Chinese Airlines Face New Tax Hike For Airport Costs

 - July 24, 2013, 4:40 PM

The Civil Aviation Administration of China (CAAC) plans to increase the annual contribution of local airlines to the China Airport Construction and Development Fund (CACDF) from 5 percent to 6 percent of their revenue starting next year.

Managed by the CAAC, the fund subsidizes the operations of loss-making regional airports and partly funds the construction of new facilities.

Last year 139 of the country’s airports posted a combined loss of $300.2 million, amounting to an increase of 13.1 percent over the previous year.

Most of the secondary airports in question  do not host enough flights to make a profit and handle less than 1 million passengers a year.

Under China’s 12th Five-Year Plan (2011-2015), secondary facilities in China’s less-developed western region will account for 45 of the 60 new airports scheduled for construction, as the country aims to integrate such areas into the country’s air transport grid.