Fujian-based airline, airport bolster national reform and opening-up

By Zhang Hongpei in Xiamen Source:Global Times Published: 2018/6/28 19:28:40



 

The world's first "United Dream" aircraft coated with the UN's SDGs logo joins Xiamen Airlines and arrives at Fuzhou Changle International Airport, East China's Fujian Province, on March 18. Photo: Courtesy of Xiamen Airlines





Thanks to China's economic reform and opening-up over the last four decades, more and more people are now able to afford to travel by airplane, especially as travel demand increased and as routes became more internationalized. Global Times reporter Zhang Hongpei recently paid a visit to Xiamen Airlines and Xiamen Gaoqi International Airport, both of which were considered reform pioneers in the 1980s, not only in the Xiamen Special Economic Zone, but also in China's aviation industry at large. This is the last part of a five-part story.



After welcoming its first Boeing 737 MAX as its 200th member of its ever-growing fleet and successfully completing the aircraft's maiden flight in May, Xiamen Airlines is stepping up efforts to launch more flights to countries and regions along the routes of the China-proposed Belt and Road (B&R) initiative.

Founded in 1984 in the Xiamen Special Economic Zone (SEZ), East China's Fujian Province, Xiamen Airlines has grown rapidly with the city while riding the boom of China's reform and opening-up policy, greatly driving the country's economic development and enhancing people's living standards.

"In the mid-1990s, China's aviation industry entered an ever-evolving growth period that saw more Chinese-owned aircraft, while the supply and demand relationship gradually changed," said Che Shanglun, chairman of Xiamen Airlines.

During the first decade after Xiamen Airlines was founded, there was only one ticket office and flight tickets back then were mainly for business officials, with only a tiny portion issued to members of the general public, Che told the Global Times.

"Now, civil aircraft have become very popular and convenient transport vehicles. The previous passenger profile was predominantly middle-aged men. But that has changed to all ages and genders now, with passengers traveling for purposes as diverse as business trips, leisure and family visits. Plus, tickets can now be bought on online platforms instead of at physical ticket windows," Che noted.

During the past five years, the annual growth rate of Xiamen Airlines' passenger capacity hit 15 percent. By contrast, the figure stood at 4 percent for US civil aviation, 6 percent for Europe and 10 percent for the rest of China, according to a report released by industry website carnoc.com in May.

In 1987, Xiamen Airlines made profits for the first time with a total passenger traffic volume of 320,000. Thirty years later in 2017, the figure surged to 32 million.

"The civil aviation industry can largely boost the local economy and drive economic transformation. Meanwhile, it can benefit a lot from growing trends," Che noted.

In 2017, Xiamen Airlines was profitable for the 31st straight year, becoming the only Chinese airline to keep such a consecutive record, according to a document the company sent to the Global Times.

Innovator

Xiamen Airlines was the first airline in China to operate under the modern enterprise system, embarking on a journey in the country's new market-driven aviation industry.

"Xiamen Airlines, which then was owned by both the Fujian provincial government and the Civil Aviation Administration of China, was the first to propose a joint equity enterprise model, ushering in the new reform era, although the initial period did witness many difficulties due to a lack of experience and funds," Che explained.

At present, the airline is jointly owned by China Southern Airlines with a 55 percent stake, Xiamen Construction and Development Group with 34 percent, and Fujian Investment and Development Group with 11 percent.

When the company first started, there were only seven employees. And when the company opened its first domestic air route from Xiamen to Guangzhou, capital of South China's Guangdong Province, in 1985, there were only five flights per week, according to Che.

"I still remember the boarding cards at the time were handwritten and the facilities onboard were also poor, as there was no oven or dining cart. Only cold food was provided on a plate," Che recalled.

The airline currently operates over 600 domestic and international flights per day. Its current amount of international routes stands at 72 and it also operates a strong network of flights departing from China to Southeast Asia, Northeast Asia, Europe, North America and Australia.

Also, as of May, the airline had transported a total of one million passengers via its intercontinental routes, data from Xiamen Airlines showed.

"We're planning to launch more flights to act as an air bridge to countries and regions along the B&R routes, strengthening trade and personnel exchanges," Che stressed.

A helping hand

In addition to air transport services, the construction standards of airports also play a significant role in bolstering China's economic development.

Liang Zhigang, chief financial officer of Xiamen Iport Group, the owner and operator of Xiamen Gaoqi International Airport, told the Global Times in a recent interview that the airport's initial construction in 1982 was met with many difficulties, mainly in relation to tightened finances at that time.

"Fujian's transport was quite inconvenient at the start of the 1980s. Motivated by the reform and opening-up policy, the province needed an airport in the Xiamen SEZ to improve its infrastructure and attract passenger flow. The first problem was money," Liang recalled.

At that time, the provincial government's financial revenue could not cover all the airport's initial investment worth about 96 million yuan ($14.55 million), Liang noted.

As such, the Xiamen government tried its best and finally succeeded in borrowing from the Kuwait Fund for Arab Economic Development, Kuwait's agency for the provision of financial and technical assistance to developing countries.

At the time, Kuwait was also seeking to invest in developing countries, thus making Xiamen airport the first airport in China to be built with the help of foreign loans.

"Then, the Kuwait fund, worth nearly half of the total investment, helped us solve the pressing capital problem," Liang noted.

The construction of Xiamen airport took only 22 months, the speed of which was the epitome of "Xiamen speed" at the time, he said proudly.

"In addition to the first batch of loans, the Kuwait fund then lent us more capital for the airport's second-phase expansion from 1992 to 1996, when the Xiamen government decided not to provide funds but rather push the project toward a market-oriented path," he said.

In order to find the necessary funds, the airport adopted various methods including commercial bank loans, corporate bonds as well as other financing sources.

Amid a trend in 1996 whereby State-owned enterprises were encouraged to get listed, Xiamen Iport Group issued its stock on the Shanghai Stock Exchange with the code "Xiamen Airport," becoming the first stock in Chinese civil aviation history. This also created another source of capital at the time, according to Liang.

At the moment, Xiamen Iport Group is rolling out plans to build a new airport in Xiamen's Xiang'an district by 2022, since Gaoqi airport has reached the point of saturation, Liang said, adding its throughput hit 24.48 million in 2017.

"For the Xiamen SEZ, airports play the role of an engine and can greatly drive local revenue and employment via its throughput," he explained.


Newspaper headline: Xiamen’s soaring wings


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