A number of firms in China have set up a CNY20bn ($3.25bn) investment fund to boost its fast-growing civil aviation industry.

The Beijing International Airport-led civil aviation investment fund has been designed to help create new airports, aviation economic zones, budget carriers, cargo and additional general aviation-related projects.

Beijing is witnessing a steep rise in demand for air travel, leading to heavy investments in the aviation industry. According to official data, a total of 754 million people travelled by air last year, which is an 86% increase when compared with 2008.

"Ongoing construction at a new facility in the south of Beijing will reportedly cost the country close to $14bn."

Ongoing construction at a new facility in the south of Beijing will reportedly cost the country close to $14bn.

A total of 62 cities in China has established aviation economic zones, which help to bring in plane manufacturers, such as Airbus Group NV and Embraer, to set up shop alongside parts suppliers and logistics companies.

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The report further stated that about 20% of the funds are controlled by Capital Airports Holding Co. HNA Group, parent of Hainan Airlines Co Ltd, with the remaining held by other fund management firms.

Additionally, two new budget carriers, including a subsidiary of China Eastern Airlines, have also started operations this year with more than 100 newly founded general aviation companies currently in line for registration.