Airlines allegedly offering kickbacks, exploiting loopholes to get sought-after allocations
Charlotte So 04 February 2010
Top aviation officials on the mainland have been accused of illegally selling sought-after landing slots to the country’s major carriers.
Winning landing slots at busy airports - including Beijing, Shanghai, Guangzhou and Shenzhen - is a necessity to compete in the increasingly cut-throat airline industry.
However, in order to get those precious time slots, carriers do whatever it takes to persuade regulators - including reportedly offering them kickbacks.
“It is known that Air China and Tianjin Airlines, a HNA subsidiary, have not abided by regulations when they operate some time slots at mainland airports,” the Civil Aviation Administration of China (CAAC) said on its website on Monday.
The regulator did not specify the offence by the two airlines but it is suspected to relate to the illegal sale of landing slots. Air China declined to comment on the issue.
The current allocation system, under which the CAAC applies for summer and winter landing slots, is under attack for attracting cronyism.
“It is a long-established practice and it is applicable to all the carriers which operate on the mainland,” said one airline official.
“It is interesting that only two airlines are singled out this time.”
Zhang Baojian, the North Asia vice-president of the International Air Transport Association, a trade body representing more than 230 member airlines worldwide, said: “Slot co-ordination is neither transparent or fair at present ... The absolute power of the regulator gives rise to many problems.”
The international practice is for time slots to be allocated by a committee formed by all the airlines operating in the country or region.
The CAAC moved to reform the system after the sacking of Huang Dengke, the former head of the CAAC’s northern bureau, in November last year. The bureau is in charge of air traffic control and time slot allocation in Beijing, Tianjin, Inner Mongolia and Hebei province.
Under changes spearheaded by the newly appointed head of the northern bureau, Liu Xuesong, slot allocation will be decentralised to regional offices, except for Beijing, Shanghai and Guangzhou.
Liu promised to disclose on a quarterly basis time slots newly added by airlines at the Beijing Capital International Airport.
Under the new system, applications for time slots by charter flight operators will have to be renewed on a monthly basis.
Charter flights are believed to provide a loophole that can be exploited by corrupt practices.
Charter flight agencies, which obtain landing slots through their connections with officials, reportedly then sell the time slots to airlines through profit-sharing arrangements with the airlines operating the charter services.
The ultimate solution, however, is to let airlines decide time slot allocation by vote, Zhang said.
“The [Air Traffic Management Bureau] will regret that the absolute power they are enjoying now might lead to the imprisonment of some people in the near future,” Zhang said.
Zhang added that he would not be surprised if some senior management of mainland carriers or officials fell from grace in the future because of malpractice in the allocation of time slots.
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Officials in illegal landing-slot sales
Airlines allegedly offering kickbacks, exploiting loopholes to get sought-after allocations
Charlotte So
04 February 2010
Top aviation officials on the mainland have been accused of illegally selling sought-after landing slots to the country’s major carriers.
Winning landing slots at busy airports - including Beijing, Shanghai, Guangzhou and Shenzhen - is a necessity to compete in the increasingly cut-throat airline industry.
However, in order to get those precious time slots, carriers do whatever it takes to persuade regulators - including reportedly offering them kickbacks.
“It is known that Air China and Tianjin Airlines, a HNA subsidiary, have not abided by regulations when they operate some time slots at mainland airports,” the Civil Aviation Administration of China (CAAC) said on its website on Monday.
The regulator did not specify the offence by the two airlines but it is suspected to relate to the illegal sale of landing slots. Air China declined to comment on the issue.
The current allocation system, under which the CAAC applies for summer and winter landing slots, is under attack for attracting cronyism.
“It is a long-established practice and it is applicable to all the carriers which operate on the mainland,” said one airline official.
“It is interesting that only two airlines are singled out this time.”
Zhang Baojian, the North Asia vice-president of the International Air Transport Association, a trade body representing more than 230 member airlines worldwide, said: “Slot co-ordination is neither transparent or fair at present ... The absolute power of the regulator gives rise to many problems.”
The international practice is for time slots to be allocated by a committee formed by all the airlines operating in the country or region.
The CAAC moved to reform the system after the sacking of Huang Dengke, the former head of the CAAC’s northern bureau, in November last year. The bureau is in charge of air traffic control and time slot allocation in Beijing, Tianjin, Inner Mongolia and Hebei province.
Under changes spearheaded by the newly appointed head of the northern bureau, Liu Xuesong, slot allocation will be decentralised to regional offices, except for Beijing, Shanghai and Guangzhou.
Liu promised to disclose on a quarterly basis time slots newly added by airlines at the Beijing Capital International Airport.
Under the new system, applications for time slots by charter flight operators will have to be renewed on a monthly basis.
Charter flights are believed to provide a loophole that can be exploited by corrupt practices.
Charter flight agencies, which obtain landing slots through their connections with officials, reportedly then sell the time slots to airlines through profit-sharing arrangements with the airlines operating the charter services.
The ultimate solution, however, is to let airlines decide time slot allocation by vote, Zhang said.
“The [Air Traffic Management Bureau] will regret that the absolute power they are enjoying now might lead to the imprisonment of some people in the near future,” Zhang said.
Zhang added that he would not be surprised if some senior management of mainland carriers or officials fell from grace in the future because of malpractice in the allocation of time slots.
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