(Yicai Global) May 26 -- China’s civil aviation authority has started to issue cash subsidies to domestic flight operators when the number of flights and passenger loads fall below a certain level to help offset cratering passenger numbers amid the recent Covid-19 outbreaks.

For two months starting May 21, carriers can apply for grants to cover loss-making flights, up to a maximum deficit of CNY24,000 (USD3,564) an hour, China’s Ministry of Finance and Civil Aviation Administration said today. The news confirms Yicai Global’s exclusive last week that aviation authorities will begin to offer rare cash support.

The subsidies also come into effect when the average passenger load of a flight over the course of a week falls below 75 percent, making the flight unprofitable, and when the average number of flights each day does not meet the minimum number of flights to maintain safe operations, CAAC said. Carriers can apply at the end of each week to the financial authorities in the departure cities of the flights concerned.

Airlines that have more domestic flights than others and those with a high aircraft utilization rate would benefit the most if the aid is given based on flight hours, industry insiders said to Yicai Global earlier. Those companies would include Guangzhou-based China Southern Airlines and Shanghai-headquartered low-cost carrier Spring Airlines, they added.

Since 2020, CAAC has implemented several preferential policies targeting airports, traffic control and jet fuel. But still, the Covid-19 outbreaks this year have significantly slowed the sector’s recovery. Last month, the passenger load on the country’s three biggest airlines, namely Air China, China Eastern Airlines and China Southern Airlines, slumped almost 20 percent year on year to under 60 percent.

Editor: Kim Taylor