It was thought to be just an ordinary document, but after discussing it with several seasoned professionals, its significance turned out to be extremely heavy. Because the document was not directly made public, but was jointly issued by the Civil Aviation Administration, the National Development and Reform Commission, the State-owned Assets Supervision and Administration Commission, and the State Administration for Market Regulation, and the opening statement was very high-level:
This means the civil aviation industry could be headed for a new round of major consolidation. In the view of industry insider Q, the document serves as a programmatic framework for whole-lifecycle governance of the sector.
Its core signal is shifting from strict entry and lenient exit to emphasizing entry, regulation, and exit, with a focus on transitioning from pursuing scale to controlling the number of market players, optimizing the supply structure, and improving the efficiency of resource allocation.
It supports mergers and acquisitions, dissolution and liquidation, and bankruptcy restructuring at the same time, with a focus on reducing inefficient entities and homogeneous competition through market-oriented and rule-of-law approaches.
How exactly do exit and entry work?
Firstly, market-oriented exit. Support airlines to voluntarily exit through mergers and reorganization, dissolution and liquidation, and bankruptcy restructuring; at the same time, encourage airlines to carry out mergers and reorganization, and airline groups can deepen internal resource integration, gradually reducing the number of enterprises within the group.
Second is administrative mandatory exit. The focus is on airlines with prominent safety hazards, low operating efficiency, and high financial risks, and a disposal process of "early warning interviews - ordered rectification - business suspension - limited business scope - revocation of licenses" is established, and resolutely clearing out according to law and regulations.
Third, in terms of access, the regulation strictly enforces the paid-in registered capital, requiring passenger airlines to have no less than 600 million yuan and cargo airlines to have no less than 400 million yuan, while also implementing a penetrating examination of controlling shareholders and strictly controlling the ratio of aircraft and aviation personnel configuration.
Upon closer examination, it is clear that the content of the "Opinion" places a greater emphasis on exit mechanisms, meaning that without a change in the current number of airlines, the establishment of new airlines must be accompanied by the exit of old ones, or alternatively, if no new airlines are established, old airlines can exit through various means.
It's interesting that there's a long-held view in the industry that "the civil aviation industry must see an airline go bankrupt in order to be reborn," which is seen as a sign of the industry's maturation.
So, who will be the first airline to fall, and will the big three carriers initiate a new round of mergers and acquisitions - opinions on this vary.
However, Q believes that this document will increase the likelihood of mergers and acquisitions, but it does not mean that a wave of acquisitions led by the three major airlines will emerge immediately.
Zhongda Consulting Group Vice President and head of the transportation, logistics and tourism sector, Yu Zhanfu, told the reporter that bankruptcy is a legal procedure, while capacity clearance is an economic outcome, and the two should not be confused.
For example, Hainan Airlines completed the largest-scale bankruptcy restructuring in history in 2021, but all aircraft and routes were retained within the industry, and the competitive landscape did not change. So, the real question is not "should airlines go bankrupt or not," but rather, after restructuring or exiting, whether the capacity is being taken away or redeployed.
The "Opinion" provides a way out: enterprises that have their operating permits revoked can transfer their personnel, routes, and assets to other airlines controlled by the same holding shareholder or actual controller, which essentially means redeploying their operational capacity.
It's worth noting that many netizens believe the release of "Opinions" is targeted at HNA Group, or else why the quiet release. However, Yu Zhanfu does not agree that the document is specifically aimed at any particular airline, and instead, HNA may still be the expanding and potentially integrating party in this round of reforms.
The reasons are as follows:
Hainan Airlines has newly signed an order for 40 A320NEO aircraft, valued at $5.36 billion, with deliveries scheduled from 2028 to 2032, and has also secured a syndicated loan of 15.154 billion yuan, clearly indicating a period of expansion.
The recently released semi-annual report shows that Hainan Airlines' net profit attributable to the parent company was 270 million yuan. After deducting non-recurring gains and losses, the net profit attributable to the parent company was 29.207 million yuan, still profitable. However, all nine of its subsidiaries reported net losses, and multiple companies had an asset-liability ratio exceeding 100%, requiring consolidation.
