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Shanghai Gearing up to Be Aviation Hub

Shanghai airports will be open to all domestic airlines starting from spring next year and the carriers will be encouraged to operate flights originating from the city and also to stop over here, said Yang Yuanyuan, head of the Civil Aviation Administration of China.

The move will hopefully help boost Shanghai into an aviation hub in the country and in the Asia-Pacific region, said industry insiders.

"The CAAC now intends to gradually loosen its regulations and encourage competition among carriers. Shanghai will be the place for some of the relaxation in policies. For instance, starting from the spring flight schedule next year, the city will open its skies to all domestic airlines," said Yang at the three-day Shanghai International Aviation Symposium Wednesday.

Currently, Chinese airlines are not allowed to operate flights starting from a city or to have stopovers there if they are not based in that city, a protective measure aimed at preventing fierce competition among carriers.

Under the current regulation, only the two local airlines - China Eastern Airlines Co Ltd and Shanghai Airlines Co Ltd - are allowed to operate flights originating from Shanghai.

Industry insiders say the move is also to prepare for the arrival of more overseas airlines as Shanghai is poised to open its skies to allow them to stop over here when they head to another country.

"The next step following the opening-up to domestic airlines will be to embrace overseas carriers," said an industry insider surnamed Zhu.

Before this next step, the local government has to ensure Shanghai is served by an extensive domestic network as a hub, so that passengers arriving in the city on international flights will be able to fly on to their domestic destinations, Zhu added.

The CAAC has given a year to China Eastern Airlines, the bigger of the city's two carriers, which is also the third-largest in China, to prepare itself for the arrival of more domestic rivals into its traditional turf.

The carrier, taking into account the new policy, is now busy adding flights and planes to the local market.

"We will raise our share in Shanghai's air travel market from the current 36 percent to 40 percent by the end of this year, and by next year we will occupy half of the local market," said Zhang Ming, an official with China Eastern.

Industry officials also disclosed at yesterday's forum that ongoing talks between China and the United States on expanding a bilateral air service pact is expected to see more US carriers serving the two countries.

CAAC's Yang also revealed that airport taxes, which travelers now pay at airports, will be added into the air ticket price from the second half of this year. But the airport tax fee won't be changed, he said.

(eastday.com April 29, 2004)

Aviation Sector to Open Wider
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