x Abu Dhabi, UAEMonday 22 January 2018

China airports cleared for take-off

The country's air terminals have facilities that are among the best in the world. Unfortunately, not enough passengers are passing through them to bear testament to that fact. So why is China building 45 more?

China plans to build more modern airports especially in less advanced areas despite increasing competition from high- speed rail lines.
China plans to build more modern airports especially in less advanced areas despite increasing competition from high- speed rail lines.

Fly into Yinchuan Hedong Airport, close to Yinchuan city, the capital of Ningxia autonomous region in central China, and you may well find the place quiet, to say the least.

The facilities are well-kept and modern, and they would put to shame those found at many major international airports in other parts of the world.

But not many planes or passengers are using them.

This part of China, home to many Hui Muslims, has yet to enjoy the benefits of the economic boom that has transformed the country's southern and eastern coastal regions. There are many other airports in China that do not have the buzz of Heathrow, Dubai International or JFK.

Li Jiaxing, who used to run Air China and is now in charge of the country's civil aviation administration, said recently that 130 of China's 175 airports lost money last year, with take-offs and landings rare events at some. Losses last year totalled 1.68 billion yuan (Dh939 million).

This makes Mr Li's announcement that China plans to build more airports, especially in the less economically advanced parts of the country, all the more surprising.

Over the next five years, another 45 airports will be built as part of an investment in aviation totalling more than 1.5 trillion yuan.

Also included is a near doubling of the fleet of state-controlled carriers, from 2,600 aircraft to about 4,500, Reuters reported. The country is also developing its own airliner, the C919, to compete against the Boeing 737s and Airbus A320s that dominate the narrow-bodied market.

Already, 100 orders for the pint-sized aeroplane have been lodged, mostly by the national carriers Air China, China Southern Airlines and China Eastern Airlines.

The dragon economy is also producing its own smaller regional jet, the ARJ-21, which is further ahead in terms of development than its bigger cousin and has secured twice as many orders.

While China's ultimate ambition to become a globally renowned aircraft maker is not surprising, even though it will not be easy to achieve, the rapid expansion in the number of airports when many existing facilities remain under-utilised is harder to fathom.

The double-digit expansion in China's economy may mean business people and leisure travellers are far more able to afford the cost of air tickets than in the past, but their readiness to take to the skies does not match the capacity of the airports.

In addition, the airport building frenzy is taking place at a time when airlines are facing a growing threat from high-speed railways, which are being laid at a pace that puts even the aviation sector's expansion in the shade.

By 2015 China is set to have a network of 25,000km of high-speed railways, about three times as much as now, and that could place some key air routes in serious trouble.

In June, the Beijing-to-Shanghai high-speed rail line is set to begin service, slashing the journey between mainland China's two principal cities from nearly 10 hours to just under four while travelling at a dizzying average speed of about 330kph.

The train, with its minimal check-in time and comfortable airliner-style seats, is expected to attract thousands of passengers who otherwise would have flown. The high-speed train may take twice as long, but when shorter check-in times are factored in, the difference lessens.

There are many cases around the country where high-speed rail is rivalling aviation, and the number will only grow.

So why is China suddenly building more airports?

Analysts are predicting double-digit growth in passenger traffic, so many of the sleepy airports are likely to see more action - and profits.

Some international commentators have suggested the expansion programme is partly driven by officials in provincial authorities hoping to earn money through kickbacks from builders.

However, Dr Clement Chow, a member of the Aviation Policy and Research Centre at the Chinese University of Hong Kong, believes there is an economic rationale to justify the new airports.

Just as high-speed railways are expected to help promote economic growth across the country, so the extra airports will spark development. And unlike high-speed trains, aircraft can also carry cargo.

"Airport development, you cannot just base it on profitability, otherwise a lot of airports wouldn't be built at all," says Dr Chow.

"You need balanced development. You have the income gap between the coast and the western areas. Some cities are still very backward compared to the eastern coastal cities. Airport development is one way to build in these areas and make them more accessible from outside."

Six of the airports will be built in Xinjiang, bringing the total number of facilities in the restive western province to 22, as part of a 30bn yuan investment programme.

Official predictions are that passenger traffic in the province will climb from 11.7 million last year to 20.4 million in 2015.

"Air travel in these western parts of China, the airport demand should be strong, not just from internal use, but linking with cities in central Asia," says Dr Chow.

"For the western parts of China … if you want to link these areas together the most effective way is air travel. Otherwise the western parts will be lagging behind the other areas."