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Airlines swoop on China's tier 3-4 cities in search of growth

03/28/2019| 9:05:16 AM|

The upsurge is due to local authorities attracting carriers with subsidies and a jump in consumption by local residents at the same time.

Civil airports in China's third- and fourth-tier cities saw passenger numbers climb more than 20 percent last year, double the rate of increase for hubs in the first- and second-tier urban centers.

Industry professionals told Yicai Global that the upsurge is due to local authorities attracting carriers with subsidies and a jump in consumption by local residents at the same time as these places become tourist destinations.

Some airlines want to ply routes to cities like Shanghai, Nanjing and Hangzhou but find it difficult to access landing slots there, according to Li Xiaojin, a veteran civil aviation expert. The ability to land and take off during prime time is crucial, he added.

This has forced some carriers to shift focus to airports in third- and fourth-tier cities, hoping to turn a profit on such routes in two or three years, by which time the slots will have become gold.

Third- and fourth-tier cities have huge scope for passenger volumes and airport numbers, according to Liu Wei, assistant research fellow at the National Development and Reform Commission's Institute of Comprehensive Transportation. Local authorities generally subsidize early air routes, especially those heading for major airports in Beijing, Shanghai and Shenzhen.

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TAGS: civil aviation | carriers | third- and fourth-tier cities
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