At the press conference sponsored by the State Council Information Office on February 14, 2006, Gao Hongfeng, vice minister of General Administration of Civil Aviation of China, briefed the press on China civil aviation's accomplishment in the 10th Five-Year Plan period and its prospect in the 11th Five-Year Guidelines period. He also answered questions from the press.

Full text:

Speech by Gao Hongfeng,Vice Minister of CAAC

February 14, 2006

Ladies and gentlemen:

Good morning. First of all, I'd like to extend my welcome to your attendance on behalf of CAAC and express my heartfelt thanks to friends from the media which have been giving concern and support to our work for a long time.

I

The 10th Five-Year Plan period was an uncommon period in the history of China's civil aviation and a period of carrying forward the cause and forging ahead into the future and moving with times. The civil aviation industry of China explicitly brought up and seriously implemented the strategic idea of building a country with powerful civil aviation industry, firmly seized the first important matter of development and devoted major effort to pushing forward reform and opening to the outside world. It markedly raised its transport capability, comprehensive strength and international position and fairly met the requirements of national economy and social development.

(1) Air transport grew by a big margin. According to preliminary statistics, in 2005 the whole industry carried a total air traffic, passenger traffic and cargo and mail traffic of 25.92 billion ton-km, 138 million passengers and 3.035 million tons respectively, representing increase of 111.6 percent, 105.3 percent and 89.2 percent respectively over the figures of 2000. In the five years, average growth of 16.2 percent, 15.5 percent and 13.6 percent were recorded.

(2) General aviation grew rapidly. According to preliminary statistics, during the 10th Five-Year Plan period, a total of 336,000 flight hours of general aviation were operated, up 59 percent over the 9th Five-Year Plan period, with an annual average growth rate of 11 percent during the five years.

(3) Aviation safety level apparently enhanced. The accident rate per one million flight hours in the whole industry was 0.29, down by 55 percent compared with the figure of the 9th Five-Year period and better than the world average level. Meantime, flight incident rate per 10,000 flight hours was on the decrease.

(4) Service quality improved step by step. Great improvement was seen in the hardware environment of air transport. The flight punctuality rate was raised to an average level of 80 percent.

(5) The fleet size expanded rapidly. By the end of 2005, the whole industry had a fleet of 863 transport aircraft, an net increase of 336 aircraft over the that of 2000. Aircraft maintenance facilities and equipment and technical development were strengthened.

(6) Great achievements scored in infrastructure building. In the five years, a total investment of 94.7 billion yuan was made in fixed assets in the whole industry. 21 new airports were added and a large number of airports were modified or expanded. By the end of 2005, there were altogether 142 certified civil airports in China. Around 7.8 billion yuan were invested in air traffic control projects. The completion and inauguration of the Area Control Centers in Beijing, Shanghai and Guangzhou have greatly promoted the technical level of the air traffic control system of China's civil aviation. The oil storage capacity of the oil supply system reached 1.66 million cubic meters, representing an increase of 380,000 cubic meters over that at the end of 2000.

(7) Major breakthrough achieved in structural reform. During the 10th Five-Year Plan period, a new round of structural reform was completed in China's civil aviation industry. The airlines and service supporting enterprises were disconnected from CAAC, realizing the detachment of enterprises from the government. The former three-level regulatory structure of "CAAC -- regional administration -- provincial (autonomous regional, municipal) administration" was replaced by two-tier structure of "CAAC -- regional administration." Reform was carried out in air traffic control system to form a three-level management and operation framework of CAAC Air Traffic Control Bureau -- regional air traffic control bureau -- air traffic control center (station). In order to strengthen aviation security, a contingent of air marshal was established. While reforming regulatory system, adjustments and improvements were also carried out in the CAAC's policy of industrial regulation. Market access has been further liberalized and private capital investment is allowed for airline operation. Currently, three private-run airlines, namely, OKAY, CHUNQIU and YINGLIAN, have started operation. The control over air route entry, flight scheduling and establishment of operation base were relaxed. The control over price was also relaxed. With respect to enterprise reform, some airlines and airports were reorganized as joint-stock companies and successfully listed on the market, and obvious results were seen in the change of their internal operating mechanism. Wtih a series of reforms, new industry management structure and operation mechanism have been initially established in China's civil aviation industry in line with the requirements of socialist market economy and in line with international practice.

