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By Danny Lee for Bloomberg and CAAC
China Eastern Airlines Co. is pulling its twice-weekly flight from Wenzhou to Madrid at the end of this month.
The carrier has stopped accepting bookings for the route after October 27, which started in November last year, its website shows. While Wenzhou, about 460 kilometers (285 miles) south of Shanghai has a population of 9.8 million — larger than New York City — its airport doesn’t offer a vast range of international flights, with only services to Rome, Milan, Tokyo, Seoul and Bangkok left.
It is said that maybe it it is because of a new policy by Civil Aviation Administration of China issued at the end of August , Guiding Opinions on Advancing the Construction of International Aviation Hubs.
It sets out rules that propose subsidies be scaled back to just a handful of major Chinese airports. They also suggest international flights should be concentrated around the busiest and biggest cities of Beijing, Shanghai and Guangzhou.
A review into the legality of some international flight route subsidies is also planned, the CAAC document shows.
Indeed from 2014 to 2023, China’s top three airlines, including Air China Ltd. and China Southern Airlines Co., amassed some 111.1 billion yuan ($15.7 billion) in subsidies or government grants aimed at encouraging them to operate air links, the carriers’ annual reports show.
There’s concern those payments mask the efficiency, or lack thereof, of some weaker airports and routes in China, undermining the robustness of the nation’s aviation sector more broadly.
Strengthen cooperation with market regulation departments to standardize market competition practices. Local governments are not allowed to arrange subsidies for international routes connecting to airports other than international hub airports. A legality review of subsidies for international flight routes will be carried out to prevent certain subsidy practices from disrupting the environment of China's international air transport policies and the order of fair competition in the market. Local governments should be guided to support the orderly development of international air transport, create a fair competition environment in the international air transport market, and promote the effective implementation of China's aviation hub policies.
加强与市场监管部门合作，规范市场竞争行为。连接除国际枢纽机场外其他机场的国际航线，地方政府不得安排航线补贴。开展国际航线航班补贴合法性审查，防止一些补贴做法扰乱我国国际航空运输政策环境和公平竞争市场秩序。引导地方政府支持国际航空运输有序发展，创造国际航空运输市场公平竞争环境，促进我国航空枢纽政策有效实施。
《关于推进国际航空枢纽建设的指导意见》
中国民用航空局 国家发展和改革委员会
https://www.caac.gov.cn/XXGK/XXGK/ZCFB/202408/P020240828606187893511.pdf
Source: Bloomberg and CAAC
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