WTO Entry Will Not Have Strong Impact on Aviation Industry

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Last updated at: (Beijing Time) Tuesday, November 20, 2001

WTO Entry Will Not Have Strong Impact on Aviation Industry

China' WTO Entry, No Strong Impact on China's Aviation Sector

China's entry into the World Trade Organization (WTO) will not have a strong impact on China's civil aviation industry, sources with the General Administration of Civil Aviation of China (CAAC) said Monday.

This is because it will only open parts of its service sectors to foreign companies after China becomes an official member of the WTO -- unlike other service industries like banking and insurance.

Wu Zhouhong, an official with the International Co-operation Department under CAAC, said the formal document detailing what China has committed itself to after joining the WTO is expected to be unveiled early next month.

MRO Will Be Opened Widest to Foreign Companies

The aircraft Maintenance, Repair and Overhaul (MRO) is the service sector that will be opened widest to foreign companies.

Foreign firms are allowed to establish companies in China -- either in the form of joint venture or independent companies -- to operate MRO business for Chinese or international air carriers.

But this does not represent a watershed move as foreign companies have already helped establish MRO companies in partnership with Chinese airlines.

Air China and Germany-based Lufthansa Airlines established a MRO company -- AMECO -- in 1994 in Beijing. AMECO now provides MRO services to many air carriers who land their planes in Beijing.

Shanghai and the Guangdong Province also established MRO joint ventures in the 1990s.

Wu said the MRO sector has opened to foreign companies for years and the focus would be on the redistribution of stock structure inside those MRO companies after China becomes an official member of the WTO.

Consumers Can Buy Air Tickets from Foreign Airlines Through Agents.

Other fields such as ticket sales and seat reservation services have also taken root in China in past years, Wu said. Costumers in major Chinese cities can easily buy air tickets from foreign airlines through agents.

Wu said CAAC needs to allow foreign airlines to open more direct ticket agents in China in the months and years after the nation joins the world trade club.

Issues on Who Can enter China's Airspace

WTO rules do not cover some tough issues like opening the airspace of its members, so CAAC will still have full rights to determine who can enter China's airspace.

Wu said CAAC would discuss the issue actively through bilateral negotiations with relevant members. Its attitude has been to welcome international air carriers to compete in China's aviation market.

WTO Brings Chinese Airlines More Opportunities

Wu said he thought WTO membership will bring Chinese airlines more opportunities.

"More passenger and cargo transportation will be available following China's WTO entry,'' Wu said.

But he also made it clear China's airlines must first learn to survive in the market-based economy.

Lufthansa to Expand Routes to China

Germany's Lufthansa Airlines will expand its business along the China-Germany route and schedule more flights to major Chinese cities.

Despite the overall slump in global economy, China's economy will keep growing, and its aviation market will keep growing, said chief executive of Lufthansa Group.

Lufthansa is now in a sharing arrangement with China's flagship airline, Air China, on routes between China and Germany.

But by the end of this year, Lufthansa will extend its services into other six cities -- Xi'an, Dalian, Guangzhou, Chengdu, Nanjing and Hangzhou, through Air China's network.

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