Airport ground equipment is an important support for the aviation industry, mainly referring to IATA. The entry barriers are high and the core technology of high-end airport ground equipment was once mastered by companies in developed countries in Europe and the United States. In the 1990s, China's airport ground equipment manufacturing was in the stage of imitation design, with insufficient independent innovation capabilities, lack of test methods and facilities and equipment, and the advancement, stability, and reliability of domestic new products lagging behind international counterparts. Since entering the 21st century, China's civil aviation has always maintained a double-digit rapid development. China's air transport market has become one of the world's most promising markets, but it is affected by multiple factors such as airlines' savings in operating costs and global energy conservation and emission reduction requirements. The localization, electrification, and intelligence of high-end airport ground equipment are imperative.
National Economic Growth Stimulates the Development of General Aviation
General aviation demand will usher in an explosive period, and the industry has broad room for growth. In 2019, China's per capita GDP exceeded the 10,000 U.S. dollar mark, an increase of 6.1% compared to 2018's 9,608 U.S. dollar. The Civil Aviation Administration pointed out that when the per capita GDP of a country or region exceeds US$6,000, the demand for general aviation from the people begins to explode. However, China's general aviation industry still failed to usher in a blowout development in 2018, which does not match China's status as the world's second-largest economy and strong social demand. General aviation operation time and fleet size lag far behind the United States. Experience has shown that in a large country with a complete aviation industry chain, a reasonable general aviation scale accounts for about 10% to 15% of the overall aviation industry, and the total amount of general aviation flights accounts for more than 50% of the total civil aviation flights. The total number of Chinese general aviation flights continued to grow. Statistics show that in 2019, China's total aviation flight totaled 1.065 million hours, accounting for less than 9% of the total transportation flight, and there is ample room for growth.
Data shows that in 2018, the number of general-purpose airports issued with certificates in the industry reached 202, and the number of general-purpose airports without certificates reached 197, a total of 399. In 2019, the number of domestic certified airports was 239, exceeding the number of certified transportation airports for the first time. The government plan pointed out that by 2020, China plans to build 500 general airports. According to the public data limit, by 2030, the national general airport is expected to be 2058.
General Aviation Promotes the Expansion of Airport Equipment
The acceleration of general aviation airport construction has further expanded the airport equipment market. According to calculations, the value of airport ground equipment accounts for about 7.5% of the cost of a general aviation airport. The cost of a general aviation airport is 50 to 200 million yuan, assuming an average cost of 125 million yuan. It is also assumed that the average time for the replacement of airport equipment is about 10 years. From this, it can be calculated that the demand for general airport ground equipment between 2020 and 2021 will be 722 million yuan, 1.097 billion yuan, and an annual average of 819 million yuan, totaling 2.456 billion yuan.
High Barriers to Entry and Lack of Large-Scale Comprehensive Enterprises
The current pattern of the airport equipment industry shows that it is difficult for small enterprises to enter and it is difficult for large-scale comprehensive enterprises to emerge. First, high compliance barriers make it difficult for small businesses to enter. Before 2016, the airport ground equipment manufacturing implemented a production license system. In order to obtain a production license, companies need to trial run the airport ground equipment at the airport for half a year and submit user usage reports. Due to the long period of obtaining permits and the large initial investment, it has built a high compliance barrier for the airport ground equipment industry. In 2016, the Civil Aviation Administration of China issued a new version of the regulations to abolish production licenses and establish a conformity inspection system. Airport equipment can be used in civil airports only after passing the inspection by an agency recognized by the Civil Aviation Administration. It can be seen that the industry has a high barrier to entry.
Another characteristic of the industry is that it is difficult to achieve scale effects, making it difficult for the industry to emerge as a comprehensive large enterprise. Airport ground equipment has many categories and strong specificity, but many non-standard products. On August 5, 2015, the inspection specifications for airport passenger shuttles and registered vehicles for passengers with reduced mobility were promulgated; in April , 2016, the inspection specification for aircraft water trucks was promulgated; in August 2018, inspection specifications for aircraft ground power supply units, aircraft ground static variable power supply units, aircraft ground air conditioning units, and aircraft oxygenation equipment were issued. However, the types of products that have been issued testing specifications are still less than those that have not been issued, making it difficult for companies to manufacture products in accordance with unified standards and specifications. If an enterprise chooses to produce a variety of products, raw material procurement and production will show the characteristics of multiple specifications and small batches, making it difficult to form a scale effect. Therefore, it is difficult for comprehensive large-scale enterprises with many product categories to appear in the industry.
In order to lead the development of the airport ground equipment industry, improve the level of independent innovation, build a world-class airport ground equipment research and development platform, and enhance the international competitiveness of airport ground equipment products, in November 2009, five government departments including the Ministry of Science and Technology joined forces with Weihai Guangtai Preparing to build the National Airport Ground Equipment Engineering Technology Research Centre. After four years of continuous investment and construction, it was officially put into operation and management in 2013. Over the years, it has been committed to breaking foreign technology monopolies and blockades and has made important contributions to the building of a civil aviation power. Weihai Guangtai is the leader in domestic airport equipment, and its product types rank among the top of its counterparts in the world. It is the only domestic company that can provide one-stop packaging services for new airports.
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