China should hold controlling stake in foreign-invested public aviation transportation enterprise: CAAC

The CAAC has released the new Regulation on the permission of public aviation transportation enterprise on Jan 13. The spokesman of CAAC says the Chinese side should hold the controlling stake in a foreign-invested public airline transportation enterprise. The stake a foreign company (including its affiliates) holds shall not exceed 25 percent.

The eighth clause of the Foreign Investment Regulation on China Civil Aviation clearly stipulates, " Foreign companies that invest in the public aviation transportation enterprises shall observe the investment ratio stipulated in the civil airlines."

The investor in public aviation transportation enterprise is required to apply for license for running the enterprise. As per the regulation, applicant should provide the following documents in duplicates: the application report, investor's proof of credit, investment agreements signed by all investors, copy of license for an enterprise as a legal person/copy of a certificate for a natural person's identity, letter of appointment for the person who is responsible for the preparatory work for establishment of enterprise, resume of the person who is responsible for construction.

For establishment of a sino-foreign JV, a project report and approval by regional civil aviation administration are also needed. The application should be reviewed by the local civil aviation administration first and later submitted to the CAAC for final decision.

After getting approval from the CAAC, a public aviation transportation enterprise shall complete the preparatory work for establishment and obtain licensee within two years. For the enterprises that fail to finalize the preparatory within two years, the CAAC can give them one more year provided the enterprises have sufficient reasons. Should the enterprise fail to complete preparation for establishment in the prolonged period, it will be disqualified to prepare for establishment, and the CAAC will not accept its application for establishment within two years.

The applicant is required to pass preliminary appraisal by the regional civil aviation administration upon completion of the preparation, and then apply for a license with the CAAC.

Once receiving license, the applicant shall apply for license for an enterprise as a legal person at the Administration for Industry and Commerce. In the meantime, the applicant should get certificate for carrier of public aviation transportation and operation criterion from the CAAC before its operation starts.

By People's Daily Online