Kunpeng Airlines suspended its Zhengzhou-Xi’an service while Joy Air has reportedly reported a significant reduction in load factor on the sector due to the opening of the high-speed rail link between Zhengzhou and Xi’an on 06-Feb-2010 (Money.163.com, 16-Mar-2010). Kunpeng Airlines operated the route with Bombardier’s CRJ jets with a 97 seat configuration. The carrier reported a load factor of 49.3% on the sector in Jan-2010. Joy Air operates the route with MA60 aircraft with a 52 seat configuration and reported an average load factor of 70% prior to the launch of the high-speed rail.
High speed rail services provoke Kunpeng Airlines to suspend Zhengzhou-Xi’an route
You may also be interested in the following articles...
Disruption in the airline industry. It will happen sooner than we think: Part 1
There are two essential elements to the airline industry: flying aeroplanes and selling (and buying) seats. More technically this can be described as (1) operational; and (2) marketing and sales. There are other important activities, such as lobbying government to limit competition, and exploiting frequent flyer programmes, but those two are the core activities now facing disruption.
The former is unique to airlines, is uniquely regulated and engages massive governmental regulatory intervention, technical and economic. The marketing and sales activity has some aspects particular to aviation, but generally differs little from any other form of retail – except that most older airlines have tended to be particularly slow at learning the art.
This analysis reviews the nature and degree of disruption in each core area and what potential the future holds. In the regulatory area, China will be the big disruptor as it expands into its new global role; and technology and the associated rise in consumer empowerment will transform the process of buying and selling tickets. It will happen sooner than we expect.
Malaysia Airlines update Part 2: China drives resumption of capacity and network growth
Malaysia Airlines will resume expansion in 2017 with several new routes and capacity increases on existing routes. Most of the expansion is directed at China, with eight new destinations, the resumption of a second daily flight to Shanghai, and upgauging one of its Hong Kong flights.
The airline is evaluating further expansion in China and elsewhere in North Asia in 2H2017 if it succeeds at securing additional A330s. Malaysia Airlines continues to seek leases on up to four A330s, which would result in a fleet of 19 aircraft.
Overall seat capacity will be up by 5% to 6% in 2017. Passenger numbers could potentially increase by more than 10% as Malaysia Airlines aims to significantly improve its load factor on the back of new lower fares.