Aviation Industry in China: Aggressive Expansion Plans

The 68th IATA Annual General Meeting held in Beijing has brought some insight into the Chinese airline prospects. While the reality of the global aviation industry is less optimistic than forecasted, China stands out with an aggressive aviation expansion plan.

The outlook for the aviation industry in the country has changed dramatically over the last few decades. Clifford Coonan, a journalist of the “Irish Times” shares his experience from flying to China 20 years ago: “The flight was delayed because someone had set up a stall on the runway selling food mixers. There was one more person booked on the plane than there were seats, so two of the stewardesses had to double up.”

However, a lot has changed since Mr. Coonan’s aforesaid flight. According to But Ma Kai, a state councillor in charge of economic development, the industry has sustained an annual growth of 17.5 per cent ever since 2005. The country’s domestic aviation passenger market is the second largest in the world, while its international passenger market ranks seventh in the world. China’s airlines accounted for half of all global profits last year.

Even though the overall Chinese economy is slowing down a bit, the aviation industry continues to stand strong with more than decent performance results. The demand for air travel in the Chinese market has recently experienced a booming growth and aviation experts worldwide foretell a significant expansion for the sector in the near future. This places China at the centre of the global aviation industry growth.

At the end of 2011, the country had 2,888 commercial planes in operation and its aviation industry employed 1.2m people. Due to the new goals presented by the Chinese aviation authorities these numbers are expected to increase even further in the near future.

At the IATA meeting in June, 2012, The Civil Aviation Administration of China (CAAC) outlined its bold expansion scheme, which focused on considerable investment in the aviation infrastructure and aircraft. According to Li Jiaxiang, the chief of CAAC, China plans to construct 70 new and renovate another 101 airports as well as purchase more than 300 airplanes annually – all within the period between 2011 and 2015.  As a result, a total of more than 4,000 planes and 230 airports are expected to be available for use by the end of 2015.

This optimistic outlook attracts various market players to the country, especially aircraft producers and foreign labour force. John Leahy, the Airbus' chief operating officer for customers, noted after his meetings with most of the Chinese airlines that “quite a few [airline companies] are talking to us about new orders”. The good news for pilots, flight attendants and aircraft technicians is that the Chinese airline companies are on a recruitment drive in the Western European countries and across the US as the lack of professionals caused by the significant aviation industry growth necessitates looking for more talent abroad. That helps to induct newly acquired aircraft faster whilst reducing training costs for airlines. Martin Eran-Tasker, the technical director of the Association of Asia Pacific Airlines, has noted that China will be in need of 72,000 fully trained pilots and 110,000 aircraft technicians in the next 20 years.

The overall picture places China as one of the key players in world’s aviation arena and brings optimism to the entire global aviation industry. The expansion plan ensures new orders for global aircraft and infrastructure manufacturers while the benefits of saved training costs  provide an assumption that foreign pilots, aircraft technicians and flight attendants will for some time continue to be highly demanded in the country.

Sources: Irishtimes.com; English.cri.cn; Foxbusiness.com; Globalairportcities.com; Telegraph.co.uk