ROUTES ASIA: Expanding Beyond China’s Borders

Chinese carriers are set to grow their international footprints in 2011 and ASM’s Ong KeeKeat highlights some of the most significant recent network developments in China.

China’s airlines have shown clear indications that they will continue to expand their international networks. IATA has stated that an estimated one billion people in the Asia-Pacific region will travel by air by 2014. China, Japan and Hong Kong will be the biggest international passenger markets in the Asia-Pacific, with China contributing the most to new travellers.

The Chinese carriers have been expanding exponentially and have been especially aggressive with their international network expansion in recent years. Two major Chinese carriers are listed among the five largest airlines in the world by market capitalisation – Air China at $20 billion and China Southern Airlines at $11 billion. The strong economic growth in China, complemented by the strong financial fundamentals of its major carriers, augurs well for further development of China’s aviation market.

Domestically, the market in China has grown from 2.1 million weekly seats in Northern Winter (NW) 2000/01 season to 7.2 million weekly seats in NW2010/11 season. The strong growth on domestic sectors is expected to continue given the huge narrowbody aircraft orders that have been placed by the Chinese carriers. This is supported by reported plans to build an additional 97 new airports, bringing the total number of civil airports in China to 244 by 2020.

In comparison, China’s international passenger market is only a fraction of the domestic passenger market – translating to 8% of overall weekly frequency or 11% of weekly seats. This is set to change as the Chinese carriers build on the momentum of their international network expansion. Over 52 new destinations have been added to China’s international air passenger network over the past five years. However, this network expansion is due to a combination of Chinese carriers and foreign airlines operating to China adding new routes.

Beside the three biggest carriers in China, privately funded Chinese carriers, such as Hainan Airlines, have also managed to increase their presence in the international market. Hainan has boosted its international operations from Shanghai, Hangzhou and Shenzhen, as well as at its primary international hub in Beijing Capital International Airport. Other Chinese carriers are also starting to expand internationally, such as Sichuan Airline’s application to the Federal Aviation Administration to operate a service four times a week to Saipan in the Commonwealth of the Northern Mariana Islands (CNMI). This will operate twice a week from both Guangzhou and Chengdu via Shanghai. Meanwhile, low-cost carrier Spring Airlines will also start its first ‘international’ service between Shanghai and Hong Kong in March 2011.

* Read the full article in the latest edition of Routes News. A copy of the world air service development magazine is also in all delegate bags at Routes Asia and there are copies on the Routes News stand.