Comparison of subsidies between Chinese and American small and medium airports

Comparison of subsidies between Chinese and American small and medium airports

Source: Singapore Open Rui management consulting firm Aviation Research Center Author: Lee may Realing 2009-09-15 17:23:09 I have two sentences ( 1 )

[ professional classification ] airport operation [ Article ID ] 37-2009-0172

1. Since the deregulation of American Airlines, Inc. on October 24, 1978, each community airport is in principle eligible for EAS (Essential Air Service) subsidies. In March 2009, Obama’s fiscal year 2010 administrative budget included plans to provide $55 million in additional subsidies to small community airports such as Jamestown and Watertown.

1) Subsidy principle: The amount of subsidies available to a community airport depends on:

The hub between the community airport and the community airport is more than 70 miles away.

The number of available seats provided by the aircraft arriving at the hub airport at the community airport, the maximum number of dockable stations in the middle, and the number of round trips.

Community airports subsidize less than $200 per passenger (annual subsidy levels divided by annual passengers), but each passenger who has reached the nearest large and medium-sized hub for more than 210 miles can be exempt from $200.

2) Subsidy method: The US EAS plan is a financial subsidy plan for maintaining small and medium-sized community aviation services. It is funded annually by the Ministry of Finance, managed by the Ministry of Transportation, and operated by airlines and executed by the airline.

3) Subsidy amount:

In 2007, EAS received a total of $127 million in subsidies, which were obtained by 103 communities, with a maximum of $1.93 million and a minimum of $7520. As of April 1, 2009, a total of 153 communities received DOT (US Department of Transportation) subsidies. In 2009, the EAS subsidy budget was $123 million.

Obama's 2010 administrative budget will provide $55 million in additional federal government funding.

4) Subsidy effect:

EAS and additional government funding will be used to ensure that small airports continue to operate, enabling more than 100 recipient community residents to benefit from low-cost airline services for many years.

According to the specific aviation needs of the community, the community airport will apply again every two years, avoiding the repeated waste of subsidies, making the subsidies more timely and effective. At the same time, the implementation of the EAS program ensures the employment of the airport personnel in the subsidized community.

2. In October 2007, the former Civil Aviation Administration promulgated the Measures for the Administration of Subsidies for Civil Aviation Small and Medium Airports and the Measures for the Administration of Subsidized Aviation Subsidies.

1) Subsidy principle:

The small and medium airport subsidy policy focuses on supporting airports with annual passenger throughput below 5 million passengers.

The regional aviation subsidy policy focuses on intra-provincial (regional) or inter-provincial (regional) with a passenger load factor below 80% but at a distance of less than 600 km and at least one end of the feeder airport. The off-season flight volume is at least 20% of the peak season flight volume. The route is subsidized.

1) Subsidy method: On December 25, 2007, the Civil Aviation Administration of China promulgated the “Implementation Measures for the Civil Aviation Special Fund Investment Subsidy Airport Construction Project”. The investment subsidies for small and medium-sized airports and the subsidies for regional aviation subsidies are derived from the construction management fees for civil aviation airports (the concentration is about 50% of the total).

The subsidy for small and medium-sized airports consists of two parts: fixed subsidy and variable subsidy [1].

Table 1 Fixed subsidy standard unit: 10,000 yuan

First category [2] Second category Third category
First gear [3] 290 430 575
Second gear 165 190 240
Third gear 160 190 225
Fourth gear 130 145 160

Table 2 Standards for variable subsidies: yuan/person

First category Second category Third category
First gear 2.95 4.42 5.9
Second gear 4.42 5.9 7.37
Third gear 7.37 8.84 10.32
Fourth gear 11.79 13.26 14.74

The feeder subsidy standard is determined based on the category of the feeder area and the annual average passenger load factor.

Passenger load factor The first type of branch line [5] The second type of branch line [6] The third type of branch line [7]
60% (inclusive) -80% 20 40 60
30% (inclusive) -60% 40 80 120
30% or less 60 120 180

2) Subsidy amount:

The Civil Aviation Administration of China and the Ministry of Finance shall determine the actual amount of subsidies based on the above criteria in accordance with the annual budget for subsidy funds. The subsidy for small and medium-sized airports is more than one billion yuan. In 2006 and 2007, 122 and 123 airports received subsidies, of which the central and western regions accounted for more than 70% of the airport subsidies.

