China executives make rare public criticism of aviation policy

BEIJING Fri Aug 29, 2014 11:15am BST

Two people watch planes land as they stand in the terminal three building of the Beijing Capital International Airport July 11, 2011. REUTERS/David Gray

Two people watch planes land as they stand in the terminal three building of the Beijing Capital International Airport July 11, 2011.

Credit: Reuters/David Gray

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BEIJING (Reuters) - General aviation executives offered unusually sharp criticism of China's pace of industry reform, saying there had been too much talk and too little action in the four years since China announced plans to open up its low-altitude air space.

China's military controls much of the country's air space, restricting commercial access. Many of China's 189 domestic firms offering general aviation services such as aerial crop protection, tourism and maintenance are unprofitable, according to industry executives.

"We've heard very loud thunder but haven't seen much rain," said Fu Yuming, deputy general manager at AVIC International Aero-Development International Corp. AVIC is China's biggest government-owned aviation conglomerate.

While airline executives and service providers often grumble among themselves, the public airing of grievances at an industry meeting last week was unusually direct.

In 2010, the Chinese government issued guidelines that aim to open up airspace below 1,000 meters (3,280 ft) by 2015 and below 3,000 meters by 2020.

That has boosted demand for aircraft from companies such as Gulfstream Aerospace Corp (GD.N), Bombardier Inc (BBDb.TO), and Cessna Aircraft Company (TXT.N). Business jet sales in Greater China rose 21 percent to 371 in 2013 from the prior year. Bombardier estimates that business jet deliveries could reach 2,400 over the next 20 years.

Fu characterized the policy hurdles of airspace control, numerous approvals, and insufficient investment as "three big mountains" that weigh on China's fledgling general aviation industry, playing off a catch phrase that was used by late Chinese leader Mao Zedong to inspire his ragtag army during China's civil war. For Mao, the mountains were imperialism, feudalism and bureaucratic capitalism.

The Civil Aviation Administration of China has spent more than 10 billion yuan (0.98 billion pounds) to subsidise airports for airlines, but has yet to invest in small airports to support general aviation, said Wang Jianhong, deputy chief of Zensun Heliport, a private airport development firm in southeast China.

A CAAC spokeswowan said the regulator has supported the development of general aviaton and has been moving to streamline approvals.

(Reporting by Fang Yan and Matthew Miller; Editing by Emily Kaiser)