China Eastern Airlines
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- IATA Code
- ICAO Code
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- 2550 Hongqiao Road, Hongqiao International Airport
China (People's Republic of)
- Main hub
- Shanghai Pudong Airport
- Business model
- Full Service Carrier
- Domestic | International
- Airline Group
- Part of China Eastern Air Holding Company
- Joined Alliance
- Association Membership
- Codeshare Partners
China Eastern Airlines
China Southern Airlines
China United Airlines
Delta Air Lines
Hong Kong Airlines
KLM Royal Dutch Airlines
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
3,072 total articles
278 total articles
As the trans-Pacific aviation market develops, traffic expands and new entrants arrive on the scene, there are predictablity changes in the ways passengers and freight move across this potentially vast long-haul market. One of the largest changes is occurring as Tokyo is bypassed.
US airlines in particular are resorting to use of the new direct rights - and new equipment - which provide them with improved non-stop access into the Chinese market and other Asian points.
This is the last part in a four-part series of analysis reports on the dynamic North Pacific market. The first part focused on Asian airlines, the second part on US carriers and the third part on the growing role of hubs in China.
Unsurprisingly, nearly 80% of the route expansion across the North Pacific in the past five years has occurred at hub airports where behind gateway connections are readily available - although for various reasons those connections are not always accessible on the same terms to Asian carriers, even where they are partners of the North American airlines.
China's emergence is marked by new service - 23% of all frequencies across the North Pacific are today are directed towards Shanghai and Beijing, up from 16% in 2009, while Tokyo has suffered the most notable reduction in flights.
However, as the market develops and as new factors like the introduction of the 787 begin to influence network planning, secondary airports are also starting to benefit. But it is a gradual process. Since 2009 there have been five new North American cities and three Asian airports directly linked for the first time.
Chinese airlines are increasing their commitment to US and Canadian points; and airports such as Shanghai Pudong, home of China Eastern, and Wuhan are offering generous inducements to airlines to add new long-haul service.
North Pacific air route development: Part 2 - US airlines’ risk aversion and Canada's restrictionism
In Part 1 of this report, we reviewed the higher than average traffic growth on the North Pacific over the past five years and the factors behind Asian airlines' route development.
In Part 2 we examine the aeropolitical environment on the Pacific and US airlines’ trans-Pacific roles. Canada's conservative policy is a constraint on Asian airline connections - and on potential air services to Latin America via Vancouver. Meanwhile, China's reluctance to move to open skies with the US limits American carriers' expansion plans.
The resurgence of US airline expansion is made possible not only by the prospect of market growth but also by their reincarnation as lower cost operations following bankruptcy and their subsequent mergers.
The North Pacific market has expanded well above global averages over the past five years and looks set to continue to expand rapidly. There are great differences in the performances of Asian and North American airlines, just as regulatory variances between their respective governments influence growth rates.
Today round two in the battle for the trans-Pacific market has begun. In the last decade ultra-long-haul non-stops by Thai Airways and Singapore Airlines, were introduced – and each withdrawn recently. Meanwhile, more northerly-based Cathay Pacific's non-stops to east coast North America have grown strongly. Hub power has been a core value; Bangkok and Singapore were geographically disadvantaged (fuel-inefficient aircraft did not help the cause). Kuala Lumpur, whose Malaysia Airlines did not have non-stops, was a smaller and less effective hub that caused MAS ultimately to withdraw one-stop Los Angeles and New York service.
Over the past decade the trans-Pacific duelling was among North and Southeast Asian airlines, as their North American airline peers remained preoccupied with bankruptcy, followed by consolidation. Now, with airlines on both sides of the Pacific contesting the market, the new fight for trans-Pacific markets is among the regions: Seoul versus Hong Kong, Seattle versus San Francisco. Renewed and reconfigured fleets are enabling expansion, supported by economic growth, changed visa rules, and, in the case of the US (but not the more restrictive Canada), liberal and often open skies air service agreements.
The market fundamentals are the same, but airline drives to expand have varied: for Japanese and Taiwanese carriers, new opportunities; for Asiana, Chinese and US carriers, to catch up; and for Cathay, to defend its already stronger position.
Rapid expansion will continue to impact yields and profits negatively, but airlines will remain focused on the long term. Growth will continue and as it does partnerships will grow deeper. There is still much upside potential, but in the meantime the marketplace will be competitive and challenging.
Time has provided clarity for China Eastern Airlines. The failed 2007 bid of Singapore Airlines to purchase a stake in China Eastern Airlines left the Shanghai-based carrier with a sour taste as it lost the chance to find a partial solution to its weak performance and dwindling finances. Although at the time China Eastern threw its support behind the deal, which was derailed by competitors Air China and ultimately Cathay Pacific, in hindsight China Eastern may be glad the agreement did not go through.
Singapore Airlines was buying into China Eastern when it was weak; today China Eastern is stronger and is also more profitable than Singapore Airlines. China Eastern now worries SIA would have gained more than it put in.
These considerations are important as China Eastern continues to seek a strategic investor. China Eastern sees that quality must complement its size and an international partner could best help its internalisation. China Eastern is weary of an Asian airline investing in it but perhaps paradoxically wants an investment to mesh culturally.
The definition of insanity is repeating the same action but expecting a different result. This is where Asia’s airlines partially find themselves about air freight, one unifying – albeit pessimistic – theme across the region. The freighter fleet at Asia’s major airlines is largely unchanged at 135 aircraft, down from 2012’s peak of 148 aircraft but up from the 133 in 2006. Korean Air, China Eastern and Cathay Pacific have made the largest net additions while EVA Air and Singapore Airlines are alone in making net decreases.
Some airlines have made changes to beat the odds on insanity. Older and inefficient aircraft like the MD-11 and 747-400 BCF have been replaced by newer models such as the 747-8F and 777-200F. Although welcome, these efforts alone cannot sustain the industry. The sheer aircraft numbers mask lowered productivity, generally weakened load factors and yields, competition from outside the region and growing bellyhold capacity. Of eight airlines studied, four had lower freight capacity in 2013 than 2012.