CAAC Issues Ten Measures To Mitigate Financial Crisis

To promote the healthy development of the Chinese civil aviation industry, the Civil Aviation Administration of China has announced ten measures to deal with the poor business climate caused by the global financial crisis.

Among the ten measures, CAAC will tighten the approval policy for airlines' purchasing new aircraft in 2009, and encourage the airlines to cancel or delay new aircraft orders which are scheduled to be delivered in 2009.

For funding support, CAAC will increase allowances for 100 routes that show market prospects; and will allow a single airline to operate new routes exclusively for three years; it will also offer subsidies for certain long-distance international routes. CAAC will continue to implement the subsidy policy for regional routes by investing about CNY400 million.

Meanwhile, CAAC will restore to domestic airlines those fees collected for the infrastructure construction fund for the second half of 2008, and will exempt them from the fees for the first half year of 2009. The total cost of these two measures will be about CNY4 billion.

In addition, CAAC will also amend the policy on first class and business class fares on domestic routes. For the first half of 2009, civil airport charges will be implemented according to base costs, and the landing fees will not be increases. This is expected to save airlines about CNY2 billion.