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China opens world’s largest untapped market – its aviation sector

November 16, 2010

After ruling the roads, China is going to dominate its airspace. Opening up one of the world’s largest untapped markets for corporate and civilian aviation, a circular jointly issued by the State Council and the Central Military Commission said China will gradually open part of its low-altitude airspace – altitudes lower than 4,000 meters – for private flights to promote the country’s general aviation sector, or the use of aircraft for purposes other than those of airlines, the military and the police. Currently the military controls 80 percent of the country’s airspace.

According to the circular, the country’s low-altitude airspace will be divided into three sections: areas under control; areas under surveillance (1,000-4,000 meters); and areas where aircraft can fly freely after reporting their flight plans in advance (below 1,000 meters). Previous regulations placed low-altitude airspace under strict control throughout China, forcing private planes to apply in advance for flight approval, which often took a long time.

“Right now it is basically impossible to use general aviation aircraft in China and some aircraft owners are already pushing the envelope by flying without permission,” Jason Liao, chairman and chief executive of China Business Aviation Group, who has been lobbying for the past decade to get Beijing to open China’s lower altitude airspace told the Financial Times. “This is a huge step for China and almost certainly means the country will eventually become the second-largest market in the world for general aviation aircraft like helicopters and turboprop aircraft [after the US].

With high consumer spending, swathes of cash for private planes and a penchant for acquiring the best, newest gizmo in town, Chinese billionaires that hop between Hong Kong and Shanghai / Beijing are expected to crowd up airspace soon. Opening up China’s airspace, represents a huge market opportunity for luxury and commercial travel operators, in agriculture for crop spraying etc and pilot training. There are around 1,000 aircraft used for general aviation across the country, while the United States has 222,000 registered general aviation planes and Canada has 10,000.

The aviation sector will also allow business to prosper as time to commute will be cut. Shane Tedjarati, president and CEO of Honeywell China and India, the US-based maker of flight controls, auxiliary jet engines and industrial automation products, said the decision to open low-altitude airspace for private planes – with the initial majority to be helicopters – will boost the efficiency of not only the police and emergency services, but also executives. A helicopter trip from an office in Hong Kong to a manufacturing base in Zhongshan city of Guangdong province takes up to 25 minutes, whereas a day is required to make the same journey by car or train.

Over the next five to 10 years, China is expected  build a mechanism of regulations, services, infrastructure, pilot training facilities and flight safety monitoring facilities,” the circular added. Trial operations of the open airspace reform will start in some areas in 2011 before being expanded to other parts of the country.

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