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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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3,394 total articles

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284 total articles

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Long-haul flights into secondary Chinese airports are challenging but airlines continue fast growth

12-Dec-2014 2:00 PM

The history of intercontinental passenger routes into secondary Chinese cities is brief: as recently as 2010 there was on average just one or more long-haul flight a day into a secondary market. This more doubled in 2011, and in 2015 there will be 11 flights a day. These will be spread across 26 city pairs, up from only four in 2010. Most secondary long-haul routes are to Europe, with the Middle East and Australia prominent. North America is catching up.

Foreign airlines have led the push, namely KLM and Lufthansa. Etihad Airways and Qatar Airways were also some of the first before being joined by others including British Airways and United Airlines. Chinese carriers are gaining a presence on secondary long-haul routes, largely as a result of incentives and subsidies. In 2015 so far there will be eight foreign airlines operating secondary routes compared to five Chinese airlines. 2015 marks the first time a secondary long-haul route (Etihad's Abu Dhabi-Chengdu) will be operated daily across the year. The routes as a group face sustainability challenges, with losses common, but more growth is still likely.

Chinese airline growth in direct services will reduce New Zealand dependency on Australian transfers

27-Nov-2014 1:00 PM

China Southern Airlines is on track to achieve its target of having 55 weekly flights to Australia/New Zealand by the end of 2015, with peak southern summer flights to reach 52 weekly. China Southern's presence in Australia has been highly visible, but its growth in New Zealand has been quieter. After entering New Zealand just three years ago, China Southern in 2015 will have more peak capacity there than Cathay Pacific. China Eastern will also enter the market, although only for the peak season, while Air China has flagged entry into New Zealand as part of a proposed joint venture with Air New Zealand. Chinese visitor numbers to New Zealand have doubled in four years.

This additional capacity should help New Zealand receive more direct Chinese visitors. This will help reduce its reliance on passengers arriving from Australia, which in 2013 accounted for half of the Chinese visitors to New Zealand. Air China's proposed joint venture with Air New Zealand will help Air New Zealand's prospects in mainland China. The two have been distant, causing Air New Zealand to withdraw from Beijing. Still, Air China may not be enough for Air New Zealand, which may need to consider another Chinese partner.

China Eastern-Qantas & Air China-Air New Zealand JVs show renewed interest from Chinese airlines

26-Nov-2014 12:37 PM

The spectacular growth of China Southern Airlines in Australia and New Zealand came with the tradeoff that Air China and China Eastern lost interest in Australia and New Zealand, seeing China Southern's flood of capacity drastically hurting yields and making expansion too difficult. This is now changing, first with China's regulator signalling China Southern needs to slow its international expansion, and more recently with two proposed joint-ventures, one between China Eastern and Qantas and the other between Air China and Air New Zealand. The Chinese carriers are taking the view a deep partnership can help them where size is not to their advantage.

The two joint ventures are distinctly different. China Eastern will likely gain more from its partnership with Qantas while Air New Zealand can potentially gain more by having the JV mend its frayed relationship with Air China. Further, China Eastern's more ideally located Shanghai hub gives greater potential growth from the JV whereas Air China will be challenged with its northern Beijing hub.

Asian aircraft lessor numbers grow as investors begin to recognise benefits and growth demand

22-Nov-2014 9:16 PM

There has been considerable interest in 2014 from the higher profile of aircraft lessors based in Asia, and specifically the emerging sector in China. A number of existing Chinese leasing companies are are being joined by new ones, including some affiliated with airlines, such as China Eastern and Spring Airlines. The move by Hong Kong billionaire Li Ka-shing and his Cheung Kong Holdings to enter the leasing sector has further stimulated interest for consumers looking to invest outside the traditional, and waning, property area.

Airbus firm orders from all lessors for the first ten months of 2014 have outpaced those of Boeing, but so far Asian lessor orders are about in line with 2012 levels at Airbus. Boeing meanwhile is accruing an increase in direct, disclosed orders from Asian lessors. Asia holds the single largest order backlog of commercial aircraft, with 3,517 according to CAPA's Fleet Database.

Opportunities within Asia could be mixed, although airline behaviour is changing: Chinese carriers are giving preference to Chinese lessors while Korean Air has only 17% of its fleet leased compared to 39% at Singapore Airlines and 67% at Qantas.

China Eastern Airlines: rebranding, strategic revival, new 777 deliveries and an investor hunt

23-Sep-2014 12:26 PM

It is not often that a lick of paint is so momentous. When China Eastern Airlines – China’s second largest carrier and the world’s eighth largest by seats – unveiled its new livery, it marked an important step. The details of the branding are the minor part; the major fact is that in China’s slow-moving legacy environment of national carriers where the state has a heavy hand, China Eastern was able to implement change. Competitors, still wearing their old coats, are jealous. This is China Eastern's first re-branding since its establishment over 20 years ago, and the first major one among China's airlines.

The branding itself is the visible signal of strategic change. A more material one is due to arrive with the 24-Sep-2014 delivery of the first of China Eastern’s 20 777s for long-haul growth, mainly to North America. China Eastern’s lagging performance has made its Shanghai hub vulnerable, albeit one of China's most important. Further, China Eastern is the first – and so far only – state carrier to launch an LCC. Even more disruptive, in its low key way, is China Eastern’s discussion of finding a strategic investor.

The strategy may be relatively fresh but it needs time (perhaps years) to incubate. China Eastern has some way to go before becoming fully commercial; for example, its 1H2014 financial results included domestic load factor gains at the expense of yield - while operating profit was boosted by state subsidies.

Air China will continue its double digit growth despite 1H2014’s weaker yields and load factor

4-Sep-2014 12:53 PM

Air China’s yields and load factors decreased in almost every market in 1H2014, but its operating result improved as costs, mainly fuel, grew more slowly than revenue increases. Total revenue was also helped by increased government subsidies while the net profit was dragged down by foreign exchange losses.

Higher fuel prices could quickly have soured the lower yields and load factor. Other airlines might not walk this fine line for fear of volatility, but Air China has strategic goals it needs to meet for the government, including aircraft induction that produces growth. Air China will continue growing with a planned 10% increase in the domestic market and 15-16% in the international market.

Air China’s international growth has been strong in North America, and in the slower northern winter 2014/2015 season Air China will selectively reduce frequencies, one of the first series of cuts in the over-capacity Trans-Pacific market.

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