China’s Plan to Build 45 Airports in Next 5 Years Causing Concern

According to The Financial Times, China is planning on ramping up airport construction at a feverish pace with plans to open 45 new airports within the next five years.

China’s rapid economic growth has led to a tremendous increase in air demand but concerns over the the enormity of the planned construction efforts have caused some analysts to question whether the country is building at an unsustainable pace.

Although demand for air travel has grown rapidly in recent years as the purchasing power of Chinese consumers has risen, the expansion in airport infrastructure, which accelerated during the stimulus programme over the past two years, has become one of a number of potential sources of over-investment across the economy.

There is also growing concern over the fact that very few of China’s nearly 175 airports make money with 130 of those airports operating at a loss according to Reuters. Adding to the concern is China’s plan to build a high-speed rail network across the country, potentially lessening the demand for air travel.

Passenger totals are expected to increase 15% this year and China’s commercial aircraft fleet is predicted to nearly double in the next five years leading China to believe that growth will continue to push air capacity levels, requiring the country to continue building new airports nationwide as it attempts to blanket the country with a widespread air network.

Today’s news comes on the heels of a recently-announced plan to build a second airport in Beijing to relieve congestion at the world’s second busiest airport, Beijing Capital International Airport. That airport will be complete by 2015 with an expected opening-day capacity of 40 million passengers.

 

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