Similarly, in the first half of this year, the three major airlines posted a combined net loss attributable to parent shareholders of 8.161 billion yuan, and many of their respective subsidiaries also recorded losses, with amounts far from negligible. For instance, Shenzhen Airlines, a subsidiary of Air China, posted the largest loss at 1.049 billion yuan. These subsidiaries likewise require consolidation.
Therefore, we can infer that when the three major airlines are struggling to survive, they may not have much motivation to "acquire" others.
Yu Zhanfu's inference is more insightful, as he says that integration within the group will occur significantly earlier and more frequently than integration across groups. "This is also why the 'Opinions' define the applicable circumstances of administrative exit without listing losses as a condition, otherwise, the first to be triggered would be the state-owned backbone enterprises, which is clearly not the policy intention."
Looking again at Lucky Air, publicly available information shows that in April 2025, Lucky Air suspended operations, and a year later entered bankruptcy restructuring proceedings, with current liabilities exceeding 5 billion yuan, and also having unpaid employee salaries and social insurance contributions, undoubtedly the closest example at present.
However, to identify it, it has existing stock and is not a product of the "Opinions". Its true significance lies in that it will test for the first time whether the full-process control designed in Article 6 of the "Opinions" can be implemented.
This includes stopping passenger and cargo sales in advance, arranging for passenger relocation and ticket refunds, handling flight slots, and arranging for employee relocation and economic compensation. If this process is handled cleanly, subsequent administrative exits will be replicable.
Furthermore, if other small airlines encounter problems and do not voluntarily exit the market, and the three major airlines are unable to acquire them, then they can be forced to exit the market through administrative procedures, just like Happiness Airlines.
What to do then?
Another industry insider, Mr. K, revealed the truth with his words.
A genuine improvement in supply and demand through the clearance of transport capacity will depend on whether aircraft are returned, sold, or grounded, and whether inefficient routes are adjusted, as well as whether time slots and air traffic rights are reconfigured. Unfortunately, as the core assets of airlines, aircraft in China are subject to restrictions such as ownership and financial leasing arrangements, the completeness of maintenance records, deregistration, export airworthiness, and the age and model of aircraft allowed to be imported by the destination country, and thus cannot be sold or returned across borders as flexibly as in the United States.
In addition, airlines are also involved in safety continuity, passenger accommodation, employee employment, creditor interests, airport and route public services, as well as scarce resources such as air traffic rights and time slots, which also results in high exit costs and coordination costs.
A more effective approach would be to link fleet expansion with safety capabilities, financial condition, and market demand; strictly limit route subsidies to public service objectives; and dynamically eliminate inefficient capacity and idle resources. It's also necessary to improve protection for passengers, employees, and creditors in the event of bankruptcy, strengthen competition reviews, and establish mechanisms for cross-border aircraft disposal. This is the only way to translate quantity into efficiency.
The "Opinion" only mentions guiding local governments to standardize fiscal subsidy behavior, without any binding clauses, and most small and medium-sized airlines' shareholders are precisely local state-owned assets; moreover, price pressure will not disappear just because the number of legal entities is frozen.
In any case, the release of this document is already a crucial step forward. In fact, the Civil Aviation Administration has been working hard over the past year to address the issue of internal chaos.
In June 2026, a draft proposal for optimizing route and flight review measures was released, which included plans to suspend new additions on conventional segments once four or more carriers are operating, and to allow airlines to swap highly competitive routes for two to four less competitive ones.
My analysis and judgment are: by 2030, the number of domestic public air transport enterprises will likely decrease from 65 to between 55 and 60, mainly due to mergers and acquisitions within groups, supplemented by individual administrative exits triggered by safety or financial risks, with large-scale cross-group mergers and acquisitions being a low-probability event.
However, it must be emphasized that what truly determines ticket prices and profit levels is not the disappearance of these 10 or so companies, but whether the "Opinions" can suppress the growth rate of flight schedules and fleets below the demand growth rate. If it can, the industry will see a systemic correction in profit levels in 2027-2028; if not, a reduction in the number of companies will only lead to more concentrated and harder-to-break homogeneous competition, Yu Zhanfu said frankly.
Previously, routes with highly concentrated transport capacity could only continue to roll over prices, while those that were already losing money could only continue to operate.
After all, when oil prices rise, the sunk cost of grounding flights is far less than the losses incurred by flying.