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2010 could be a big year for Chinese airlines as traffic booms. Will they look to invest abroad?

27-Jan-2010

China’s economy is booming again and oil prices are around half their peak 2008 levels. For Chinese airlines, it’s a pretty simple equation, with pent-up demand expected to provide very strong traffic growth again in 2010 after surprisingly strong growth last year (particularly in the second half). As a result, airline industry profits should flow again in 2010 after a recovery in earnings in 2H2009. Chinese aviation is bullish again, growing capacity aggressively (taking delivery of almost one in two aircraft bound for Asia Pacific airlines in 2009 – a proportion it will repeat in 2010 and 2011) and – crucially – looking to further consolidate at home. And will expansion mean foreign airline acquisitions, just as China’s wealth funds are buying into foreign resources? [1760 words]

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Subheadings:

  • Pulling out of the 2008 nose dive
  • Tide rolls back in second half of 2009
  • Airline traffic well above forecasts in 2009
  • Airports also have a solid year
  • 2010 could be very strong: pent-up demand
  • Around 200 more aircraft to be added this year, few retirements
  • Overheating a concern
  • CAAC encourages consolidation - and foreign investment?

Graphs and data:

  • Chinese mainland carriers’ passenger numbers and cargo volume growth: 2005 to 2009
  • Chinese major carriers’ passenger numbers and growth: 2009
  • Chinese airports passenger numbers and passenger numbers growth in 2009: (Annual pax over 5 million airports)
  • Chinese mainland carriers’ passenger numbers and growth: 2003 to 2009
  • Chinese mainland carriers’ cargo volume and cargo volume growth: 2003 to 2009
  • Chinese airline annual aircraft deliveries and % of total Asia Pacific deliveries: 2007 to 2011F
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