(8) Big strides made in opening to the outside world. In the five years, new bilateral air services agreements or air traffic right arrangements have been concluded with 42 countries, and by the end of 2005 a total of 98 bilateral air transport agreements have been concluded between China and other countries. With respect to the expansion of traffic rights, experiments were made to open fifth freedom traffic rights of passenger or cargo traffic in such places as Hainan, Nanjing and Xiamen. New regulations concerning the policy of foreign investment in civil aviation industry were promulgated; the proportion of foreign investment and other restrictions were considerably relaxed. A total of US$2.35 billion of foreign investment were utilized in the five years. In 2004, China became a Part one member on the Council of the ICAO.

(9) Important progress was also made in the building of legal system and in science, technology, education and personnel training. The tremendous achievements obtained by China's civil aviation industry during the 10th Five-Year Plan period have pushed China's civil aviation industry to a new starting point of history. However, we must clearly realize that the further development of China's civil aviation will face a lot of contradictions and problems, which are manifested mainly in the fact that the personnel quality, infrastructure level and management level can not catch up with the rapid increase of air transport. We'll try our best to solve these problems.

II

The period from the 10th Five-Year Plan period to 2020 is an important period for building China into a well-to-do society in an all-round way. It is also an important strategic period of opportunity for civil aviation development. The civil aviation industry of China already put forward its objective of trying to realize a transition from a big country of civil aviation to a country with strong civil aviation industry during the first 20 years of the this century. To meet the needs of the economic and social development of the country and the demands of building a country with strong civil aviation industry, CAAC recently further advanced the grand concept of building a new generation of civil air transport system.

To build a new generation of civil air transport system, we must persist in taking man as the foundation, adopt advanced idea, mode and technology and transform, optimize and upgrade existing civil aviation service system. This system will not only make the air transport of China to be upgraded in quantity, but also leap forward in quality.

The objectives of a new generation of civil air transport system:

- comprehensively improve and develop airport facilities in an forward-looking way;

- set up new type of highly effective, transparent and multi-layer, non-interference airport security inspection system;

- fully apply new science and technology, change the concept of air traffic control and set up an air traffic control system with good adaptability;

- set up a comprehensive public information network platform of the industry;

- set up a scientific, comprehensive and proactive rule-based safety management system;

- comprehensively and systematically upgrade weather observation and forecast level so as to greatly reduce the impact of weather on flight;

- set up an airworthiness certification system conforming to international new technology, new standards and new procedures;

- build in an all-round way an corporate culture and industry culture with the characteristics of Chinese traditional culture.

The building of the new generation civil air transport system will start from air traffic control and meteorological service, and the industry will strive to make breakthrough in the said two fields by the end of the 11th Five-Year Guidelines period and then carry out the remaining projects.

III

During the 11th Five-Year Guidelines period, China's civil aviation industry will persist in leading the development of civil aviation with scientific concept of development, change the idea of development, blaze new trails in the mode of development, raise the quality of development. Achieve important progress in establishing a new generation of civil aviation system and build a country with powerful civil aviation industry. On the basis of strong safety support, optimizing structure and greatly improved service, the civil aviation industry of China will make in 2010 total air traffic, passenger traffic and cargo and mail traffic in the volume double the figures of 2005. It will realize an average growth of over 10 percent in general aviation and more extensive application of general aviation in various fields of economy and society.

