China airlines, airports square off over fees-CCTV
By Lucy Hornby
BEIJING, Nov 23 (Reuters) - Chinese airports are squaring off with airlines over 4 billion yuan ($585.6 million) in unpaid fees that are impacting operations, even as the airlines stagger under mounting losses, China Central Television said on Sunday.
Chinese carriers reported an aggregate loss of 4.3 billion yuan in the first 10 months of the year, as the impact of the global financial crisis reduced passenger numbers, CCTV said. Airports reported total profits of 170 million yuan in the same period.
The unusually long report by state television comes as Air China (601111.SS) (0753.HK), China Eastern Airlines (600115.SS) (0670.HK) and China Southern Airlines (600029.SS) (1055.HK) seek government aid to cope with hefty losses from high costs and weak demand.
"Quite a few airlines are in the red and they cannot afford the payments to airports, even if they signed contracts with the airports," Wang Jian, secretary general of the China civil airport association, told CCTV.
Much of the dispute stems from contracts between airlines and airports that were not renewed on March 1, CCTV said.
"We have submitted a report to the Civil Aviation Administration of China, demanding all airlines sign service contracts with airports before the end of this year. If no money is received from certain airlines, airports have the rights to refuse service," Wang said.
Chinese airports are classified according to their handling capacity, and benchmark charges for big airports are lower than for smaller ones.
"The government and companies in the aviation industry should protect airlines. Only by rescuing the airlines, can the whole aviation sector survive," Li Yi, an aviation expert, told CCTV.
About 70 percent of the income of Chinese airports comes from the fees paid by airlines, CCTV said, adding that experts suggest the government should inject money into the airports or lower the fees for airlines. (Editing by Kim Coghill) ($1=6.830 Yuan)
