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China Eastern 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


 
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Delta Air Lines plans a China Eastern stake. Will other US airlines follow the foreign equity path?

28-Jul-2015 12:10 PM

Delta Air Lines is making its largest airline investment yet at USD450m. The prize is China Eastern Airlines, on the cusp of re-vitalisation, long-haul growth and a beneficiary as China's aviation power looks set to tip to Shanghai. Yet Delta's largest investment buys it only 3.55% and an observer's seat on the board. In comparison, USD360m bought Delta 49% of Virgin Atlantic and three board seats. In light of Delta's anti-Gulf carrier dispute, Delta will quietly need to reconcile the fact China Eastern is the most heavily subsidised Chinese airline.

Delta emphasises it is "solidifying" its partnership with China Eastern. The two account for 24% of US-mainland China seat capacity in Jul-2015. That is approximately 20,000 weekly one-way seats compared to the 78,000 US-UK seats Delta and Virgin have on the tightly held North Atlantic. Delta's stake reflects long term potential but as a mere 3.5% it is more symbolic and a placeholder for a potentially deeper partnership.

China Eastern has been considering its future direction, and even whether it should leave SkyTeam for the oneworld alliance. Delta's stake is an attempt to maintain the status quo. Delta needs China Eastern more than the China Eastern needs Delta. There is some wariness at China Eastern about Delta's intentions, but this could be the start of a long and close relationship. It is likely to spark competitive responses, such as United Airlines re-evaluating Air China's wish for a deeper partnership. It is unclear if Delta's stake signals other foreign airlines can buy into Chinese airlines.

China Southern Airlines exceeds 55x flights target to Australia/NZ. Competition regulators query JVs

21-Jul-2015 3:58 PM

Mission accomplished: China Southern Airlines is already surpassing its goal of having 55 weekly flights to Australia and New Zealand by the end of 2015. From about 25 weekly flights in 2011, China Southern in Dec-2015 will have 65 weekly flights. This includes three daily flights – one on an A380 – to Sydney, a frequency that compares to Cathay Pacific’s four and Singapore Airlines’ average 4.5.

Competitors are responding with a series of JVs that await regulatory approval. Qantas-China Eastern received a draft rejection while Air New Zealand-Air China awaits approval and Air New Zealand-Cathay Pacific needs re-authorisation. The Qantas-China Eastern initial rejection appears misguided while New Zealand stakeholders are questioning the benefits of the Air NZ-Cathay alliance in a market that where capacity has decreased by 18% while the Air NZ-Singapore Airlines alliance has grown capacity by 20%.

It might appear lines in the market have been drawn, but it is still early days. China Southern’s achievement in the market is only its first. The question is what its next goal is, and the answer is being kept closely guarded.

Northeast Asia's cargo airlines re-fleet. But SIA has no plans, MAS weighs future & Thai exits

1-Jul-2015 12:51 PM

Northeast Asia's combination passenger-freight airlines are re-fleeting their main deck cargo operations. EVA Air is the latest, announcing at the Paris Air Show its intent to acquire five 777Fs. The 777F has also been used to re-fleet the cargo units affiliated mainland China's big three airlines: Air China, China Eastern and China Southern. The largest in-service 777F fleet in the world is with China Southern, with 10. Korean Air has taken 777Fs in addition to 747-8Fs, which only Cathay in Asia has been the other combination airline to use. There are no known re-fleeting plans from Asiana and China Airlines.

The airlines that have re-fleeted have been optimistic about acquisition costs being offset by operating efficiencies.

Southeast Asia has a different outlook. Thai Airways has exited the main deck freight business and Malaysia Airlines may do the same, although both were small players. Singapore Airlines Cargo is the largest in Southeast Asia but with only eight in-service 747Fs and no plans to re-fleet. As with the passenger business, Southeast Asian carriers are disadvantaged in serving North America, the main freight route for Northeast Asian carriers. To Europe there is large competition, including from Gulf carriers. 

Vancouver International Airport's vision: to connect Asia with Latin America as traffic jumps

17-Jun-2015 8:32 PM

Vancouver International Airport charted impressive growth in 2014, leveraging and solidifying its position as Canada’s second largest airport. Vancouver is buoyed by its leading position as the country’s gateway to Asia; but in 2015 it has also secured new service from Air France and Aeromexico.

As it celebrates solid passenger numbers, Vancouver also faces growing competitive pressure from nearby Seattle now that Delta is quickly building the airport into its main gateway to Asia. But a recent expansion of Canada’s transit without visa programme should help Vancouver face the increased competition by giving the airport the potential to eventually connect travellers from Asia to Central and South America.

Overall Vancouver seems well positioned to meet its growth targets, which include handling 25 million passengers annually by 2020, a nearly 29% jump over a record number of customers travelling through the airport in 2014.

Beijing Capital Airlines to be China's seventh airline to fly long haul, planning European routes

9-Jun-2015 7:20 AM

China started 2015 with five of its airlines flying long haul. By the end of the year, the number will be seven – the same number of airlines across all of North America that fly long haul. Following Xiamen Airlines' 787 services to Amsterdam and Sydney, HNA's Beijing Capital Airlines plans to open services to Europe in Sep-2015. Limited Copenhagen service is planned to be served from Hangzhou and Beijing while Helsinki will be served from Beijing only. Capital Airlines' 54 Airbus narrowbody aircraft will reportedly be joined by three A330s by the end of the year. More international flying – and domestic services – can be expected to make efficient use of the new widebody fleet.

Capital Airlines has a mixture of scheduled and charter services. Under HNA's complex ownership structure, Capital Airlines is part of HNA Tourism, which could generate group benefits from Capital Airlines' expected quasi-charter flights. Most other HNA-affiliated carriers – from Hainan Airlines to West Air to Aigle Azur – are under HNA Aviation. While flagship group carrier Hainan Airlines focuses on North American flying with 787s, Capital Airlines could be used to explore other markets and ultimately be a test case for long-haul service from other mainland HNA carriers, of which there are many.

HNA/Hainan Airlines buys 6.2% of South Africa's Comair, accelerating China-Africa aviation links

2-Jun-2015 1:58 PM

China's expansive HNA Group, including flagship carrier Hainan Airlines, is continuing its international acquisition strategy with a USD13 million investment for a 6.2% stake in South Africa's Comair, which operates a full-service brand under a British Airways franchise and a low-cost carrier, Kulula. Uniquely to recent airline acquisitions, Comair is well-run and profitable. The purchase has been made for less than half the cost of a narrowbody jet, making it perhaps relatively inexpensive.

The synergies between the parties are unclear. Comair does not fly outside of southern Africa while HNA no longer flies to Africa – and if it did, it probably would not need an investment stake to work with Comair, which is generally open to partnerships. HNA is an investor in Ghana's Africa World Airlines, but there are no network links (yet) between that airline and Comair.

The investment comes after HNA and Air China are understood to have looked at investing in South African Airways, although this was too politically difficult. Africa is a new theme for Chinese aviation, with growing air routes, airport infrastructure projects and placement of Chinese aircraft to African airlines and governments.

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This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.

This content is exclusively for CAPA Membership Subscribers

CAPA Membership gives you the latest aviation news and alerts, access to CAPA articles, reports, and our leading aviation data with optional premium add-ons.