To realize the above objectives, the civil aviation industry of China will adopt the following policy measures: (1) Unswervingly give first priority to the safeguard of aviation safety. Introduce the safety management concept of putting people first and comprehensive administration, make safety management more proactive, systematic and reliable. By sustained improvement of safety work, the aviation safety of China will reach, by and large, the current level of aviation developed countries. (2) Devote great effort to promote coordinated development. Speed up the development of civil aviation infrastructure in west, northeast and central China and open up more domestic and international air routes. Step up the development of aviation hub in East China and raise international competitive power. Expedite the development of transport on international air routes, air cargo transport, feeder-line aviation and general aviation. (3) Further reinforce the development of infrastructure. In line with the policy of "upgrading Eastern region, strengthen Central region and densify Western region", build an airport system which is rationally distributed, appropriate in scale, complete with functions and coordinated in development. New technologies such as communication, navigation, monitoring, traffic control and meteorology will be adopted in an all-round way and strengthen the development of air traffic control system. (4) Continue to deepen reform and open wider to the outside world. Taking as focal points the change of government functions and the deepening of enterprise reform, expedite the improvement of structure and mechanism. Improve market entry and exit system, reform flight management on domestic and international air routes, reform the management method of flight timetables, reform the policy of price control, exercise fair and orderly competition and improve the modern market system of civil aviation. Coordinate in an overall manner the development at home and opening to the outside world, continue to expand the extent of opening to the outside world. (5) Implement in depth the strategy of rejuvenation with science and technology and qualified personnel.

What I've said is my brief introduction. Now, my colleagues and I are willing to answer your questions.(China.org.cn)

China's Achievements in Civil Aviation in 10th Five-YearPlan Period and Prospects for 11th Five-Year Guidelines Period

General Administration of Civil Aviation of China (CAAC)

February 14, 2006

 1. Tremendous achievements made in reform and development of civil aviation industry during 10th Five-Year Plan period

During the 10th Five-Year Plan period, the civil aviation industry of China explicitly put forward and seriously implemented the strategic idea of building China into a strong civil aviation country, which is considered as our top priority and devoted major effort to pushing forward reform and opening up to the outside world. It markedly raised its transport capability, comprehensive strength and international position and fairly met the requirements of national economy and social development.

(1) Air transport grew by a big margin. According to the preliminary statistics, in 2005 the whole industry carried a total air traffic, passenger traffic and cargo and mail traffic of 25.92 billion ton-km, 138 million passengers and 3.035 million tons respectively, representing increased by 111.6 percent, 105.3 percent and 89.2 percent respectively compared to the figures of 2000. In the five years, average growth of 16.2 percent, 15.5 percent and 13.6 percent were recorded, higher than the average growth rates of the 9th Five-Year Plan period (1996-2000) of 4.8 percent, 9.9 percent for the first two items and 0.6 percent lower than the third item, respectively. It is expected that the total air traffic carried in 2005 by China will be advanced at least 6 places to the 3rd or 2nd place among ICAO Contracting States.

(2) General aviation grew rapidly. According to the preliminary statistics, during the 10th Five-Year Plan period, a total of 336,000 flight hours of general aviation were operated, up by 59 percent over the growth during the 9th Five-Year Plan period, with an average annual growth rate of about 11 percent during the five years. General aviation operation serves industry, agriculture, forestry and petroleum industry, comprising over 100 operation items in 10 categories.

(3) Aviation safety greatly improved. During the five years, an accumulative total of 10.43 million flight hours of transport flight were operated in the whole industry, representing an increase of 70 percent over the figure of the 9th Five-Year Plan period. The major accident rate per one million flight hours was 0.29, a fall of 55 percent compared with the figure of the 9th Five-Year Plan period and better than the world average level. The major accident rate of general aviation operations was 0.064 per 10,000 flight hours, a fall of 64 percent over the figure of the 9th Five-Year Plan period. At the meantime, flight incident rate per 10,000 flight hours was on the decrease.

(4) Service quality improved step by step. Great improvement was seen in the hardware environment of air transport. The flight regularity rate was enhanced to an average level of 80 percent. Airlines and airports paid more attention to humanized and personalized service, actually enhanced service quality and raised the rate of satisfaction of consumers and the public for aviation service.

