$16b investment in pipeline as China aims to open up aviation

SHANGHAI/SINGAPORE • China will invest 77 billion yuan (S$16.1 billion) this year in building aviation infrastructure, the official Xinhua news agency reported late on Wednesday, citing the country's civil aviation regulator.

The Civil Aviation Administration of China (CAAC) said the investment, which will focus on airports, will initially lead to 11 key construction projects and 52 aviation-related upgrades to existing facilities, Xinhua reported.

"The general aviation sector, especially aircraft research and manufacturing, has became a hot spot of both industrial upgrading and social concern," CAAC head Feng Zhenglin told the official news agency.

China's Cabinet separately said late on Wednesday it would support the development of the country's aviation industry and opening up low-altitude air space, an issue that constrains a fledgling market for helicopters and small aircraft. It did not provide details.

Mr Greg Waldron, Asia managing editor at industry publication Flightglobal, said: "Opening up will especially benefit China's tourism, emergency medical services and pilot training sectors, which operate light aircraft and helicopters."

Civilian air traffic controllers handle low-altitude air space and work with the military to manage both civilian and military traffic in most parts of the world.

China's military controls the country's air space, and its planes have priority over civilian aircraft. Special military-only zones also force other aircraft to take a longer route.

Over the last few years, Beijing has relaxed some restrictions on flights below 1,000m - although civilian aircraft still need military approval to fly through some areas. Industry observers expect the approval process to be further relaxed and the ceiling to increase to 3,000m, in line with Western norms.

The relaxation could boost demand for light aircraft.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 06, 2016, with the headline '$16b investment in pipeline as China aims to open up aviation'. Print Edition | Subscribe