The Ministry of Transport ("MOT") has recently issued the Provisions on Domestic Investment in Civil Aviation Industry (the "Provisions"), effective from January 19, 2018.
Major amendments introduced in the Provisions are made in the following respects. The first is relaxing requirements on the state ownership or controlling of three major airlines (Air China, China Eastern Airlines and China Southern Airlines) and allowing for the relative state controlling. The second is easing limits on the ratio of state-owned shares in major airports. The third is further lifting restrictions on investment made by civil aviation market players into each other. The Provisions also remove all limitations to the mutual investment by general-purpose airports and other market players in the civil aviation industry, increasing the proportion of investment made by transportation airports and enterprises providing guarantee services in the enterprises specialized in public aviation transportation to up to five percent. In addition, controls over investment of transportation airports and enterprises providing guarantee services in airlines engaging in the sole freight business are relaxed, with the rules on the non-relative controlling remaining there but the 25% maximum proportion of invested shares removed. Furthermore, the Provisions specify that industries, other than those given in the negative list which covers the public air transportation, civil transportation airports, air traffic control systems, and the sales, storage, transportation and refueling of aircraft oil, are not subject to any investment entry restrictions.