(5) The size of fleet expanded rapidly. Up to the end of 2005, the whole industry had a fleet of 863 transport aircraft, an increase of 336 aircraft over the figure of 2000. Aircraft maintenance facilities and equipment and technical development were strengthened.

(6) Great achievements scored in infrastructure building. In the five years, a total investment of 94.7 billion yuan was made in fixed assets in the whole industry, an increase of 3 billion yuan over the figure of the 9th Five-Year Plan period. 21 new airports were built and a large number of airports were modified or expanded. By the end of 2005, there were altogether 142 certified civil airports in China. Around 7.8 billion yuan were invested in air traffic control projects. In particular, the completion and inauguration of the Area Control Center at Beijing, Shanghai and Guangzhou have greatly promoted the technical level of the air traffic control system of China's civil aviation. The storage capacity of the fuel supply system reached 1.66 million cubic meters, an increase of 380,000 cubic meters over the figure at the end of 2000.

(7) Major breakthrough achieved in structure reform. During the 10th Five-Year Plan period, a new round of structure reform was achieved in China's civil aviation industry. The airlines and service supporting enterprises formerly affiliated to the CAAC were merged and reorganized, forming six group companies with assets and personnel to be administered by the state-owned Assets Supervision and Administration Commission under the State Council. With the exception of Beijing Capital International Airport and airports in Tibet, all the other airports were handed over to local governments. At the same time, the former three-level administration structure of "CAAC its regional administration -provincial (autonomous region, municipal) administration" was replaced by two-level administration structure of "CAAC its regional administration." Seven civil aviation regional administrations, namely, China Northern, China Eastern, China Central South, China Southwest, China Northwest, China Northeast and Xinjiang regional administrations were set up. Civil aviation provincial (autonomous region, municipal) administrations were removed and 26 civil aviation safety supervision offices were set up, taking the responsibility of safety supervision and market regulation within their respective jurisdictions on behalf of CAAC's regional administrations. Reform was carried out in air traffic control system to form a three-level management and operation framework of CAAC Air Traffic Control Bureau-regional air traffic control bureau-air traffic control center (station). In order to strengthen aviation security, an air police was established. While reforming administration system, adjustments and improvements were carried out in industry control policy to relax market entry by permitting private capital to run airline. Currently, three privately-run airlines, namely, OKAY, SPRING and EAGLE, have entered into service. The control over air route entry, flight scheduling and establishment of operation base were relaxed. The control over pricing was also relaxed. Taking the standard price fixed by the government as the basis, airlines may decide their own prices by floating its prices within the range of 25 percent upward and 45 percent downward. They may completely carry out market prices for tourist routes, short haul routes under acute competition by multi-mode transportation and on routes operated by it as sole operator. With respect to enterprise reform, some airlines and airports were reorganized as joint-stock companies and successfully listed on the market, and obvious results were seen in the change of their internal operating mechanism. By a series of reforms, new industry management structure and operation mechanism were initially established in China's civil aviation industry which were in line with the requirements of socialist market economy and also in line with international practices.

(8) Big strides made in opening to the outside world. Actively develop air transport relations with other countries. In the five years, new bilateral air services agreements or air traffic right arrangements were concluded with 42 countries and by the end of 2005 a total of 98 bilateral air transport agreements were concluded between China and other countries. Efforts were made to explore for the development of regional cooperation in the field of air transport. With respect to the expansion of traffic rights, experiments were made to open the fifth traffic rights of passenger or cargo traffic in such places as Hainan, Nanjing and Xiamen. New regulations concerning the policy of foreign investment in civil aviation industry were promulgated; the proportion of foreign investment and other restrictions were considerably relaxed. A total of US$2.35 billion of foreign investment was utilized in the five years. The exchange and cooperation with foreign countries in the fields of civil aviation management, science and technology and personnel training were strengthened. In 2004, China became a Council Member of the first category of ICAO.

