70 New Airports Planned, Aviation Official Says

(Beijing) – The country will build 70 new airports and rebuild or expand 101 others over the next five years, the director of the Civil Aviation Administration of China (CAAC) said on May 24.

At the same time, China will add more than 2,500 planes, Li Jiaxiang said.

The country had 180 airports in 2011 and their overall profit was 5.3 billion yuan, he said. However, 119 of the smaller ones lost 2 billion yuan in total.

This lack of profitability was normal because small airports were public facilities, Li said. CAAC statistics show that the related businesses around the 119 small airports had revenue of 3 trillion yuan last year. "That's why local governments subsidize the airports and attract airline companies to develop in that area," Li said.

Before 2012, China imported 300 planes every year, but the average number was expected to be 500 over the next five years.

Data from the International Air Transport Association (IATA) shows that in 2011 the global civil aviation industry had earnings of US$ 8 billion, half from Chinese companies. It predicted that the profit would fall to US$ 3 billion in 2012.

Tony Tyler, IATA director general and chief executive officer, said the major problem facing airlines was oil prices. International oil prices have exceeded US$ 100 per barrel 14 months in a row.

In 2002, fuel accounted for 13 percent of the civil aviation sector's cost, but this percentage has increased to 34 percent in 2012.