The Civil Aviation Administration of China and the Ministry of Finance determine the amount of subsidies for the flight segment according to the subsidy standard for the feeder line and the passenger transportation volume for the previous year. The subsidies for regional aviation totaled more than 5 billion. In 2006 and 2007, 232 and 258 feeder lines were subsidized respectively, and 70%-80% of the subsidies were concentrated in the southwest, Xinjiang, northwest and northeastern regions.

3) Subsidy effect:

Promote airlines' route network to second- and third-tier cities, especially in underdeveloped areas, thus bringing greater convenience to passengers' air travel.

Two subsidies provide subsidies to small and medium-sized airports across the country. In 2007 and 2008, the passenger traffic of the 30 counties in the country was 672,000 and 373,000, respectively, a drop of 44.5%. Despite the economic crisis in 2008, the total passenger traffic of the national airport increased by 4.7%.


1. The subsidies for small and medium-sized airports in China and the United States differ greatly in terms of subsidy principles, standards, quotas, and effects. In contrast, the US subsidy program is more efficient.

1) The principle standards for subsidies for small airports in China and the United States are different:

China uses throughput as a single standard to determine subsidy targets. According to regional and airport throughput, the national airport is divided into 12 subsidy standards. Instead of subsidizing the specific needs of the airport, it is “uniform”;

The United States considers the distance between the community airport and the hub airport, and the choice of model to determine the subsidy target. The application is first applied to the community and then reviewed by the Ministry of Communications to determine the specific subsidy standards for the community.

In contrast, US subsidies are more comprehensive in considering the differences between airports, and subsidies are based on actual demand, and the subsidy method is more reasonable.

2) The subsidies for small and medium-sized airports in China and the United States are different:

In 2007, China received an average subsidy of about 1 million to 2 million yuan per aid airport, while the airport's annual operating cost of 50,000 passengers would cost about 8 million yuan (excluding depreciation of fixed assets) [8], airport subsidies. For some small airports, it is not enough;

In 2007, the average US airport received US$1.233 million, and in 2009 it received US$1.079 million. The amount of unit subsidies decreased and the amount of subsidies varies greatly from airport to airport. Because community airports reapply subsidies every two years, such subsidies are limited. It is determined based on the normal operation of the community airport to meet the minimum service level.

3) The effect of subsidies for small airports in China and the United States is different:

Since the implementation of the subsidy scheme for small and medium-sized airports, the throughput of small and medium-sized airports has not increased significantly. On the contrary, the throughput of small and medium-sized airports with more subsidies has not increased in 2008, the effect of subsidies is not obvious, and the number of feeder airports is idle. low;

The US EAS program has been in operation for more than 20 years, and airlines provide scheduled flight services and more stable fares with reliable economic benefits.

2. The difference in subsidy methods and subsidy quotas has led to differences in subsidies between Chinese and American small and medium airports.

1) Different subsidies for Sino-US regional lines result in different subsidy efficiencies and gaps in subsidy effects.

China: Subsidies are based on regional economic development combined with throughput and load factor. With throughput as a single standard, the fixed subsidies in the same region are more subsidies for airports with higher throughput; the variable subsidies are less for the same region. The airport received more subsidies for single people, but the first-rate throughput in the same region was about 7-14 times that of the fourth gear, while the subsidy unit price was only five times different. In this way, the more the throughput is obtained in the same region, the more subsidies are obtained. The airports with small throughput that really need subsidies actually receive very little subsidies, the subsidy efficiency is low, and the subsidy effect is naturally poor.

United States: According to the actual aviation service needs of the community, the subsidy amount is separately calculated based on the convenience of aviation services. Meet the aviation service requirements of their rural communities.

2) Sino-US airport subsidy financing channels are different, the amount of subsidies is different, and the subsidy effect is also different.

