China Plans Further Financial Stimulus for Ailing Airlines

 - March 12, 2020, 4:46 PM

The Civil Aviation Administration of China (CAAC) announced Thursday that it plans to add a string of fresh measures in a bid to buoy the economy and restore international and domestic services as world markets continue to grapple with the ongoing Covid-19 outbreak.

Speaking during a CAAC press conference earlier today, Jin Junhao, deputy inspector of the aviation administration's transportation department, confirmed the authority was contemplating further fiscal and monetary support on top of an economic stimulus package rolled out earlier last week. Among the latest measures, China is considering further adjusting rules governing airport slots and instituting plans to simplify the administrative procedures for flight licensing and international and domestic route applications. Meanwhile, local navigation services and the general aviation sector await an imminent financial boost as part of a government economic package aimed at protecting the economy from the fallout of Covid-19. Officials also have begun considering additional measures to stimulate domestic and international airfreight by allowing cargo flights to access airports during daytime hours.

During Thursday’s press briefing, Zhang Qing, the second-level inspector of CAAC’s planning division, said officials had already begun implementing 16 financial relief policies, varying from reductions in airport-related fees and direct subsidies for local and foreign carriers to postponing the upcoming summer season schedule and suspending the evaluation of airlines’ on-time performance. She added that China would also free additional funding for infrastructure projects, including $14.2 billion in fixed-asset investment through to the end of the year. As of March 11, 61.7 percent of all civil aviation airport construction projects have resumed; the CAAC targets an 86 percent resumption rate by early April.

The announcement comes after China posted a record loss of $3.5 billion in revenue in February due to an 84.5 percent decline in passenger traffic year-over-year. The CAAC announced Thursday that some $3 billion of the deficit stems from airlines after they canceled tens of thousands of flights to and from mainland China last month. From March 2 to 8, domestic flights returned to roughly 40 percent of pre-virus levels, with most flights concentrated in the Yangtze and Pearl River Delta regions due to a return of local labor.