IN FOCUS: Why ATM reform is crucial to China's ambitions

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Vancouver
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China's air transport industry achieved two key breakthroughs in the last decade in fuelling its rapid development. Yet another will be required if it is to sustain this growth.

The reform of the country's airline sector in 2002 created three major domestic airlines, significantly improving the industry's competitiveness. And a 250 billion yuan ($39 billion) investment in air transport infrastructure development - equal to the investment over the previous 25 years - laid a solid foundation for the industry to grow.

These measures, enhanced by strong domestic demand, helped turn China into Asia-Pacific's largest air transport market. But now, the industry needs another breakthrough to overhaul the country's civil airspace to ensure it continues this development.

Only 20% of Chinese airspace is open to civil aviation, with the rest controlled by the military. But while aircraft movements and passenger numbers have soared over the last 11 years, airspace capacity in the country for civil aviation has barely changed. This has created a bottleneck, putting increasing pressure on domestic airports and airlines.

The hampering effect on airports started to show at the end of the last decade in Beijing, Shanghai and Guangzhou airports, the fast-growing hubs for Air China, China Eastern and China Southern. They have been frustrated by the crowded air routes, particularly the Beijing connections to Shanghai and Guangzhou. It is largely for this reason that some of their growth has slowed.

When Beijing's international airport, for instance, opened the enormous Terminal 3 in 2008, and immediately increased aircraft movements 13% the following year. But growth fell to 6% in 2011 and 3% in 2011. This compares with the double-digit growth seen at smaller, less-congested airports.

China's domestic carriers have seen services hit by the overcrowded skies around the hubs. The airlines' on-time performance has been in decline, from 82% in 2008 to 75% in 2011. Among the delays in 2008, 21% were caused by airspace congestion. This increased to nearly 30% in 2011.

The government has taken measures to ease this pressure. Reduced Vertical Separation Minimum (RVSM) initiatives in 2007 created six additional flight levels to enhance airspace utilisation, and in December 2011, it launched the Northern Region Airspace Optimisation programme. This is the biggest airspace adjustment plan so far, and China's first large-scale co-operation in this field between military and civil aviation. The programme has added seven fixed air routes to the region and 13 temporary routes through shared use of airspace. This lifted civil airspace capacity in the northern region 8%. Beijing has been the biggest beneficiary, adding five hourly take-off slots.

While this is encouraging, there is still a long way to go. Many of the airspace adjustment plans include adding temporary air routes, which now account for 16% of China's total air route length. While this is a means to ease the congestion - especially around the busy hub airports - it is not always available, making it a less reliable resource for civil aviation.

Much of the work has focused on regions involving the main hubs. But the country's airport and airline expansion has increased passenger flows at other domestic airports. In 2011, the number of airports handling 11 million or more annual passengers reached 21 - more than double 2008. Congestion caused by limited civil airspace around busy airports will soon become a nationwide, rather than regional, phenomenon.

As China expects passengers numbers to surge from 268 million in 2011 to 450 million by 2015, the gap between demand and airspace capacity will continue to widen, further challenging the industry's sustainable development. This calls for a government-led, nationwide and comprehensive reform in the airspace management structure to renegotiate and co-ordinate civil/military airspace usage.

In its latest five-year plan to 2015, the Chinese government reveals the goals of air transport development, including increasing annual take-offs and landings by 11%, and the number of airports to 230.

There are hopes such ambitious goals, coupled with the determination of China's major airlines and airports to become competitive international players, will trigger an effective airspace management reform.

Jane Pan is a Vancouver-based Chinese air transport specialist. She previously worked with Lufthansa and IATA in Beijing