Ground reality
By ZHOU WEIRONG (China Daily)
Updated: 2006-08-14 06:23 Local governments want to boost their position and competitive edges in
the regional economy, but the central government is concerned about the
profitability of airports and has to consider optimizing airport allocation and
controlling the number of airports.
There are 142 civil airports on China's mainland. But at least 60 per cent of
them, mostly in the central and western regions, are not profitable and have to
rely on government subsidies.
Experts attributed the poor performance of airports to insufficient market
demand and fierce competition among airports in developed regions.
In the economically developed Yangtze Delta region, which covers Shanghai,
Zhejiang and Jiangsu, there are 14 civilian airports. Only four are profitable,
including two airports in Shanghai, one in Hangzhou and one in Nanjing,
according to CAAC.
"There are already arguments whether there are more airports than are
necessary in regions like the Yangtze River Delta," says Tang Qian, an analyst
with BOC International (China) Ltd.
In the Yangtze River Delta region, there are 8 airports for every 100,000
square kilometres, compared to six airports for the same size in the United
States.
The average in the country is 1.4 airports per 100,000 square kilometres, and
0.8 in northwestern China, according to a report by Intel-Create Information
Consulting Company.
Therefore, foreign investment in the airports may not generate profits in the
short term. However, such investments will be beneficial to the industry, say
experts such as Xu of the Institute of Yangtze River Basin Development.
(China Daily 08/14/2006 page5)
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