Some big gains for small airports

THE central government will subsidize smaller airports, which account for more than 80 percent of domestic airports, to aid the development of the civil aviation industry, according to four new policies issued by the aviation watchdog yesterday.

The policies also cover subsidies for regional routes, interest deductions for loans used on airport infrastructure construction and standards to measure airport's investment in safety.

Airports which handle fewer than five million passengers annually will get subsidies, but airports not in use won't get the funds, according to the policies.

Nineteen airports handle more than five million passengers annually on the mainland, accounting for less than 20 percent of all the airports, the regulator said in a press release on its Website.

The new policies also benefit regional airports, inter-provincial flights and routes shorter than 600 kilometers. The subsidy standard will float up or down by about 20 percent between the off season and peak season.

The interest deduction policy is meant to encourage investors to collect funds from banks. The government will pay for all or part of the loan interest from the kick-off of the project till three years after the loan is put into use.

The watchdog will also evaluate airports using nine standards to ensure adequate investment in safety.

Many domestic airports are overloaded and can't meet the fast-growing demand for air travel. They are facing high liability, rising fuel prices and fierce competition in the global market.

To fuel the development of the airports, China's State Council has approved a plan to extend the use of airport construction fees until 2010.

"Given the lack of funds to fuel the vast construction needs, we won't stop charging airport construction fees, which are a major source of income," China's General Administration of Civil Aviation said in an earlier statement.

China started charging the fees in March 1992 to fund the nation's ambitious airport construction and expansion program.

The present charges are 50 yuan (US$6.65) per passenger on domestic routes and 90 yuan for international flights.

The fee is now added on to the price of air tickets.

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