China’s new Kunming Airport project is expected to complete up USD1,757 million worth of investment this year, including USD878 million in construction projects and USD878 million to complete the construction of the Kunming Airport Economic Zone (Shxb.net, 22-Feb-2010).
New Kunming Airport project to complete USD1,757 million of investment in 2010
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Lucky Air to be China's first long haul LCC, to Europe/N America in 2016; China international up 29%
There are debates about impacts from China's "new normal" of slower growth. Yet from an aviation perspective, it so far remains evident that aviation is not as impacted – despite the typical correlation between traffic growth and GDP. Chinese traffic is heavily leisure-oriented; China's middle class is growing; thirst for international travel is expanding; visa liberalisation continues to improve and foreign countries (and their airports) are embracing of Chinese visitors. All these factors make travel easier, and the Chinese government is encouraging – sometimes by force – for its airlines to "go out".
The first four months of 2016 experienced a smaller growth rate of 29% compared with 4M2015's 40% increase, but the net addition of passengers in 2016 so far is larger than in 2015. The international market is becoming more crowded with new operators.
The latest will be Lucky Air – the Kunming-based LCC division of the HNA Group and U-FLY Alliance. Lucky intends to deploy 787-9s to Europe and North America by the end of 2016.
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.