August 22, 2007
China To Curb Airline Growth
China To Tighten Control Over Airline Growth
According to a recent Aviation Week and Space Technology article, China's airline and aircraft industry should benefit from recent government moves to curtail the growth of the civil aviation market. The new initiatives announced by the CAAC include a ban on new airlines until 2010 at the earliest and an immediate reduction of 48 aircraft movements a day at Beijing's airport. However, new airlines will be allowed if they meet one of the following criteria: (1) they carry freight; (2) use mainly foreign pilots; (3) fly mostly at night; (4) primarily serve the west and northeast of the country; and (5) use Chinese made aircraft. According to AW&ST, these new regulations will allow existing carriers to firm up pricing power in the marketplace and help alleviate the "shortage of technical workers, airspace and airport capacity."
A related article containing an interview with China's chief aviation minister Yang Yuanyuan about the "radical reforms" he has orchestrated in China's aviation market can be found on the Airline Business website.
Problems At London-Heathrow
The Economist recently ran two articles looking at problems with London's Heathrow airport. The first article articulates reasons why Heathrow's underinvestment in facilities could be cured by breaking up BAA's monopoly control over London's three main airports (Heathrow, Gatwick and Stansted). The second more sympathetic article speculates that the recent negative focus on Heathrow's customer service problems "may be may be the result of 'an orchestrated campaign to influence the [UK Competition] Commission's outcome' by those who want to see [BAA] broken up."
EU Q2 2007 Quarterly Report on the EU Air Transport Market
This newly released report includes a detailed look at how PSO (public service obligation) routes are administered. As discussed in previous blog postings, DG-TREN has increased its oversight of this controversial area during the past year.