China Eastern Airlines
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- 2550 Hongqiao Road, Hongqiao International Airport
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- Shanghai Pudong Airport
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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)
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3,621 total articles
298 total articles
'Luck' may be in its name but Chinese carrier Lucky Air is not leaving its future entirely to fate. The Kunming-based carrier is expected to transition to the low-cost model, following the Chinese government's rapid rise in LCC interest.
With a southwestern base and route network concentrated on secondary cities, fare premiums are hard to attain. Lucky Air hopes to differentiate itself in China's often dated and monotonous airline branding, and so has introduced a new logo, becoming the latest HNA-affiliated airline to re-brand.
Lucky Air is one of two Chinese carriers granted international traffic rights at Kunming and there is the prospect for further international growth, mostly to South and Southeast Asia. If it is to be serious about addressing costs, Lucky Air will need to look at its fleet, a mix of 737s and A320s. Its 26 aircraft fleet could grow to 70 by 2020, including possibly widebody aircraft within three years, the carrier announced at the Routes Asia forum in Kunming.
Kunming in southwest China has been the country's traditional gateway to Southeast Asia, and flights to Southeast Asia account for 60% of Kunming's international seats, making Kunming an exception to most other Chinese airports mostly with larger international exposure to Northeast Asia. Kunming hopes to use its Southeast Asian network to be a transfer hub from North America and Europe, and in 2014 its regional government established a RMB200 million (USD32 million) fund for new international routes.
Such traffic, while plausible in the long-term, will be the icing on the cake. 93% of the airport's seats in Mar-2015 are domestic and Kunming carried 32m passengers in 2014. International will be a small but growing part of Kunming's story, with sixth-freedom Europe/North America-Southeast Asia traffic even smaller. Kunming's geography disadvantages it in having long-haul flights to North America.
While geography is more favourable to Europe, competition from Southeast Asian and Gulf carriers is strong and Kunming will be up against mighty networks. Point-to-point traffic volumes are not large enough to contemplate filler connecting traffic and Kunming cannot rely on connecting traffic the way Dubai can.
China Southern Airlines nearing target of 55x flights to Australia/NZ, continuing international push
Chinese aviation often features "light switch" developments: the sector can fumble along and then suddenly, as if a switch is flicked, change mindset to an ambitious target and work tirelessly to achieve it. Such was China Southern's 2010 plan to focus on Australia/New Zealand. After having not even a daily service to Sydney, the relatively unknown Guangzhou-based airline is to have 55 weekly flights in 2015. And China Southern now looks likely to achieve the goal as the airline will 53 weekly flights to the region beginning in mid-2015. Increases over the busier holiday season could tip it past the 55 mark threshold.
The next challenge will inevitably be sustainability. China Southern's Australia/New Zealand capacity fluctuates more than other major Asian airlines, with its strong outbound-China market having sharp peak and off-peak seasons. Operating a full year of 55 weekly flights may be some years away. But there is no doubt the aviation and tourism markets are forever changed, with more to come. Not so long ago China was a small blip for Australia but now there are services from the Big 3 as well as two smaller carriers, along with a proposed JV between Qantas and China Eastern as well as Air New Zealand and Air China, developments hardly on the radar a few years ago. China Southern's international push – in Australia and beyond – has pushed international capacity growth from 19% to 31% of ASKs.
There are three characteristics of China's airlines flying long-haul: first is the role of government pushing and often subsidising routes, even on outbound-heavy leisure flights, such as to Europe. There are some elements of a herd mentality: witness China Southern expanding in North America after Air China. And then there is domination: China Southern in a few years became a common name in Australia while Air China will soon have three daily flights between Beijing and Los Angeles.
Chinese airlines have grown in Australia, North America and Europe. The missing continent in their growth story is Africa (South America will be only a small component).
Chinese airlines have come and gone in Africa, but 2015 should cement efforts to link Africa with China. China Southern will open a service to Nairobi, in addition to Air China's previously announced Johannesburg service. For the airlines, Africa will be a very different market from Australia, Europe and North America. It will not be as big or sustainable, but it will now start to grow after many quiet years, with strong overtones of trade flows.
The China-US market continues to grow, as expected, but the segment is showing acceleration in the way that growth is occurring. China Eastern plans to launch Nanjing-Los Angeles service, its first trans-Pacific route from a city outside its Shanghai hub. Hainan will launch a new Beijing-San Jose service, consistent with its secondary city focus, but thicken Beijing-Boston and Beijing-Seattle services with flights to those US cities from Shanghai. Hainan Airlines becomes the first (by two weeks) Chinese carrier to serve a US point from multiple Chinese cities. US airlines already serve Chinese points from multiple US cities.
And Delta Air Lines, normally conservative with long-haul growth, has brought forward a Los Angeles-Shanghai service in its five-year plan to a Jul-2015 start date. Not only is Delta accelerating growth, it is doing so on the most competitive US-China route; it becomes the fourth airline on the city-pair after America, China Eastern and United. Delta attributes its growth to the visa liberalisation between China and the US, which Delta says was a surprise.
At first blush, Korea has much to celebrate. Flagship airport Seoul Incheon International saw a 9.7% increase in 2014 passenger numbers, well above the country's 3% GDP growth rate. Visitor arrivals increased 17%, continuing a streak of near double digit annual growth. These are accomplishments, but Seoul Incheon is worried about falling transit traffic: after over a decade of transit growth, 2014 saw a half million decrease in transit passengers. The share of transit passengers fell to 16% from a high of 18% in 2009.
Driving this is a confluence of events: the "Korean Wave" means Korean Air and Asiana are carrying more point-to-point passengers, traffic rights with key source markets have not been expanded, and once-sleepy Asian airline and airport peers are waking up and taking back the traffic Incheon has attracted. Long-haul growth is occurring out of Beijing, Tokyo, Hong Kong and Taipei. Incheon wants to have 10 million transit passengers in 2017 and is looking for new opportunities, but so far these plans are vague. Incheon may follow Singapore Changi's move to target LCC connections, which Kuala Lumpur has excelled at.
Yet Korea's regulator is overlooking the queue of airlines – from Singapore Airlines to Emirates – that have been asking for more traffic rights. Protecting the nation's flag carriers may come with a price.