China Eastern Airlines
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- 2550 Hongqiao Road, Hongqiao International Airport
- Main hub
- Shanghai Pudong Airport
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China Eastern Airlines
China Southern Airlines
China United Airlines
Delta Air Lines
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Shanghai-based China Eastern Airlines is one of China's 'big three' state-owned airlines, with hubs at Shanghai's Pudong and Hongqiao airports, as well as Kunming Airport in southwest China. The airline operates a fleet of Airbus, Boeing, Embraer and Bombardier aircraft to support an extensive network, serving over 350 domestic routes and 40 international destinations, including cities in Australia, Europe, Korea, Japan, North America and Southeast Asia. China Eastern merged with Shanghai Airlines in 2010 and joined China Southern in the SkyTeam Alliance in Jun-2011.
Location of China Eastern Airlines main hub (Shanghai Pudong Airport)
China Eastern Airlines share price
4,265 total articles
322 total articles
Delta Air Lines has opted to expand its stake in Aeromexico, following a similar move earlier in 2015 when it increased its investment in Brazilian airline Gol. Delta has also invested in China Eastern Airlines during 2015, and unsuccessfully pursued a stake in Japanese airline Skymark.
With low fuel costs propelling record profitability at US airlines, perhaps the time is right for Delta to solidify investment to build a competitive network for the long term. Its moves during the past year reflect an aggressive pursuit of strengthening its presence in Latin America and Asia.
By enlarging its stake in Aeromexico, Delta also grows its ability to exert influence over the airline, something that Delta believes could help Aeromexico improve its overall business strategy.
Part 1 of this report examined the rapid expansion of China's airlines into international markets in 2015.
This second Part reviews the plans and likely developments in the near term. The second tier airlines reviewed, Tibet Airlines and Shenzhen Airlines are new arrivals on the long haul international scene
Three Chinese airlines – Air China, China Eastern and China Southern – today operate 77% of China's widebody aircraft. But as smaller airlines and secondary airports become more active internationally, the scene is changing. A 37% increase in international passengers carried in the first 8 months of 2015 bears testimony to the potential that is waiting to be unleashd.
If a nation is not a country until it has a local beer and airline, then an extension may be that the carrier needs to fly to London. That is based on the constant theme for Asian carriers – such as Garuda, Philippine Airlines and Vietnam Airlines – opening routes to London and maintaining them despite financial pressures. But this does not apply to China. Chinese airlines have as many seats to Italy as to the UK; more Chinese tourists fly to New Zealand than to the UK. All seven of China's long haul carriers intend to fly to Australia but only four will fly to the UK.
This backwater issue is a problem for UK tourism - and for British Airways. Concurrent with President Xi's visit to the UK, visa restrictions will be loosened for Chinese nationals. But this is not enough; British tourism is hurt by the UK not being a member of the Schengen zone, where Chinese visitors can apply for one visa and visit multiple countries on one trip. The resulting limited Chinese interest in the UK hurts British Airways, which has the smallest presence of major European carriers in China. Finnair for one is bigger, furthering the case for deeper IAG-Finnair ties, or even a takeover. BA has a strong if quiet strategy to grow its China business, but still needs more support.
Clouds loom over Cross-Strait airline market as Taiwan faces political change. Hong Kong may benefit
The ruling, and pro-Beijing, KMT party is expected to lose the Jan-2016 elections in Taiwan. Under the KMT's leadership Beijing and Taipei have forged closer ties, including the launch of charter and then scheduled Cross-Strait flights between mainland China and Taiwan, which had been prohibited for decades. There has been growth, with increase in overall frequency as well as destinations available to be served in the still tightly-regulated market.
An outstanding gripe from the Taiwanese side was that, for complex reasons, their airlines were not permitted to carry transfer traffic from mainland China to Taiwan and beyond to other markets – such as Australia and North America, two popular long haul markets from mainland China and for which Taiwan is well positioned to be a hub. Earlier in 2015 when relations were warmer, Taiwanese carriers were expected to receive transfer traffic rights by the end of the year. But as the Taiwanese political situation has turned unfavourable to Beijing, an Oct-2015 meeting did not grant transfer traffic rights. The bigger risk is that cooling relations would slow Cross-Strait liberalisation – or at an extreme, recede. One outcome could be that visitor growth would instead funnel through the Hong Kong hub.
There is no long haul market more popular with Northeast Asia's airlines than North America. There are fewer competitors than to Europe, no intermediate options (Gulf carriers – for now) and a good balance of leisure and premium demand. Southeast Asian airlines, with unfavourable geography, have had to sit out. Philippine Airlines is an exception, but Malaysia Airlines has ended North American service while Thai Airways and Singapore Airlines have ended their non-stop experiments with A340-500s that proved too costly against twin-engined competitors and rising fuel prices.
Following SIA's exit, one-stop competitors from Northeast Asia and the Gulf added service to Singapore for its valuable premium traffic. This has impacted SIA's competitiveness, and it plans to return to non-stop US services in 2018 with the new A350-900ULR "Ultra-Long-Haul" variant for which it is the launch customer. The A359ULR will be more efficient than the A34-500s, but competitors' fleets have also become more efficient.
The decision by Hainan Airlines to re-enter the Australian market means it will be the sixth Chinese airline to serve Australia. China has seven long-haul carriers as of Sep-2015, and Australia is their most frequent destination. They serve Australia from nine points in China compared to linking Western Europe with 14 Chinese cities.
After Australia are Canada and Russia, which each receive service from five Chinese airlines. Four airlines serve or intend to shortly open service to each of France, Germany, Italy, the UAE and USA. An abnomaly may be found in the UK, which has service from only three Chinese carriers. London is the prized destination for Southeast Asia's growing airlines: Garuda, PAL and Vietnam Airlines. But challenges with visas, in addition to Heathrow slots and high departure taxes, limit opportunities. Despite a record number of outbound Chinese tourists in 2014, the UK saw a decrease in Chinese visitors.