Hainan Airlines confirmed (17-May-2013) the carrier will take delivery of its first Boeing 787 aircraft within the next two months. The first two of the carrier’s 787 aircraft will be deployed on domestic services including twice daily Beijing-Haikou and daily on services from Beijing to Shanghai and Chengdu initially. The carrier also confirmed the 787 will be deployed on its international routes including Beijing-Chicago, Beijing-Seattle and Beijing Toronto. Hainan Airlines’ 787 is configured in a 36 seat 2-2-2 business configuration and 177 economy seats. [more - original PR - Chinese]
Hainan Airlines confirms delivery of first Boeing 787 within next two months, outlines route plans
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There can be no doubt about the long-term growth opportunity for Chinese airlines in long haul markets. But the short term is challenged by air traffic rights being exhausted or nearly utilised in key markets such as Canada, Germany and the US. The foreign parties have sticking points – slots, overflight rights – that are not easily solved, meaning that Chinese airlines could face a few years of dancing around bilaterals that are maximised, or they may experience only incremental growth.
Yet widebody aircraft deliveries are growing. The four main Chinese airlines – Air China, China Eastern, China Southern and Hainan – will take 22 further widebodies in 2016, 18 in 2017 and then 37 in 2018. These are official figures and exclude pending deals (10x 777-300ERs for China Eastern) as well as aircraft that appear on order books at the last minute. This also excludes the growing widebody operation at secondary airlines such as Beijing Capital Airlines, Tibet Airlines and Xiamen Airlines. Air China and China Eastern have 50-80% as many widebodies on order as they do in service.
China-UK air service agreement permits growth as Chinese airlines constrained in most other markets
An agreement between China and the UK to more than double their air service agreement is good timing for both sides. Chinese airlines are finding an imbalance: they are taking delivery of widebody aircraft and more Chinese airlines are flying long haul but traffic rights to major markets – the US, Canada, Germany and France – are becoming depleted. Negotiations to add traffic rights have not succeeded, typically due to the foreign side being concerned about accessing Chinese slots or Russian overflight rights.
The agreement with the UK to expand the number of weekly passenger flights from each side from 40 to 100 reflects considerable pragmatism on the part of the UK: British Airways and Virgin Atlantic are not growing in China, and China is a large growth opportunity. The UK has lagged on Chinese tourism. It was only in 2015 that China became the UK's largest inbound market.