwest. The trial showed that subsidies increased flight frequencies and profitability of the routes rose to the level of the national average, the report added.
It did not provide a timetable for the release of the new rules.