China's civil aviation on long runway to recovery

Subsidies ease woes

To help airline companies get through this difficult time, including declining passenger trips and rising fuel costs, government subsidies are being offered to carriers operating 4,500 or fewer domestic commercial flights daily, according to the Civil Aviation Administration of China and the Ministry of Finance.

Those flights do not include flights in Hong Kong, Macao and Taiwan, flights undertaking emergency transportation tasks or flights operated by business jets.

The Ministry of Finance will provide 65 to 80 percent of the funds. Local governments in departure cities will fund the remainder, and the portion varies for different regions.

The policy is designed to run from May 21 to July 20. It has stabilized the sector's operation, leading to an increase in the number of commercial flights and steady pricing.

Other government subsidies, such as tax relief and financial credits, are also being provided to the sector according to a joint guideline released by the National Development and Reform Commission and other government departments in February.

"It is a positive sign the State understands the challenges the sector faces and has the willingness to help the sector get through difficult times," said civil aviation expert Yu Zhanfu, partner and vice-president for the China unit at consultancy Roland Berger.