Domestic carriers are expected to fly 11 percent more passengers this year thanks to government efforts to boost demand.

China aims to increase air passenger volume by 11 percent to 220 million this year, compared to the 3.3-percent growth of last year, according to the Ministry of Transport.

The volume of cargo and mail will grow by 8 percent to 4.37 million tons, compared with 0.2-percent growth of last year, the ministry said on its Website yesterday.

China's civil aviation regulator will introduce policies to stimulate the domestic aviation industry which has been dampened by the financial turmoil, declining demand and sharply fluctuating oil prices.

The efforts include setting up express routes to compete with the high-speed railway to link Beijing and Shanghai, increasing the number of flights and bolstering regional airlines.

The country will also invest between 80 billion yuan (US$11.7 billion) and 100 billion yuan in infrastructure this year with 22 key projects, including the renovation of Shanghai's Hongqiao Airport and enlarging the flight zone at Tianjin Binhai Airport.

The Civil Aviation Administration of China will waive several fees and taxes, worth a total of 4 billion yuan, that airlines would have had to pay.

The CAAC has urged carriers to cancel or postpone plane deliveries due next year as the cooling economy dampens travel demand. Airlines have also been asked to park unnecessary planes, retire old ones and return aircraft leased overseas.

China is expected to take delivery of 241 aircraft this year, including 16 delayed orders from last year, according to the CAAC. Leases on 43 planes are expected to expire this year, but the newly delivered aircraft would increase available passenger seats by 16 percent this year, the CAAC said.

The number of aircraft in Chinese carriers increased from 751 in 2005 to 1,254 at the end of last year. Domestic carriers delivered 192 million passengers. In the first 11 months of last year, the aviation industry lost 3.95 billion yuan and carriers lost 7 billion yuan, said Yang Guoqing, CAAC vice director.

(Shanghai Daily January 8, 2009)