China Eastern Airlines
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- 2550 Hongqiao Road, Hongqiao International Airport
China (People's Republic of)
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- Shanghai Pudong Airport
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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
2,570 total articles
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North Asia will gain three new 777-300ER operators in 2014, boosting the number of 777-300ER operators in North Asia to nine. Deliveries in 2014 to China Airlines, China Eastern and China Southern will, for the first time, see the majority of North Asia's long-haul operators use the 777-300ER, mainly to North America but also to Europe. While the aircraft may be used similarly, their genesis, configurations and implications are different. China Airlines will catch up to EVA Air and replace 747-400s with the 777-300ER, allowing for moderate growth.
China Eastern will replace A340-600s with 777-300ERs and then conduct large long-haul growth, which it originally intended to do with now-cancelled 787s. China Southern will use its 777-300ERs to fill a capacity white spot in its fleet between A330/787 and the A380, evidenced by using the 777-300ER to open a new service to New York JFK.
China Southern will introduce the lowest business configuration yet on the 777-300ER in North Asia with only 34 seats; the average prior to its configuration was 50. This is in contrast to China Eastern, whose 56 business class seats – the second-largest density – come with the tradeoff of fewer economy seats than at China Southern.
North Asia is home to many of the world's most visible airlines based on size (China Southern), market capitalisation (Air China), profitability (Japan Airlines) and prestige (Cathay Pacific). The region's airlines face an encouraging 2014, and can certainly fare much better than European peers. The singular uniting theme for long-haul North Asian carriers is the strong market to North America, where corporate and premium travel is up while competitors are fewer than to Europe, for example.
Elsewhere the characterisation is that of nuances. Currency exchange rates are sharply impacting Japan, where the yen is down about 17%, while helping Chinese carriers with the appreciating yuan. Regional tensions continue to plague bilateral markets like Japan-Korea and China-Japan. There is growing sensitivity about unprofitable short-haul routes: Asiana will use a new single-class configuration while China Airlines and TransAsia expect to have new LCCs, adding more dual-brand strategies to the region, which otherwise lacks the vibrant LCC market of Southeast Asia – or Europe. Except in Japan, liberalisation has occurred more slowly in North Asia.
2014 will be a reflective year for liberalisation in the region. Jetstar Hong Kong continues to press for a licence while AirAsia is exploring Korea for new subsidiary options. Foreigners fear Taiwan's newfound pro-LCC attitude is only for LCCs established with an existing Taiwanese airline. And China, potentially the world's largest market for possible airline investments, shows no signs of receptiveness to foreign capital, which could be a game-changer on the global stage, although new airlines are being ushered in as part of government-led reforms. The wall is starting to show some cracks.
North Asia's airlines add capacity in 2014 as underdogs play catch up and short haul focus increases
All of North Asia's main 13 airlines except Korean Air will operate more flights in the first quarter of 2014 than in the year prior. But this has different impacts and not all airlines will grow seat and ASK capacity. On average 1Q2014 seats will be up 3.7% and ASKs 3.4% complementing 4.5% growth in frequencies. For Cathay Pacific and Japan Airlines, more frequencies come at the expense of ASKs as aircraft are down-gauged or see lower configurations. For others, frequency growth faster than seat/ASK growth will allow them to tap new short-haul markets.
Hong Kong Airlines, China Southern, EVA Air and TransAsia are due to be the region's largest-growth carriers. Carriers in Greater China are introducing seat and ASK growth above frequency growth due to limited slots and the nature of trunk routes. China Airlines and EVA Air have a similar growth profile, but in other markets the two big carriers (ANA and JAL in Japan, Asiana and Korean Air in Korea) differ.
The uniting theme is carriers looking to close the gap while incumbents seek sustainability. 1Q2014 is a relatively tame start to the year, which will see expansion from ANA at Haneda, Asiana take A380s and launch more long-haul flying, Skymark become Japan's third long-haul airline and Cathay put in 6.3% ASK growth after two quiet years.
China Eastern Airlines plans to convert wholly-owned subsidiary China United Airlines into a low-cost carrier (LCC), making it the first major carrier to partake in China's new aviation agenda that encourages LCCs. China sees LCCs – new, converted, private or affiliated with a state carrier – as jump-starting growth, expanding air links in the economically young western region and fighting against inefficiency and wastefulness.
Beijing-based China United is ideal for conversion to a LCC given its point-to-point focus, short routes, operation out of Beijing's second airport at Nanyuan, and small scale that limits potential for corporate travel. China Eastern is larger in Beijing but China United serves more secondary destinations that are potentially more suitable to LCC service.
There is already extensive cooperation between China Eastern and China United, with China Eastern codesharing on nearly every China United flight. There are opportunities for continued cooperation but the two will have to define what this dual-brand strategy entails and how much infrastructure – particularly IT – is in place to support it.
Cathay Pacific's order for 21 777-9X aircraft will give the carrier a lead in fleet re-generation in Asia, a position it badly needs to occupy after falling behind the curve in replacing ageing A340-300s and 747-400s. Cathay has acutely felt the impact, but now becomes yet another carrier to order the 777X alongside the A350-1000, showing airlines see segmentation between the types. For Cathay, that means using the 777X on its strongest long-haul routes – from both a passenger and freight position – such as to New York, London and Los Angeles. The 777X order gives Cathay greater future lift than the A350, which had exclusively comprised Cathay's delivery stream after 2015.
Cathay is the largest 777-300ER customer in Asia, and second in the world only to Emirates. 41% of the world's 777-300ERs are in Asia-Pacific, which is home to 30% of 777-300ERs on order. Other large customers in the region include Singapore Airlines, Korean Air, All Nippon Airways and EVA Air. Cathay's 777X order starts what will surely be a healthy sales effort in the region as Asian carriers like to keep their fleet young. Already ANA is in advanced 777X evaluation stages. EVA has flagged future 777-300ER orders while later evaluating the 777X.
Partnerships and KLM Royal Dutch Airlines are intertwined: KLM and Northwest Airlines first joined forces in 1989 when KLM acquired a 20% holding in the US carrier, then the two pioneered the industry's first modern joint venture in 1997, subsequently been imitated not just by trans-Atlantic peers but by airlines across the world. Partnerships today are even more prevalent and critical for KLM. The trans-Atlantic deal has expanded and KLM has a JV with Kenya Airways, among others.
But it is Asia where KLM's breadth of partnerships is most evident and also where there are expansion opportunities, as KLM COO and Deputy CEO Pieter Elbers told CAPA at its recent World Aviation Summit in Amsterdam.
The launch of European flights by China's Sichuan and Xiamen Airlines could see KLM form a deeper partnership, adding to its existing relationships with China Eastern and JV partner China Southern. KLM's historical relationship with Malaysia Airlines has continued despite MAS joining oneworld in 2013, and KLM has also added one-time foe Etihad Airways as a partner. KLM would like a partner in Japan, its second-largest Asian market, and ideally hitch on Air France's relationship with JAL. Mr Elbers describes a stable if limited relationship with SkyTeam heavyweight Korean Air. The growth in partnerships comes as Asia widens its lead over North America as KLM's largest long-haul market.
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