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- No. 1 Hangzhang S Rd.
Dayuan Township, Taoyuan County
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- Taipei Taoyuan International Airport
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China Airlines is the flag carrier of the Republic of China (Taiwan) whose majority shareholder is the China Aviation Development Foundation; a body wholly owned by the Taiwanese government. Based in Teipei, China Airlines operates a fleet which includes Boeing and Airbus equiptment supporting an extensive network within Asia as well as services to North America, Canada, Europe, Australia and the Pacific. China Airlines Cargo is the airline's freight division, operating in Asia, Europe and North America. China Airlines is considering joining the Sky Team alliance.
Location of China Airlines main hub (Taipei Taoyuan International Airport)
China Airlines share price
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Virgin Australia and Air New Zealand have applied to the ACCC for a five year renewal of their trans-Tasman alliance which expires on 31-Dec-2013. The renewal would replace the current arrangement that was approved for three years in Dec-2010.
This time around, however, the world has changed. Virgin Australia and Air NZ have requested that the carriers' need to maintain a base level of capacity on the trans-Tasman as a whole, and grow seasonal capacity on some routes, should be dropped as conditions from the renewed authorisation. The airlines claim they have demonstrated that their alliance is not harmful to consumers and has resulted in competitive responses from other airlines.
Furthermore, Virgin Australia and Air NZ say the capacity conditions may in fact be harmful to consumers by preventing the carriers from efficiently reacting to changes in market conditions.
The possibility of Qantas and Emirates extending their global alliance to the Tasman emphasises the need to renew the Virgin Australia-Air NZ alliance, according to the carriers.
Singapore Airlines' (SIA) long-haul low-cost subsidiary Scoot is further exploiting the absence of a local LCC in Taiwan by selecting Singapore-Taipei-Seoul Incheon as its seventh route. Scoot is already the largest low-cost carrier serving Taiwan, which has the lowest LCC penetration rate among major Asian markets. Following the mid-2013 launch of Jetstar Hong Kong, Taiwan will also be the last remaining medium or large-size market in Asia without a local LCC.
Scoot launched service in Sep-2012 on the Singapore-Taipei-Tokyo Narita route, which the carrier now serves daily. The carrier has been focusing primarily on stimulating demand in the local Singapore-Taipei and Taipei-Tokyo markets rather than on Singapore-Tokyo through passengers.
Scoot will similarly focus on the under-served Taipei-Seoul market after launching the Singapore-Taipei-Seoul route on 27-May-2013 with an initial three weekly frequencies. The new route will also boost Scoot’s presence in the competitive Singapore-Taipei market as the additional three weekly flights make Scoot the largest carrier on the route, just ahead of SIA.
Profits have tumbled or become losses at China Airlines and EVA Air, Taiwan's two largest carriers and its only intercontinental ones. But the financials – affected by the usual suspects of high fuel and depressed freight and economic certainty – belie sound restructuring the carriers are making to respond to significant changes in the Taiwanese market, long one of the quietest areas in North Asia.
The opening of cross-Strait flights to China has, in a short time frame, delivered them an entirely new and very profitable market. It has meant pulling back elsewhere to pump capacity into the mainland - although additional aircraft were also acquired.
China Airlines is looking to permanently de-emphasise cargo's revenue contribution, sensing it to be too volatile, while EVA Air wants to increase its share. As the mainland market continues to expand, new growth (and competition) is also emerging from Japan after an open skies bilateral agreement. Further liberalisation across Asia will open new markets, but serving regional routes bears the risk of being pushed off if low cost carriers, much discussed in Taiwan - but mostly ignored - gain traction.
For all the change that has occurred, much more is inevitable in 2013.
It certainly took North Asia some years to have momentum for low-cost airlines that was anything like booming Southeast Asia. 2012 delivered on that with three new LCCs launching in Japan and plans underfoot in Hong Kong for Jetstar Hong Kong as well as a possible transformation of Hong Kong Express into a LCC. While elsewhere the region may not have gone as far as producing LCCs, there is active discussion of having LCCs and the reforms needed to welcome and support them.
Talk is strongest in Taiwan, which has seen considerable growth from LCCs in North and Southeast Asia. South Korea is considering how and when its LCCs can become better competitors, shedding some of the comforts they have been unwilling to charge passengers. Japan will see growth, from existing LCCs and new ones, a challenge for incumbents. Reforms in China may enable LCCs in the future to launch, while all LCCs are watching how to be hybrid and chase yields. These are eight North Asian LCC topics to watch for in 2013.
A proposed regional alliance amongst SkyTeam's Greater China members – Taiwan's China Airlines, China Eastern, China Southern and Xiamen Airlines – may appear to be a niche strategic move in the small but highly profitable and expanding Taiwan-mainland China market.
Yet the alliance is also indicative of the growing trend for North Asian airlines to combine their strengths against imposing competitors, namely Air China and Cathay Pacific.
The alliance would account for about half of the capacity between China and Taiwan, a valuable market which is continuously expanding under tight control and route delegation. Its share on certain key business routes, like Taipei-Shanghai, would be even higher. Further airline strength and capacity will pressure Hong Kong-based carriers, which once had a healthy business of carrying passengers between China and Taiwan via their hub.
An unusually public discussion about supporting local low-cost carriers is occurring in Taiwan. Once a sleepy market, like elsewhere in North Asia, Taiwan is seeing growth on the back of regional services and cross-strait flights to mainland China. But a shakeup is needed if Taiwan is to realise its goal of increasing tourists from six million in 2011 to 10 million in 2015. New and high-profile LCCs are entering, including Scoot, a subsidiary from none other than perceived industry-standard Singapore Airlines, as well as Peach Aviation, partially backed by All Nippon Airways in Japan, a market once synonymous with stagnation.
With LCCs from the north and south, as well as Jetstar setting up a subsidiary in Hong Kong, Taiwan is understandably seeing opportunity. But there is also the threat of encirclement, although not all incumbent Taiwanese carriers agree on that. China Airlines and EVA are cautious to unsupportive while the LCC mongering has been pushed by TransAsia Airways, whose lean position could see it capitalise on opportunities. Taiwan's regulator has finally entered the discussion and effectively gave its blessing for local LCCs to be established, although significant reforms are needed. If realised, great benefits await.
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