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There’s good news regarding Business Aviation in China. The government has recognised an urgent need to develop the sector- and this should gradually help overcome some of the problems that have long been associated with operating a business aircraft in the country.

Liz Moscrop   |   1st April 2011
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Liz Moscrop Liz Moscrop

Liz Moscrop has written extensively about Business Aviation for several years and specializes in...
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Proactive steps towards enormous potential

There’s good news regarding Business Aviation in China. The government has recognised an urgent need to develop the sector- and this should gradually help overcome some of the problems that have long been associated with operating a business aircraft in the country.

Namely- the problems associated with General/Business Aviation in China are that it can be hugely costly- and almost impossible to transit the country easily as a foreign operator since you need at least three days to arrange a permit to fly there- and airspace is broadly restricted. In addition- there are too few airfields (most people live in the developed east- so most aviation activities are located in this region- which covers just 20% of the country’s whole area).

The good news- as stated above- is the government’s recognition of the need to develop the sector. On November 14th 2010 the State Council and the Central Military Commission issued a circular report stating that the military is loosening access to lower-altitude airspace for Business Aviation traffic. Airspace today is divided into Class A- B- C and D segments- which are tightly controlled by the military and offer limited access and air traffic management services.

Lower altitude airspace relaxation benefits aircraft flying below 4-000m (helicopters and light aircraft especially). There will eventually be three separate zones: areas remaining under full control; areas under surveillance; and areas that can be freely used by operators filing flight plans in advance.

This is huge progress from having to request permits three days ahead of time. The program will launch in Changchun- Guangzhou- Shenyang- Zhuhai and Xinjiang throughout 2011 and expand nationwide by 2015- with low-altitude airspace to be opened in the country’s five aviation control areas including Beijing and Lanzhou.

South China's island province of Hainan opened its low-altitude airspace at the end of January- in an effort to help build the island into a top international tourism resort. This took the form of a trial flight ceremony in Haikou- the island’s capital city- by the province's Airspace Administration- Development and Reform Commission- and Tourism Administration - with several helicopters test flying at altitudes of less than 1-000 meters.

This new airspace relaxation means that China could become the world's largest market for helicopters in the next two decades. China Daily reported in January that according to the China National Aero-Technology Import and Export Corporation- China would need more than 10-000 helicopters delivered there by 2020.

In addition to airspace reform- the government is implementing a five-year plan (2011-15) covering training- fleet development- airport construction and fuel supply. There are also plans to build more new General/Business Aviation airports and airstrips with new standards- plus new training and testing for General/Business Aviation pilots and mechanics- and more General/Business Aviation flight schools.

Other signs of improvement
Last November’s inaugural International General Aviation Forum (IGAF) at Airshow China in Zhuhai was very well attended- and included influential speakers from right across the aviation spectrum. One key figure was vice-director of the State Air Traffic Control Commission Du Qiang- who spoke of how General Aviation had become one of the government's main priorities. It is he who orchestrated the recent relaxation in lower-altitude airspace. “This is an important first step in developing General Aviation in China-” he commented.

The deputy administrator of the Civil Aviation Authority of China (CAAC) Li Jian also spoke about change. “The current development level of General Aviation (GA) is unable to keep pace with China’s social and economic development needs-” he outlined. “GA has tremendous development potential and the outlook is bright. GA can make a significant economic contribution and generate sizeable employment for China.”

Underscoring the point that outsiders- too- are really seeing potential change in the market and backing that potential with cash was the plethora of foreign aircraft manufacturers displaying business jets at the show. Airbus- Boeing- Bombardier- Cessna- Dassault- Embraer and Gulfstream all had aircraft on the static park.

Sino-US relations
During IGAF Mr. Li pointed to the U.S. as an example of how GA and its application by companies and entrepreneurs (the sector called Business Aviation) contributes to a major world economy. He said that developing Business Aviation would be a key economic strategy for China.

The CAAC is now actively cooperating with the U.S. in order to emulate the world’s friendliest GA economy. The US-China Aviation Cooperation Program (ACP) recently hired consultants Booz & Company to examine the outlook for China’s GA sector. The subsequent report identified several factors constraining growth- including a restrictive regulatory environment- airspace access- and an under-developed infrastructure and supply ecosystem.

Growth has also been hampered by import duties and value added taxes- which are higher for GA aircraft than for commercial aircraft. Additionally- imported aircraft still rely on overseas support for major repairs. There are few airports and limited access to many of them.

However- the CAAC is determined to develop the Business Aviation sector- and is throwing its full weight behind development programs. These include: Formulating new GA policies and regulations; and pilot programs of reforms in Northeast China- with a view to expanding into other parts of the country. The CAAC is also encouraging international exchanges and cooperation- such as with the ACP- and seeking contributions from industry associations.

Crucially the CAAC has also pledged to simplify the process for establishing a Business Aviation operating company. It will promulgate CCAR 91 and 135 (similar to the US operating standards for private and charter operations) which will be a significant boost for the industry- facilitating flight operation and certification for commercial operators using private aircraft.

There are also reviews underway designed to lower operating costs (e.g.- takeoff- landing- and handling fees) for GA flights- plus a reduction of import duties and value added taxes on GA/Business Aviation aircraft and parts.

According to Booz and Company- the GA/Business Aviation sector could grow at approximately 20 percent annually- generate RMB 7 billion of annual output- and create 43-000 jobs and a range of indirect benefits.

Estimates for annual growth of the Chinese GA fleet tend to come in anywhere between 10–20 percent- with more than 2-500 aircraft predicted for 2015. While a sizable portion of the GA aircraft will be for training and utility operations- a significant number will be aircraft dedicated to Business Aviation- providing transportation for companies and entrepreneurs.

But for today there is still a shortage of infrastructure away from the major coastal economic centers. The government is investing more in airports and roads- but it will be years before the effects are thoroughly felt.

On the plus-side aviation lawyer David Tang is confident that the private sector will invest. “I know of several entrepreneurs in property development- who are also interested in building airports where they are building houses-” he concluded.

Read more about: Business Aviation in China

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