China will need 1,070 regional jets with 70 to 130 seats over the next 20 years, making it the third-largest regional aviation market after the United States and Europe, according to the latest report released on Tuesday by Brazil-based aircraft manufacturer Embraer SA.
From 2017 to 2036, demand for regional jets in China will account for 17 percent of the total. Last year, there were 137 such aircraft in operation in China, said Embraer SA, the third-largest aircraft manufacturer after Boeing Co and Airbus Group SE.
Currently, Embraer accounts for 61 percent of global deliveries in the 70 to 130 seats jet segment, followed by Bombardier Inc of Canada and Russia's Sukhoi, respectively taking 31 percent and 4 percent of the market.
"In the next decade, the number of middle-class families in China is expected to grow to 300 million from 100 million, and most of them will come from second- and third-tier cities. The urbanization in smaller Chinese cities is expected to drive their demand for aviation transportation," said Arjan Meijer, chief commercial officer of Embraer.
Meanwhile, Meijer added that high-speed trains will connect about 80 percent of the provincial capital cities in China, and regional flights are expected to help to cover those areas that high-speed trains cannot.
For the regional aviation market in China, China Southern Airlines, Tianjin Airlines, Hebei Airlines, GX Airlines and Colorful Guizhou Airlines now take the leading positions in their operations.
For China Southern Airlines, regional routes account for 9 percent of its total domestic routes. Last year, the carrier transported 4.88 million people on its regional flights, up 3.9 percent year-on-year.
With Urumqi as one of its hubs, China Southern operated regional flights in 18 cities within the Xinjiang Uygur autonomous region. In 2016, it carried nearly 30,000 short-haul regional flights in the region.
Zhang Yubin, deputy manager of marketing at China Southern Airlines, said the operation of regional flights has been an indispensable part of the carrier.
"The regional aviation sector in China also faces some challenges, given its high operating costs, the low utilization ratio of regional aircraft and the impact of railways."
"Besides, major airports have tight flight schedule resources, which will have an impact on the integrated network construction of major and regional flights," Zhang said.
However, the government has issued favorable policies to boost the development of regional aviation. During the 13th Five-Year Plan (2016-20), China plans to build 43 new regional airports.
Last year, the Civil Aviation Administration of China provided 1.02 billion yuan (5 million) in subsidies to the regional aviation sector. CAAC said the establishment of new airlines should be strictly controlled, and it also said the government will support the establishment of new regional airlines.