The Civil Aviation Administration of China (CAAC)is reported to have halted a new plan to subsidise airlines. The suspension came amid rising concerns that airlines might intentionally reduce services to collect the subsidies.
he CAAC announced the subsidies for pandemic-hit airlines starting from May 21, with airlines receiving compensation of as much as 24,000 yuan ($3,564) per flying hour in weeks when they lose money and their average passenger flights are less than 75% full.
The industrywide subsidy program was to be effective as long as the average daily number of domestic passenger flights didn’t exceed 4,500 in a week, and some other conditions were met.
Between May 18 and 20, the average daily number of domestic passenger flights in China reached 4,644, according to flight tracking site VariFlight. But after the subsidy policy took effect, the number dropped to between 4,126 and 4,551 from May 21 to 25.