Recently, CAAC officially issued the newly revised Administrative Measures on International Traffic Rights Resource Allocation and Use (hereinafter referred to the Measures). The Measures focus on establishing a sound, open, fair and just management system for international traffic rights resource allocation and use, implementing classified allocation and management of international traffic rights resource, gradually breaking the rule of “one carrier on one long-haul international route”, and setting up principles and quantitative index system for traffic rights resource allocation, so as to standardize the use and management of traffic rights. According to the Measures, CAAC also formulated the Policy on International Traffic Rights Allocation for Dual-Airport Operation in Beijing (hereinafter referred to as the Policy) so as to better advance the building of two large international aviation hubs, namely Beijing Capital International Airport and Beijing New Airport. The Measures and the Policy shall both enter into force on October 1, 2018.

The current Interim Measures for International Traffic Rights Allocation and Use was formulated in 2009. In recent years, international air transport in China has entered into a new development stage and become more open. Airlines have shown greater interests in opening new international routes. International aviation hubs in China have begun to take shape. In such new circumstances, the revised Measures clarify that the allocation of international traffic right resources shall follow the principles of maximizing public interests, promoting hub building, encouraging orderly competition, making best use of resources, and improving the general competitiveness, and promote high-quality development of international air transport.

The Measures consist of six chapters, 55 articles in total. It states that international air routes are divided into two classes. Class 1 international air routes are the agreed open routes from China to countries with open traffic rights or partly open traffic rights. Class 2 international air routes are international routes of markets with limited traffic rights that are excluded from Class 1 routes, and they are divided into long-haul Class 2 international air routes and non-long-haul Class 2 international air routes. Class 2 international routes from domestic way points to points in America, Europe (excluding Russia), Oceania and Africa are long-haul Class 2 international routes, while the others are non-long-haul Class 2 international routes. The Measures encourage airlines to launch new international routes based on civil air transport agreements and relevant agreements. As for hub airport development and air route network expansion which serve the national strategy and industry development strategy, CAAC will provide policy support by means of adjusting the index system of international traffic rights resource allocation.

The Measures adopt differentiated management for different air routes. For Class 1 international routes, the number of designated carriers, flight schedules, frequency, and transport capacity are not restricted. For long-haul Class 2 passenger transport international routes, a competition mechanism will be gradually introduced. For long-haul Class 2 passenger transport international routes which already have operating airlines, a new carrier can be added if it meets the entry standards specified in the Measures, so as to gradually break the rule that only one carrier for one long-haul international route and encourage airlines to participate in global competition.

The Measures also impose requirements on the newly added carriers of long-haul Class 2 international passenger transport routes, specifying that for new carriers that conform to traffic right provisions and have two or more competitors competing for the same traffic right (including current operating airlines applying for additional flights), the decision will be made comprehensively based on the four indexes of customer benefits, hub development, resource use efficiency and corporate operation quality. And the Measures have provided for the grading criterion and calculation methods for these indexes. Meanwhile, long-haul and non-long-haul Class 2 cargo transport international routes, in accordance with traffic right allocation, are not subject to limit on the number of carriers.

The Measures stipulate that airlines shall strictly follow the approved routes, schedules, aircraft types, operation dates and must not make any change or cancellation without permission. Airlines with a license for international routes operation shall make full use of their acquired traffic rights, or else CAAC will cancel them according to relevant laws, or take back underutilized traffic rights for reallocation. CAAC will standardize the use and management of traffic rights by means of establishing and improving the operation monitoring system for international routes and flights and the information analysis and reporting system.

Beijing New Airport will be put into operation in 2019. The allocation of its international traffic rights has attracted much attention. The Policy clarifies that the major base airlines at Beijing New Airport are China Eastern Airlines and China Southern Airlines; as for airlines which will operate at Beijing New Airport, their international flights at Beijing Capital Airport will be all transferred to the new airport within four years after it starts operation, and will continue to hold their approved international traffic rights; the two airports in Beijing shall conform to the principle of the same market for international traffic right resource allocation and shall be considered as one single way point. Routes from either of the two airports to the same overseas way point shall be considered as one and the same route. The Policy also provides for rules concerning use and management of international traffic rights for Beijing New Airport so as to comprehensively advance the building of the two large international aviation hubs.