(9) Important progress was made in the building of legal system and in science, technology, education and personnel training. Over the five years, a total of nearly 70 sets of laws, rules and regulations were either established or revised. At present, the civil aviation law and regulation system was basically established and the safety management legislation was gradually got in line with international practices. The idea of management and operation according to law was further implemented in the whole industry. Science and technology were extensively applied in every link of the production and management of civil aviation industry. Excellent progress was made in the 8 major projects in the field of information technology, including the organization and implementation of Departure Control System, Global Distribution System and Civil Aviation Data Communication Network. The planning and implementation of the construction of 10 scientific research bases (key laboratories) were underway. A number of scientific research achievements were awarded with National Science and Technology Prize. The capability of the colleges and schools under CAAC were strengthened continuously, and a large number of specialized and technical personnel were brought up. Through various ways of on-job training the quality of personnel was upgraded. An effective mechanism of personnel training, selection and employment was preliminarily formed.

The tremendous achievements obtained by China's civil aviation industry during the 10th Five-Year Plan period laid an excellent foundation for the development of the industry in the 11th Five-Year Guidelines period and even in longer time. Facing the future, China's civil aviation industry is standing at a new starting point of its history.

2. To meet the needs of the economic and social development of the country and the demands for building a country with Strong civil aviation industry, CAAC advanced the grand concept of building a new generation of civil air transport system

The period from the 10th Five-Year Plan period to 2020 is an important period for building China into a well-off society in an all-round way and is also an important strategic period of opportunity. The civil aviation industry of China already brought up its objective of a struggle to realize a leap from a large aviation country to a country with strong civil aviation industry during the first 20 years of this century. To meet the needs of the economic and social development of the country and the demands for building a country with strong civil aviation industry, CAAC recently further advanced the grand concept of building a new generation of civil air transport system.

To build a new generation of civil air transport system, we must persist in the idea of human-centric, adopt advanced ideas, mode and technology, transform, optimize and upgrade existing civil aviation service system. The system will fully make use of the currently emerging advanced science and technology such as modern communication, accurate orientation, computer network, computer assisting policy decision, and pursue the road of integration, innovation, introduction, digestion, absorption and renovation. Such a system will enable passengers, Chinese and foreign, to enjoy more expeditious, safe and comfortable air trip. It will greatly reduce the impact of factors such as traffic flow and weather on flight operation. It will also further shorten the time for passengers to enter the terminal building upon departure, to leave the terminal building upon arrival at the destination and to change aircraft. This system will not only considerably upgrade the air transport of China in quantity, but also leap forward in quality.

The objectives of a new generation of civil air transport system:- comprehensively upgrade and develop airport facilities in perspective;- set up new type of highly effective, transparent and multi-level, non-interference airport security inspection system;- fully apply new science and technology, change the concept of air traffic control and set up an air traffic control system with good adaptability;- set up a comprehensive public information network platform of the industry;- set up a legal, scientific, comprehensive and proactive safety management system;- comprehensively and systematically upgrade weather observation and forecast level, greatly reduce the impact of weather on flight;- set up an airworthiness certification system conforming to international new technology, new standards and new procedures;- build in an all-round way an enterprise culture and industry culture with the characteristics of Chinese traditional culture.

The civil aviation industry will introduce the project of building the new generation of civil air transport system beginning from the of 11th Five-Year Guidelines period. Starting from air traffic control and meteorological service, the industry will strive to breakthrough in the said two fields by the end of the 11th Five-Year Guidelines period and then carry out the remaining fields.

