China to Spend Big on Airport Infrastructure Expansion

China´s Civil Aviation Administration (CAAC) has announced it will spend $17.4 billion over the next five years on expansion of its airport infrastructure.

“By 2010, the mainland will have about 186 airports, up from 142 currently,” said CAAC vice minister Gao Hongfeng. “China´s commercial aircraft fleet will grow to 1,580 by 2010, up from 863 currently and by 2020, China will have 4,000 commercial aircraft.”

China´s three largest airports, Beijing, Shanghai and Guangzhou, will be expanded so they can maintain their roles as China´s international air passenger and cargo hub. Expansion plans are also slotted for Shenzhen, Chengdu, Haikou, Hangzhou and Xian airports.

Many of the present 170 airports nationwide are old and need to be renovated or replaced with newer terminals. “There are only about 10 airports in China that are profitable, some only in terms of cash flow,” said Jim Eckes, from Indoswiss Aviation Consultant. “Overall, Chinese airports have the potential to make money.”

In 2004, the CAAC handed over control of 70 airports to local governments and remained a regulator of the industry. “The reform resulted in a better market environment for aviation, allowing fair competition between different airlines,” said Li Wei, deputy fleet planning director at Shenzhen Airlines.

Chinese officials are saying the country is confident enough to embark on a bold aviation development plan given that air traffic has had a double-digit increase. In 2004, passenger numbers rose 38 percent to 120 million.

In 2005, Chinese airlines carried 138 million passengers, up 15.5 percent from the previous year. It also carried 3.4 million tons of cargo, up 13.8 percent.