Report by : Gan Yung Chyan
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
Since the approval of the setup of Air Guilin as a scheduled airline in September 2015, the approval of newly established trunk passenger airlines in China from the Civil Aviation Administration of China (CAAC) has suddenly tightened, and no company has obtained an operating license within three years.
This situation is finally expected to change. On 10 September 2018, CAAC issued a notice, announcing that Beijing Airlines has been issued the license which will enable the airline to start providing public air transport services. The procedure for the certificate enters the publicity period. If there is no opposition, Beijing Airlines will complete all the approval procedures and start scheduled flight operations before the end of 2018.
Beijing Airlines was established in 2003. It has been a holding company of Air China, and is mainly engaged in the operation of private business aviation activities. It operates business charter flights from Beijing to other domestic cities and as far to Hong Kong.
In May 2018, Beijing Airlines was approved to be transformed into a public air transport enterprise that operates trunk passenger transport business finally.
According to the announcement released on 10 September, Air China, Beijing Northern Investment Group Co., Ltd., Beijing State-owned Assets Management Co., Ltd. and Zhongda Yinrui Investment Co., Ltd. will hold 51%, 18%, 18% and 13% of the shares in Beijing Airlines respectively. The registered capital of the new company has reached 1 billion Yuan.
The main base of Beijing Airlines will be located at Beijing Capital International Airport, which is also the main operating base of Air China. As one of the most popular aviation hubs in China, Beijing Capital Airport has always had many restrictions on resource allocation. The airlines that can operate at Beijing Capital Airport as the main base are only Air China, Xinhua Airlines (HNA) and Capital Airlines.
This situation will change after Beijing's second new international airport is put into operation by October 2019 when a number of domestic airlines including China Eastern and China Southern, China United Airlines and China Southern's planned low-cost startup Xiongan Airlines will operate here.
It is under such changes that Air China, which has always had an absolute advantage in Beijing Capital, has begun to plan for the future. The impact of Beijing Capital Airport after the new airport starts operations and the changes in the air transport market in Beijing and even in North China after the next two operations are still difficult to judge, so it is necessary to respond in advance.
In this context, Beijing Airlines began to seek to convert its operational qualifications from CCAR 135 (small aircraft commercial transport operator operation certification rules) to CCAR 121 (large aircraft public air transport carrier operation certification rules) to enable it to change from engagement in business aviation operations to being able to operate large commercial airliners, thereby joining the competition in mainline passenger transportation business.
CAAC has approved Beijing Airlines to purchase three B737 series aircraft from Air China, and at the same time transfer 37 flight personnel, 13 maintenance personnel, 81 flight attendants, 10 security officers, 9 dispatchers and 2 transport personnel from Air China. Other service guarantees such as aircraft spraying, call signs and operations are in place.
Although Beijing Airlines' current main operating base is still Beijing Capital Airport, there is news that Beijing Airlines will eventually operate at the new Beijing airport and will also operate under a low-cost aviation service model. China United Airlines and Spring Airlines, the largest low-cost carrier in China, will operate at the new airport in Beijing. This will also change the current situation of low-cost airlines that are difficult to enter the Beijing market due to resource constraints.
However, the relatively special approval to Beijing Airlines does not mean that the attitude of the industry authorities on the approval and regulation of the mainline airlines has changed. After two stages of liberalization, there are currently more than 50 companies operating air passenger flights in China, and some smaller airlines have begun to show signs of being unable to adapt to market competition.
For example, a Northeast-based airline recently transferred most of the company's equity to another non-aeronautical business in the central region, and increasing resource competition caused by fragmentation of industry resources, non-benign market competition, and flight safety supervision pressure has also become a problem for industry management organizations.
At present, there are still many enterprises waiting in line to wait for the “tickets” of the civil aviation transportation industry. However, apart from regional aviation and cargo aviation companies, it is very difficult for new trunk airlines to be approved.
/ KUCINTA SETIA
Distributed to All Press & Travel Professionals
This situation is finally expected to change. On 10 September 2018, CAAC issued a notice, announcing that Beijing Airlines has been issued the license which will enable the airline to start providing public air transport services. The procedure for the certificate enters the publicity period. If there is no opposition, Beijing Airlines will complete all the approval procedures and start scheduled flight operations before the end of 2018.
Beijing Airlines was established in 2003. It has been a holding company of Air China, and is mainly engaged in the operation of private business aviation activities. It operates business charter flights from Beijing to other domestic cities and as far to Hong Kong.
In May 2018, Beijing Airlines was approved to be transformed into a public air transport enterprise that operates trunk passenger transport business finally.
According to the announcement released on 10 September, Air China, Beijing Northern Investment Group Co., Ltd., Beijing State-owned Assets Management Co., Ltd. and Zhongda Yinrui Investment Co., Ltd. will hold 51%, 18%, 18% and 13% of the shares in Beijing Airlines respectively. The registered capital of the new company has reached 1 billion Yuan.
The main base of Beijing Airlines will be located at Beijing Capital International Airport, which is also the main operating base of Air China. As one of the most popular aviation hubs in China, Beijing Capital Airport has always had many restrictions on resource allocation. The airlines that can operate at Beijing Capital Airport as the main base are only Air China, Xinhua Airlines (HNA) and Capital Airlines.
This situation will change after Beijing's second new international airport is put into operation by October 2019 when a number of domestic airlines including China Eastern and China Southern, China United Airlines and China Southern's planned low-cost startup Xiongan Airlines will operate here.
It is under such changes that Air China, which has always had an absolute advantage in Beijing Capital, has begun to plan for the future. The impact of Beijing Capital Airport after the new airport starts operations and the changes in the air transport market in Beijing and even in North China after the next two operations are still difficult to judge, so it is necessary to respond in advance.
In this context, Beijing Airlines began to seek to convert its operational qualifications from CCAR 135 (small aircraft commercial transport operator operation certification rules) to CCAR 121 (large aircraft public air transport carrier operation certification rules) to enable it to change from engagement in business aviation operations to being able to operate large commercial airliners, thereby joining the competition in mainline passenger transportation business.
CAAC has approved Beijing Airlines to purchase three B737 series aircraft from Air China, and at the same time transfer 37 flight personnel, 13 maintenance personnel, 81 flight attendants, 10 security officers, 9 dispatchers and 2 transport personnel from Air China. Other service guarantees such as aircraft spraying, call signs and operations are in place.
Although Beijing Airlines' current main operating base is still Beijing Capital Airport, there is news that Beijing Airlines will eventually operate at the new Beijing airport and will also operate under a low-cost aviation service model. China United Airlines and Spring Airlines, the largest low-cost carrier in China, will operate at the new airport in Beijing. This will also change the current situation of low-cost airlines that are difficult to enter the Beijing market due to resource constraints.
However, the relatively special approval to Beijing Airlines does not mean that the attitude of the industry authorities on the approval and regulation of the mainline airlines has changed. After two stages of liberalization, there are currently more than 50 companies operating air passenger flights in China, and some smaller airlines have begun to show signs of being unable to adapt to market competition.
For example, a Northeast-based airline recently transferred most of the company's equity to another non-aeronautical business in the central region, and increasing resource competition caused by fragmentation of industry resources, non-benign market competition, and flight safety supervision pressure has also become a problem for industry management organizations.
At present, there are still many enterprises waiting in line to wait for the “tickets” of the civil aviation transportation industry. However, apart from regional aviation and cargo aviation companies, it is very difficult for new trunk airlines to be approved.
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