3. Prospects of development of China's civil aviation for 11th Five-Year Guidelines period

The 11th Five-Year Guidelines period will be a critical period for China to build itself into a country with powerful civil aviation industry. During the coming five years, both opportunity and challenge will exist. The comparison of political forces in the world is favorable to keep a stable international environment and the trend of economic globalization is developing in depth. The technique of aircraft manufacturing industry is advancing and the technique of air traffic control is developing rapidly. The trend of liberalization, forming regions and alliances as well as cost-reducing continue to be stepped up. The economy of China will still be in the stage of fast growth; tourism and cargo trade will increase rapidly. Important events such as the Beijing Olympic Games, Shanghai World Fair and Guangzhou Asian Games will be held. Cross-Straits economic, technological and cultural exchange will be on the increase. Generally speaking, domestic and international environment will be favorable to the development of civil aviation. At the same time, the further development of world civil aviation industry will pose severe challenge to the competitive power of China in civil aviation; it is possible that the price of aviation oil will continue to be high. Along with the fast growth of the demand for air transport, (personnel quality, infrastructure and management level will not be able to catch up with the demand. These problems and the shortage of usable airspace will present apparent contradictions.) Particularly the shortage of flight personnel and the shortage of usable airspace are two big bottlenecks restricting the development of civil aviation in China. The civil aviation of China will firmly seize opportunities to deal with challenges, solve and breakthrough contradictions and bottlenecks affecting development. It will open up new prospects so as to lay a solid foundation for its smooth development in the following 10 years.

During the 11th Five-Year Guidelines period, China's civil aviation industry will persist in leading the development of civil aviation with scientific concept of development, change the idea of development, blaze new trails in the mode of development and raise the quality of development. It will enter the track of overall coordination of sustainable development, achieve important stage progress of establishing a new generation of civil aviation system and build a country with powerful civil aviation industry. On the basis of strong safety support, optimizing structure and greatly improved service, the civil aviation industry of China will realize in 2010 total air traffic, passenger traffic and cargo and mail traffic in the volume double the figures of 2005. It will realize an average growth of over 10 percent in general aviation and more extensive application of general aviation in various fields of economy and society.

To realize the above objectives, the civil aviation industry of China will adopt the following policy measures:

(1) Unswervingly give first priority to the support of aviation safety. Introduce the system safety management idea of taking man as the foundation and comprehensive administration, strengthen the initiative, system and reliability of safety management. Further improve the system of aviation safety laws, regulations and standards, innovate safety supervision and management system, strengthen safety technology support system, improve emergency search and rescue system and optimize safety management information system. By sustained improvement of safety work, the aviation safety of China will reach, by and large, the current level of aviation-developed countries.

(2) Devote great effort to promoting coordinated development. Speed up the development of civil aviation infrastructure in west, northeast and central China and open up more domestic and international air routes. Step up the development of aviation hub in east China and raise international competitive power. Adopt effective policy measures to expedite the development of transport on international air routes, air cargo transport, feeder-line aviation and general aviation. Speed up the development of central hub system and implement the operation of hub-spoke type of route network. Energetically expand the use of electronic transport documents.

(3) Further reinforce the development of infrastructure. In line with the policy of "upgrading Eastern region, strengthening Central region and densifying Western region," build an airport system rationally distributed, appropriate in scale, complete with functions and coordinated in development by expanding large airports, improving medium-sized airports and increase small airports. New technologies such as those in communication, navigation, monitoring, traffic control and meteorology will be adopted in an all-round way and strengthen the development of air traffic control system. Plan will be made for the distribution of oil supply facilities and efforts will be concentrated on building up a number of oil supply projects.

(4) Continue to deepen reform and open wider to the outside world. Taking as focal points the change of government functions and the deepening of enterprise reform, expedite the improvement of structure and mechanism. Set up industry credit system, improve market entry and exit system, reform flight management on domestic and international air routes, reform the method of flight timetables, reform the policy of price control, exercise fair and orderly competition and improve the modern market system of civil aviation. Plan as a whole the development at home and opening to the outside world, continue to expand the extent of opening to the outside world, and step up the capability of development under the condition of opening to the outside world.

(5) Implement in depth the strategy of rejuvenation with science and technology and qualified personnel. Integrate scientific and technological resources, exert efforts to raise innovative capability, especially the capability in integrated innovation and introduction, digestion, absorption and renovation. Set up industry of study type and develop education in civil aviation institutions and school as well as on-job training. Set up long-effect mechanism for the development, use and management of human resources, which is suitable for the development of civil aviation.(China.org.cn)

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