According to Haikou Customs, in the first quarter of 2024, the Hainan Free Trade Port (FTP) imported 250 million yuan (approx. $34.6 million) of raw and auxiliary aviation materials under the ‘zero tariff’ policy, resulting in tax savings of 35.864 million yuan (approx. $5 million).

The imported materials were mainly components of high-value aircraft such as Boeing 737 aircraft engines, landing gear controls, flight management guidance equipment, and flight computers.

The One-stop Aircraft Maintenance Base at Haikou Meilan International Airport. (Photo: Li Hao / New Hainan App)

According to a representative of Hainan Airlines Holding Co. Ltd., the company saw that 2023 passenger numbers surged by 182.3% year-on-year, and the demand for imported aviation materials also rose sharply. The tax reductions and exemptions granted by the Hainan FTP’s ‘zero tariff’ policy have considerably reduced operating costs and provided guarantees for meeting operational and maintenance needs.

The Hainan FTP ‘zero tariff’ policy states that before the independent customs closure of the island province, companies registered in the Hainan FPT importing raw and auxiliary materials for production and internal use for products sold overseas or consumed in international service trade are exempt from import duties, import VAT, and consumption tax. Companies are not required to submit guarantees. When doing business on the domestic market, only import tariffs, import VAT, and consumption tax on the corresponding raw materials should be paid. These policies meet business needs and alleviate financial pressure for companies in the Hainan FTP.

As the Hainan FTP policy continues to benefit more companies, the Hainan One-stop Aircraft Maintenance Base located in the Haikou Airport Comprehensive Bonded Zone is also growing and developing. The aircraft maintenance industry chain continues to expand and grow stronger, making Hainan into a global aviation maintenance hub.

The Base makes full use of policy benefits such as tax exemption for aircraft maintenance materials, exemption from maintenance deposits, and rapid customs clearance. In 2023, the base landed a number of new clients including Royal Air Philippines, Cambodia Airways, and Qatar Airways.