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Primed to be world leader

By Karl Wilson | China Daily | Updated: 2013-07-05 09:49

As passenger numbers rocket and new airports spring up, China will soon be the biggest global player

More than two-thirds of the airports currently under construction worldwide are in China. This huge expansion in the industry means that the country is set to become the dominant player in the global aviation sector.

Over the next decade, China is expected to spend more than $250 billion on its aerospace sector, according to Research and Markets' China Aviation Industry Analysis.

Between 2008 and 2012, passenger traffic grew 15 percent, cargo 16 percent and mail 13 percent year on year; whereas the global growth in all three segments averaged at just 5 percent.

Analysts have forecast that China's airlines will grow 6.2 percent annually over the next 20 years, outpacing all other regions. For aircraft giants Boeing and Airbus, China has now become their biggest market.

Boeing analysts estimate that China's commercial fleet will grow to 5,980 aircraft by the end of 2031, compared with 1,910 at the end of 2011.

Around the country, dozens of airports are being built to meet the growing demand for air travel.

The International Air Transport Association (IATA) has forecast that by 2016, China will have 415 million domestic passengers annually, second only to the US.

Last year, Beijing Capital International Airport missed a widely-held projection that it would overtake Hartsfield-Jackson Atlanta International Airport in the US for the title of world's largest passenger airport.

Beijing has remained in the second spot after breathtaking growth that saw it enter the world's 10 largest airports only in 2006.

Beijing Capital ended 2012 with 81.9 million passengers, making it the largest city for air traffic in China. Shanghai, with its domestic airport in Hongqiao and international airport in Pudong, ended 2012 with a combined figure of 78.7 million passengers, just behind Beijing Capital.

Under the 12th Five-Year Plan (2011-2015), some 82 new airports are scheduled to be built, 16 relocated and 91 expanded, increasing China's airport network by 50 percent.

The aim is to form a national airport network that will cover 80 percent of the country's total population by 2020. By the end of 2015, there will be 264 passenger and cargo airports in China.

"The majority of these airports will fly shuttles for passengers located in remote cities of China to hubs that connect to other major destinations," says Wang Tao, a resident scholar with the energy and climate program at the Carnegie-Tsinghua Center for Global Policy.

"But as Chinese airlines are forced to cut prices to compete with the rapidly growing high-speed railway network, the answer is not more airports, but better-developed transportation networks," Wang says in a commentary on the Australian National University's East Asia Forum website.

"With more than three-quarters of China's existing airports already running a deficit, the focus on airport construction is misguided. The high-speed railway construction boom since 2002 has intensified pressure on existing airports," he says.

Wang explains how some existing airports struggle to compete with coastal cities, and request government officials to fly rather than travel by train for business trips in order to boost local airport use.

Li Jiaxiang, director of the Civil Aviation Administration of China (CAAC), admitted last month that 134 of its 182 airports run at a loss, but added that despite the losses they "still contribute to the growth of China's economy".

"We should not merely see airport profits but take into account that an airport can largely boost the economy of the whole region," he said.

Li made the remarks at the annual China Civil Aviation Development Forum in Beijing.

He says airport losses last year amounted to around 2.89 trillion yuan ($471.4 million;362.7 million euros), but added that the airports contributed around 3 trillion yuan to the country's gross national product.

Airport losses were mainly due to their method of operation, Li says, adding that "if the airports were public infrastructure facilities, they would make a profit".

Li called for a limit in local government involvement in the operation of airports, saying that governments should only be responsible for their construction. At present, local governments establish companies to construct and run airports in China.

Even so, it would appear - at least in the major cities - that passenger traffic is fast outstripping airport capacity.

Four years after Beijing Capital International Airport was expanded with the addition of Terminal 3, which can process 40 million passengers a year, the sprawling hub has already run out of capacity.

To cope, Beijing last year began construction on its third airport, which is located in Daxing district, on the southern outskirts of the capital. Beijing Capital International Airport is to the north of the city.

Daxing Airport will cover more than 90 square km, have nine runways by 2030 and an annual capacity of 130 million passengers. This is 23 million more than London's Heathrow and New York's JFK airports combined.

An integrated ground-transportation hub will feed passengers onto a high-speed rail link to Beijing inside of 30 minutes, or to the city's metro network.

In the northwestern region of Qinghai, two existing airports have been expanded and six "feeder airports" are said to be in the pipeline. In Xinjiang, also in Northwest China, four new airports are under construction.

Chongqing is building two new feeder airports, and at least 10 airports in smaller cities have announced they will add second terminals.

"For a local government, an airport is not merely a vanity project but also an economic engine," Li Xiaojin, director of the institute of air-transport services at the Civil Aviation University of China told Time magazine.

Shanghai Hongqiao International Airport built an extensive new terminal in just 32 months at a cost of $9 billion. The terminal is connected with the city's buses and subway, and also has a new high-speed railway network.

"They know how to build things and how to do it efficiently," Jeffrey Thomas, chief executive of American planning firm Landrum & Brown, who helped design the new Shanghai terminal, told the New York Times in April.

"That area went from plans on a piece of paper to a complex that has 14 million square feet in less than four years. That's hard to do."

Shanghai's Pudong - which operates 40 km east of Hongqiao as the city's international gateway - has already reached capacity and is planning to add a fourth and fifth runway.

But in some regions, doubts have been raised whether the splurge in airport building is worth it.

Hengyang Nanyue Airport will soon become the sixth civilian airport in Hunan Province.

Chen Guaoqiang, a director at Hunan Airport Management Group, said recently that by the end of the current Five-Year Plan, Hunan would have built seven new airports with a total investment of 30 billion yuan.

"Hunan will become the province with the most airports in the south-central region," he told local media recently.

In 2001 the city of Yongzhou, 150 km southwest of Hengyang, built Lingling Airport - the only civilian airport in southeast Hunan.

"On a recent day this month, the airport was very quiet," local Chinese media reported.

"With no flights during the day, the facility is accustomed to low levels of activity during the day."

According to CAAC data released in March, Lingling Airport handled 12,056 passengers in 2012, making it the 174th busiest among the 182 airports across China.

"Flights to Guangzhou, Shenzhen and Haikou all left from the airport in the past, but they have all ceased due to low passenger numbers.

"Each year, the airport needs about 10 million yuan in subsidies from the government. But in spite of this, it has plans to expand," local media reported.

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