China Aviation Law
13Dec/10Off

Chinese Airlines to Pay for Delays (in theory) – 航班延误赔偿”标准”

dcgb240802

In 2004, the CAAC promulgated rules that mandate that airlines compensate passengers who are delayed for more than 4 hours. However, those rules, in 《航班延误经济补偿指导意见》, did not provide any details on the amount, means, or enforceability of that compensation. Recently, the China Air Transport Association has promulgated a provisional regulation that outlines those areas. The document "Provisional Air Transport Service Rules for Service and Compensation on not-as-scheduled flights" 航空运输服务质量不正常航班承运人服务和补偿规范(试行), outline compensation and service standards in the case of  not-as-schedule flight. (Anyone have a better way to translate 不正常It literally means "not normal.")

The rules propose compensation for delays which are attributable to the airlines, e.g. flight plan, maintenance, flight deployment, transportation services and crew troubles. If the delay lasts four to eight hours, airline companies are required to provide ticket discounts, equivalent mileage accumulation or other compensation worth 300 yuan or 200 yuan in cash. If the delay is longer than eight hours, airline companies are required to provide ticket discount, equivalent mileage accumulation or other compensation worth 450 yuan or 300 yuan in cash. (Stealing a joke from Shanghaiist: I hope that the "other compensation" is not free tickets to the expo.)

However, delays attributable to the following non-carrier problems will not be compensated - weather, emergencies, air traffic control, passengers' security inspection,  and public safety. As the vast majority of delays in China are attributed to its schizophrenic division of air traffic services by the military, or the weather, I doubt this policy will see much effect.

Finally, as it is an industry promulgated policy, which is not binding in a legal sense, airlines are free to ignore it. Indeed, Shanghai's Spring Airlines (a ultra-low cost carrier) has decided not to participate in the policy. Indeed, it may even be ignored by the industry association that promulgated the policy. The CATA is no longer advertising its existence and has removed the press release from its website.

For Chinese news coverage of this story:

http://tour.rednet.cn/c/2010/11/03/2103282.htm

http://www.chinanews.com.cn/cj/2010/11-03/2631364.shtml

For English news coverage of this story:

http://english.peopledaily.com.cn/90001/90776/90882/7185323.html

http://shanghaiist.com/2010/11/03/chinese_airlines_required_to_pay_yo.php

24Oct/10Off

China designates low-altitude airspace for general aviation 国务院 中央军委关于深化我国低空空域管理改革的意见

FCGA_Small

The state of private aviation in China is nothing like private aviation in the United States. If you are able to get your hands on a Cessna in China will not be able to do much flying. All flights must be on filed IFR flight plans and all flight must be pre-approved by the ATC. The result is that there is essentially no general aviation market outside of commercial training for the airlines.

This news is the first crack in the right direction for general aviation. The CAAC will start designating certain low-altitude general aviation corridors. The general aviation airspace will be restricted to below 1000 meters (about 3300 feet). There is no detail as when or how this will be implemented. Indeed, while it is a nice push in the right direction, these rules will not likely see much of an effect on general aviation as there is little air in china that is VFR and conflicting rules as how to use this soon to be designated space.

With the number of unmarked towers, guy wires and general pollution in that altitude range. I will be in no hurry to use the corridor.

That said, GA is expected to continue to grow in China. Indeed, the CAAC expects rapid growth in the next few years.

The Civil Aviation Administration of China (CAAC) expects that the market size of general aviation, including related industries, may reach one trillion yuan ($151 billion) after the low-altitude airspace opens, according to a Xinhua report.

An official surnamed Zhang with the China Aviation Industry Corp II(AVIC II)told the Global Times that China's huge potential demand for helicopters and light planes – from government agencies and the growing billionaires' club – has already become a reality in recent years, spurring the country to lift its long-standing restriction on the use of airspace below 3,000 meters.

“The strict control of low-altitude airspace has long been regarded as a bottleneck in the country's aviation development; now it is a good way to boost the national aviation industry as it can spur the potential domestic aviation consumption and lure more investment into the industry,” Zhang said.

In addition, the reform will also lead to more people acquiring a private pilot license, either billionaires who own a helicopter or people employed by the private commercial airplanes leasing company, an official surnamed Li with China Civil Aviation Flight University told reporters.

But it is certainly still very expensive to have a private plane, as it costs 160,000 yuan ($22,857) to obtain a private pilot’s license in China after a strict physical examination and a series of theory classes and practice training. The fee for flight membership is 300,000 yuan ($42,857) per 100 hours, and the maintenance of the aircraft costs 5 percent of its price per 200 flight hours.

Industry insider Yang Ruoyi told the Global Times that the reform still faces challenges, such as the lack of laws to standardize low-altitude flying and underdeveloped equipment for air traffic supervision.

“A real opening of the low-altitude airspace requires a series of other regulations concerning the authorization of flights and control of purchase of private planes,” he said

Source: Low-altitude Airspace Management Reform Guidance

Main Text of the Promulgation After the Jump:

6Oct/10Off

Aviation Business Between Mainland And Taiwan To Enjoy Exemption from Enterprise Income Tax

2010092900151

In a move to motivate tourist and business travel between Taiwan and China, the CAAC and the Ministry of Finance have announced policies to increase cross-straight traffic.

The CAAC announced that the it will increase the alloted slots to Taiwanese airlines.

The Taiwan Affairs Office of China's State Council announced earlier Wednesday the increase in the number of flights across the Taiwan Strait, including an additional 14 flights to Shanghai, four to Beijing, four to Shenzhen, 11 to Xiamen and Fuzhou, two to Qingdao and one to Changsha.

Source: http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201009290015

Similarly, the Ministry of Finance has announced certain tax benefits to direct traffic. These benefits will include exemption on enterprise tax and certain retroactive tax benefits for airlines from June 2009.

According to this new rule, from 25 June 2009, incomes of Taiwan airline companies received in the Chinese Mainland from their direct aviation business between the Chinese Mainland and Taiwan shall be exempt from business tax. Any business tax that should not be collected but has already been paid by any Taiwan airline company from 25 June 2009 to the date of receiving this document shall offset its business tax payable afterwards; if the business tax that has been collected is more than the business tax payable for the remaining period within 2010, the excessive tax payment shall be refunded.

Source: http://blawg.lehmanlaw.com/wordpress/?p=626

For the text of the policy statement from the Ministry of Finance see: http://www.e-to-china.com/tariff_changes/Policy_Focus/2010/0928/86874.html

This is good news to an industry that has seen double digit over the last year.