Society

Chengdu to build aviation hub

(chinadaily.com.cn)
Updated: 2011-06-22 09:46

Chengdu is building a massive aviation hub to meet the growing aviation needs of China.

Deng Bin, president of Kunming Xingyao High-tech Development Co., Ltd, last year signed a contract with Shuangliu county in Chengdu. Deng planned to invest 300 million yuan to establish a business jet airline operatioin and construct a fixed operation base.

"There are many funds expected for general aviation projects, and we hope our projects can be approved as soon as possible," Deng said.

Last November, the central government decided to pilot the opening of low-altitude flights. With Chengdu ready to build what officials say will become the country's fourth biggest aviation hub, the city is targeting the general aviation sector.

A source representing the management commission of the Chengdu International Aviation Hub Integrated Functional Zone (hereinafter referred to as the management commission) said Chengdu will apply for government approval to build a general aviation manufacturing base that will serve a market valued one trillion yuan.

"Competition among different places for investments in general aviation is fairly intense, and all are busy seizing development opportunities," the management commission source said.

A Sinolink Securities reports that from 2011 to 2020, the aviation market in China will demand nearly 10,000 additional airplanes.

Chengdu leads development efforts

Air China has already come to Chengdu to look for a location. Two optional locations have been initially identified, but neither of them has been finalized. "Once the project is complete, it will certainly promote the development of related parts industries of airplane manufacturing," the source said.

In addition to Deng Bin's project, Commercial Aircraft Corporation of China (COMAC) is also preparing to build an aviation base in Chengdu for business jets, aviation maintenance and training. The planned operation will occupy an area of approximately 46.7 hectares.

Sichuan-based Haite Group also plans to build a base in Chengdu for business jets and helicopter assembly that will be an estimated 33.34 hectares in size. "We will submit materials in a short time, and then sign the contract," a Haite Group source said.

Deng said Chengdu already is a major aviation hub in West China, and the demand for business jets is robust. He plans to build capacity to manufacture more than 50 airplanes for general aviation, and the project is set to start this year or in 2012. "The present situation is that all of the regions will be at the starting line. In fact, there will be no obvious geographical restrictions for the development of general aviation. Those acting earlier will achieve bigger and better development in the future," Deng said.

Land is the key "Our initial plan is that in the starting stages of the 12th Five-Year Plan Period, applications, including the base for business jets, will create an output value of over 5 billion yuan," a source said. Chengdu Shuangliu Airport is also preparing to apply for new status as a national aviation hub airport.

Meanwhile, the IT industry has developed rapidly in Chengdu, especially following the arrival of the projects for Foxconn, Compal and Flextronics. The IT industry will provide a powerful resource for industrial support of air traffic and airline hub operations, the Sinolink Securities report stated.

But the Sinolink Securities report also pointed out that a healthy market mechanism has not been established in the general aviation industry. Economies of scale for aircraft fleet sizes and flight hours are still not available. It will be especially difficult for general aviation enterprises, with their high operating costs and weak profitability, to develop and expand, the report said.

"A number of enterprises hope that they can tide over difficulties at the stage of a small-sized industry through governmental help, such as tax reductions and exemptions or governmental subsidies," the report stated.

The Chengdu International Aviation Hub Integrated Functional Zone has been ranked as one of Chengdu's 13 key functional zones, and the degree of support for it has improved, a source said. "For example, up to now, most general aviation projects have been listed among key projects of Chengdu, and they can get priority support in the integration of land resources. Furthermore, concerning the price of land, enterprises can also get corresponding support according to their investment in construction and the leading role they play," the source said.