VZCZCXYZ0000
RR RUEHWEB
DE RUEHGZ #0711/01 3430712
ZNR UUUUU ZZH
R 080712Z DEC 08
FM AMCONSUL GUANGZHOU
TO RUEHC/SECSTATE WASHDC 0048
INFO RUEHGZ/CHINA POSTS COLLECTIVE 0013
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC 0011
RUEAIIA/CIA WASHDC 0013
RUEKJCS/DIA WASHDC 0013
RHMFIUU/FAA NATIONAL HQ WASHINGTON DC 0001
UNCLAS GUANGZHOU 000711
SENSITIVE
SIPDIS
E.O. 12958: N/A
TAGS: EAIR ETRD EINV ECON PGOV CH HK TW
SUBJECT: CHINESE CIVIL AVIATION: PLANNING FOR THE FUTURE IN SOUTH
CHINA
1. (U) Summary: An early-November agreement on direct charter
flights between Taiwan and mainland China will have a negative
effect on the number of passengers transiting Macau, according to
aviation experts gathered for Zhuhai's biannual Airshow China at the
2008 Guangdong-Hong Kong-Macau-Taiwan (GHMT) Aviation Industries
Forum on civil aviation development. The ability of Taiwan's
tourism infrastructure to absorb increasing numbers of mainland
tourists remains a concern to aviation policy experts. Improving
access to air travel in China's north, center and west will require
new airports and better coordination between regionally co-located
airports. Tight military control and a dearth of pilots continue to
constrain Chinese civil aviation, according to an industry
representative. End summary.
Cross-Straits Agreement Important, but not Satisfactory
--------------------------------------------- ----------
2. (U) The November 4 agreement to permit direct charter flights
between Taiwan and the Mainland was "important, but not
satisfactory," according to Chinese Aviation Industries Education
Foundation Chairman Chang Kuocheng, who said there remained much
work to be done. At the early November forum in Zhuhai, he said
improved communication among cross-Strait organizations was an
important factor leading to the agreement. However, Chang commented
that Taiwan's tourism infrastructure -- which, he said, is not as
developed as the island's overall economy, a theme we have heard
repeatedly in south China, from real estate magnets as well as
travel experts -- was a constraint that needed to be addressed if
Taiwan were to take advantage of increased numbers of tourists from
the mainland. As one example, Chang said that Taoyuan Airport
(note: formerly Chiang Kai Shek International Airport) was "every
[airline's] favorite in Taiwan," claiming that none of the island's
other airports was a viable alternative from a logistics and
infrastructure perspective.
3. (U) Direct flights could potentially have a dire effect on
Macau's airport, according to Hong Kong-Zhuhai Airport Management
Company President Cheng Weiman. Cheng said that, even before the
November 4 agreement, the number of passengers using Macau to
transit between Taiwan and the Mainland had fallen from 80 percent
of passenger volume to 39 percent, without any significant increase
in other traffic.
General Aviation Lags Behind
----------------------------
4. (U) China's civil aviation development is uneven and
insufficient, according to Civil Aviation Administration of China
(CAAC) Vice Minister Wang Changshun. Wang said that plans to
increase the number of China's airports to 240 by 2020 would improve
service to the country's west, center and north. Under the planned
expansion, up to 80 percent of the population -- "including those
living in rural and poor areas" -- would have access to air travel.
(Note: Wang was clearly referring to geographic, not financial
access; no mention was made of radically altering ticket pricing
schemes to provide more access for the less wealthy.) Wang added
that better coordination on regional airport development was needed
to equitably distribute international and domestic flights among
airports in the same region. (Comment: a number of China's airports
already operate at a loss, which could result in industry resistance
to the planned expansion. Embassy Beijing notes that the government
may be requiring airlines to open potentially unprofitable routes to
remote and underserved areas as a quid pro quo for permission to
open other, more popular and lucrative routes elsewhere. End
comment.)
Zhuhai as a Center for General Aviation Support?
--------------------------------------------- ---
5. (U) A dearth of pilots and tight military control remain major
obstacles to the development of Chinese civil aviation, according to
China Aviation Industry Corporation President for General Aviation
Tan Weidong. Tan said that the country's 1000 general aviation
pilots -- which he compared to 400,000 in the United States --
lacked leadership and management experience. Nonetheless, Tan
characterized the future of civil aviation in China as "promising,"
predicting that 2008 revenues of RMB 15 billion (about USD 2.2
billion) would increase to RMB 60 billion by 2015 and double again
to RMB 120 billion by 2020. Tan said plans were in the works to
establish a general aviation base in Zhuhai that would serve as both
a headquarters and research center.
6. (SBU) Lufthansa General Manager for Hong Kong, Taiwan and Macau
Michael Suesser said he thought that Zhuhai had done a good job
positioning itself as a center for aviation research and pilot
training, but that any hope of becoming the Pearl River Delta's
"third hub" -- after Guangzhou and Hong Kong -- was completely
unrealistic. Suesser noted that Lufthansa had no plans to expand
its operations into Zhuhai for the foreseeable future.
GOLDBERG