China: The main fund for civil aviation airport construction management fees is mainly. The subsidy channel is single and the funds are limited. The subsidies invested in the unit airports are relatively low, and the subsidies received by the small and medium-sized airports are difficult to survive and the original intention of subsidies cannot be realized.

United States: Diversified sources of subsidies: Passenger Facility Charges, FAA Fund Grants (ie aviation trust funds), airport business income, local government subsidies, and issuance of bonds. The combination of government investment and market financing can guarantee a stable and stable subsidy.

3. Suggestions on subsidies for small and medium airports in China

1) Optimize subsidy methods to improve subsidy efficiency.

At present, China's regional aviation subsidies and small and medium-sized airport subsidies are an inefficient subsidy method. The regional development needs and the actual aviation needs of the region should be considered as reasonable subsidies, rather than simply sub-regional subsidies. This will not only improve the efficiency of subsidies, but also improve the subsidy effect.

2) Expand subsidy financing channels, establish long-term stable airport investment and financing channels, and moderately increase subsidies.

Actively expand investment and financing channels, encourage social funds and foreign investment to enter the airport investment field, and strive to explore low-cost financing methods such as bond financing and project financing. Local governments will conduct matching investment to attract market capital to enter airport subsidies.

Continue to retain the investment policy of the civil aviation special fund and moderately increase subsidies to support the normal operation of the regional airport. At the same time, the strategic planning of the feeder line makes the route network more reasonable, which minimizes the operating cost of the airline route, making it possible to reduce the subsidy of a single route, making the subsidy more effective. (Kai Rui Consulting Li Ruijuan, Li Yike)


1. Civil Aviation Resource Network

2. China Civil Aviation Administration

3. Civil aviation small and medium airport subsidy management measures

4. Measures for the management of regional aviation subsidies

5. Implementation Measures for Airport Construction Projects for Investment Funds of Civil Aviation Special Funds

6. US EAS Funding Report

7, Kairui consulting civil aviation industry database

[1] The subsidy standard for military-civilian joint airport is up 20% according to the same airport subsidy standard, and the tourist hotspot city airport with larger passenger flow is executed at 50% of the same airport subsidy standard.

[2] The first type of eastern regions include Beijing, Tianjin, Shanghai, Zhejiang, Jiangsu, Shandong, Fujian, Guangdong, and Liaoning; the second type of central regions include Hebei, Shanxi, Henan, Hubei, Hunan, Anhui, Jiangxi, Jilin, and Heilongjiang. Hainan; the third category of western regions includes Inner Mongolia, Guangxi, Chongqing, Sichuan, Yunnan, Guizhou, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.

[3] First gear: Airport with annual passenger throughput of 2 million to 5 million passengers (including); second gear: airport with annual passenger throughput of 5 to 2 million passengers (including); third gear: annual passenger throughput of 30 - 500,000 passengers (including) airports; fourth gear: airports with annual passenger throughput of 300,000 passengers or less.

[4] The subsidy standards for the off-season will rise by 20% in accordance with the above standards and 20% in the peak season. The light and peak seasons of each branch line will be determined by the Civil Aviation Administration of China according to the actual situation.

[5] The first type of branch line: 16 provinces and municipalities directly under the central government (including Beijing, Tianjin, Shanghai, Hebei, Shanxi, Jiangsu, Zhejiang, Fujian, Shandong, Anhui, Jiangxi, Henan, Hubei, Hunan, Guangdong, Hainan) Inside the branch line.

[6] The second type of branch line: 16 provinces and municipalities in the central and central regions and 15 provinces, autonomous regions and municipalities in the west and northeast (including Inner Mongolia, Guangxi, Sichuan, Yunnan, Guizhou, Tibet, Chongqing, Shaanxi, Gansu, Ningxia, Qinghai, The branch line between Xinjiang, Liaoning, Jilin, and Heilongjiang.

[7] The third type of branch line: the branch line within the scope of 15 provinces, autonomous regions and municipalities in the west and northeast.

[8] Data source: Kairui Consulting "Western Small Airport Positioning Research Report"