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, it 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 definition is very high:
This means the civil aviation industry may be on the verge of a new round of major restructuring. In the view of industry insider Q, this is a guiding document for governance across the entire industry lifecycle.
"The core signal here is a shift from prioritizing market access while neglecting exits, to placing equal emphasis on access, supervision, and exit. The goal is to move away from simply expanding scale, and instead focus on controlling the number of market participants, 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.
What are the exit and entry procedures?
First, 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 among themselves, 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 clear out according to law and regulations.
Third, in terms of access, the regulation strictly implements 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 conducting a penetrating examination of the controlling shareholders and strictly controlling the ratio of aircraft and aviation personnel configuration.
Upon closer examination, it becomes apparent that the content of the "Opinion" clearly places more 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 any means.
It's interesting that there's a long-held view in the industry that "the aviation industry must have 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, with outside speculation being mixed.
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-ever bankruptcy restructuring in 2021, but all its aircraft and routes remained in the industry, with no change in the competitive landscape. So, the real question is not "should airlines be allowed to go bankrupt," but rather, after restructuring or exiting, whether their capacity is being taken out or redeployed.
The "Opinion" provides a way out: enterprises that have their operating licenses revoked can transfer their personnel, routes, and assets to other airlines controlled by the same holding shareholder or actual controller, which essentially amounts to a redeployment of their operating 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 suggests that HNA may still be an expanding and potentially integrating party in this round of reforms.
The reasons are as follows:
HNA signed a new order for 40 Airbus A320NEO aircraft in 2026, valued at $5.36 billion, with deliveries scheduled in batches from 2028 to 2032. The carrier has also secured a 15.154 billion yuan syndicated loan, underscoring its clear expansion phase.
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, which was also profitable. However, the company's nine subsidiaries all reported net losses, and multiple subsidiaries had an asset-liability ratio exceeding 100%, requiring consolidation.
Similarly, in the first half of this year, the three major airlines not only reported a combined net loss of 8.161 billion yuan, but their respective subsidiaries also suffered significant losses, such as Shenzhen Airlines, a subsidiary of Air China, which incurred the largest loss of 1.049 billion yuan. These subsidiaries also need to be consolidated.
Therefore, we can infer that when the three major airlines are struggling to survive, they may not have much motivation to "acquire" others.
Yu Zhanchu's inference is more insightful, as he said that integration within the group will occur significantly earlier and more frequently than integration between groups. "This is also why the 'Opinions' define 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 schedule adjustments, and employee relocation and economic compensation. If this process is handled cleanly, subsequent administrative exits will have replicable feasibility.
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, offered remarks that got to the heart of the matter.
What would truly improve supply-demand dynamics through capacity clearance is whether aircraft are returned, sold, or parked, whether inefficient routes are adjusted, and whether slots and traffic rights are reconfigured. Unfortunately, aircraft as core airline assets are subject to restrictions in China—including ownership and finance lease arrangements, maintenance record completeness, deregistration procedures, export airworthiness certification, and importing countries' age and model entry requirements—that make cross-border sales or lease returns far less flexible than 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 way, quantity can be controlled to achieve increased efficiency.
The Opinions only call for guiding local governments to standardize their fiscal subsidy practices, without any binding provisions—and the shareholders of most small and mid-sized carriers happen to be local state capital. Moreover, price pressure won't disappear just because the number of corporate entities gets frozen.
In any case, the release of this document is 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 on optimizing route and flight review measures was also released, outlining plans such as: suspending new additions on conventional routes where four or more carriers are already operating; and allowing airlines to swap out highly competitive routes in exchange for two to four low-competition routes.
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 aircraft far exceeds the losses from flying at a deficit.