Cut subsidies to inefficient Chinese airlines: European business group
- Authorities should ensure that air traffic to new cities is guided by the market and does not lead to oversupply, chamber says
- ‘Only international long-haul routes to and from either Beijing or Shanghai are profitable’
A leading European business group has called on China to bring its aviation industry more in line with international standards as it grows to become one of the biggest in the world.
In the report released on Tuesday, the chamber urged Beijing to phase out government subsidies for long-haul air routes to and from second- and third-tier Chinese cities.
Authorities should ensure that expansion in air traffic to new cities in China is in line with market conditions to avoid an oversupply of passenger flights, according to the report “In for the Long Haul: Developing a Sustainable Operating Environment for Airlines in China”.
Chamber president Joerg Wuttke said the lack of competition in Chinese aviation was similar to that in Europe before market liberalisation in 1993.
“We are coming from a region which had in itself an inefficient airline business until 1993 and we saw it’s valid to maybe share the experience we had over the last nearly 30 years with China to make sure that China also benefits from a more efficient aviation market,” Wuttke said.
