China United Airlines
- Airport Investment Details
- CAPA Analysis
- Schedule Analysis
- Cargo Analysis
- Route Maps
- Fast Fact Report
- IATA Code
- ICAO Code
- Corporate Address
- Yuxiangyuan, Nanyuan Airport, NO.6 Jingbei East Road, Fengtai District, Beijing
- Main hub
- Beijing Nanyuan Airport
- Business model
- Low Cost Carrier
- Airline Group
- Part of China Eastern Air Holding Company
- Codeshare Partners
- China Eastern Airlines
China United Airlines is a domestic low-cost carrier based at Beijing Nanyuan Airport. The carrier converted its business model from full-service to LCC after parent company China Eastern Airlines announced the move on 02-Jul-2014.
Location of China United Airlines main hub (Beijing Nanyuan Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider China United Airlines fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
193 total articles
11 total articles
Spring Airlines & Juneyao Airlines enjoy post-IPO success while 9 Air struggles as a new Chinese LCC
For much of their existence, China's privately-owned Spring and Juneyao Airlines were in something of regulatory limbo, neither shunned nor blessed. But China in late 2013 actively began to promote LCC Spring as a model of efficiency and declared that China needed more LCCs and cost-efficient carriers; since then its short term prospects have been brighter. Spring and Juneyao were finally allowed to go public just as China's stock market boomed. Full service airlines have also benefitted from the interest in aviation, and China Eastern Airlines issued new shares.
Stock prices soaring on bullish growth prospects can disguise another reality of the Chinese aviation market: it can be heavily protectionist, as seen with 9 Air, China's first all-new LCC since policy changes. 9 Air launched in Jan-2015 after repeated delays but has been unable to secure slots at its home base of Guangzhou, despite assurances from the previous local government.
China Eastern Airlines is taking the lead amongst the country's state-owned carriers in developing an LCC presence. This follows Beijing's embrace and active promotion of LCCs, which it sees as spearheading new growth and being in line with the country's increasing austerity and efficiency targets. China Eastern has converted its subsidiary China United Airlines, based at the smaller Beijing airport of Nanyuan.
China United only flies domestically, and mostly to secondary cities, but in Jan-2015 applied to regulator CAAC to expand its business licence to international services. China United is expected to be given the right to fly internationally from its Beijing home but also Shenzhen.
Shenzhen's international development has been stunted – possibly due to lobbying from Air China partner Cathay Pacific, which feeds on the Shenzhen market – and local carrier Shenzhen Airlines has a minimal international presence. Shenzhen Airlines is majority owned by Air China, meaning China United's international expansion could eventually challenge the Air China group at multiple levels. With time there will also be an impact to the Hong Kong market, although crossing the border is still far from seamless.
Chinese start-up 9 Air/Jiu Yuan Airlines commenced scheduled service on 15-Jan-2015 in the domestic Chinese market. Perhaps fittingly, 9 Air will use the IATA code AQ, formerly with “Aloha Airlines”, whose name is a Hawaiian salutation. 9 Air will be the first to greet a new Chinese environment: the airline is the first low-cost carrier to launch from scratch under China’s policy reforms.
That distinguishing label comes with its burdens. 9 Air’s launch was repeatedly delayed and a soft launch with charter-only service was on the short 387km Guangzhou-Zhanjiang route. Nonetheless, China Southern – also based in Guangzhou – cut prices on that service.
9 Air’s launch on a single Guangzhou-Wenzhou-Harbin routing keeps it out of the thick of competition, but it will inevitably take a higher profile as it receives the first of 50 737s it directly ordered.
What is exciting about the next act of Chinese aviation is that a new script is now emerging.
China’s ascent from a single national airline in the 1980s to dozens of airlines in what is today the world’s second-largest market has occurred over many acts, but to date they have largely been highly choreographed.
There were surprises as some characters assumed roles larger than they were written and as some unscripted characters appeared, but mostly the state has applied a rubric of growing the market while ensuring a predominant role for the three protagonists: Air China, China Eastern and China Southern.
This is changing now as China looks to generate higher growth rates: home grown LCCs are to be permitted formally for the first time. Highly successful models like Spring Airlines have led the way; now others will have the opportunity to follow the precedent.
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.
When CAAC vice-administrator Xia Xinghua proclaimed “We urgently need to develop LCCs” at a public forum in Beijing on 5-Nov-2013, it became clear that fundamental changes are on the way for low-cost carriers and the overall aviation market in China.
Within the overriding goal of ensuring stability for the Big Three Chinese flag carriers, it will not be a simple process. One thing is very clear however: the CAAC is serious about introducing significant change in the sector. This includes approving new carriers, reforming airport charges, introducing LCC terminals, changing aircraft acquisition processes and taxes, not requiring approval for new routes, and the ever-topical matter of airspace reform (albeit largely outside its control).
The forthright move is part of a wider commercial agenda of China's new leadership, which meets again on 9-Nov-2013, seeking to find the right formulas to allow greater play of market forces, while maintaining appropriate regulatory backstops. Purists will see this as being half pregnant. For example, in Oct-2013 the CAAC abolished minimum pricing requirements in the domestic market, an important step for LCCs; but price caps remain as a consumer protection measure – despite total price freedom being integral to LCC structures.
But China has repeatedly shown the ingenuity to evolve tailored solutions that fit the very different environment in this enormously complex country. There will be a "China solution" and it will allow more LCC operations – but there will be differences….