Commencing operations in 2009, Joy Air is jointly owned by China Eastern Airline and the AVIC group. Using a small fleet of regional MA-60 aircraft and based at Xi’an Xianyang International Airport, Joy Air is focused on serving north-western China.
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The more cynical of China watchers write off the country's future domestic network, believing high-speed rail (HSR) will obliterate the need for air travel. While HSR does pose a threat on short sectors, these comprise the minority in China. The larger competitive worry, rather than annihilation, is regional flying. Carriers have shied away from regional operations, but China Eastern's part-owned subsidiary Joy Air has signed an agreement with the Hefei Municipal Government to establish Hefei Airlines by the end of 2013, based in its namesake city in central China.
Hefei will be at the convergence of HSR lines, but there will be opportunities to connect the city with nearby cities that do not overlap with HSR. Indeed, the preliminary plan calls for the carrier to operate 50-70 routes with 30 aircraft by 2020.
While perhaps achievable, its success will be tied with the region's, which has some of China's poorest but also fastest-growing provinces, as manufacturing moves inland away from the expensive coastal region. Hefei has attracted Unilever while Zhengzhou, 450km away, is home to a Foxconn plant that reportedly produces 70% of the world's iPhones.
Tibet Airlines, Tibet’s first airline, on 20-Jun-2011 received its public air carrier's licence from CAAC, after receiving approval from the aviation authority in Mar-2010. Tibet Airlines will be the first and only airline based in Lhasa when it launches operations next month and will benefit from the booming Tibet market.
China Air Show: China welcomes C919 to the world; manufacturers reaffirm committment to China market
China International Aviation & Aerospace Exhibition (Airshow China) was held on 16/21-Nov-2010 in Zhuhai and showcased the rise of China’s civil aircraft manufacturer and also the growing importance of the Chinese civil aviation industry to international manufacturers and suppliers. A breakthrough for the event was rising domestic participation with Commercial Aircraft Corporation of China (COMAC) having a stand at Airshow for the first time. COMAC's C919 was the big news of the Airshow, racking up orders for 100 aircraft.
The CAAC has come out with an extraordinary prediction this month: Chinese airlines will nearly double their fleet size to as many as 5,000 aircraft by 2015. In the shadows of a major international air show on home soil, one might expect some bullish sentiment from the hosts. But the comment, by CAAC Head Li Jiaxiang, that the nation's domestic carriers will have an expected combined fleet of 4,800-5,000 aircraft in just five years (from 2,600 at present) is a breathtaking assessment. Even if it's only 50% accurate, aircraft manufacturers big and small are in for a bonanza.
China’s fragmented airline industry is undergoing a shakeup. Merger and acquisition activity is intense – probably more so than any other aviation market in the world. In the space of a few short years, the majority of China’s second tier airlines have, at least partially, become owned or controlled by one of the "Big Three" carriers and/or HNA Group, as consolidation accelerates in China. In this report, CAPA reviews what’s fuelling the feeding frenzy and who the targets are.
China’s second-tier carriers are hard at work at present, rapidly expanding their domestic and (in some cases) international route networks. However, the vast majority of these airlines are now doing so under the control of the "Big Three" carriers and/or HNA Group, as consolidation accelerates in China. As such, China’s airline evolution is at a very interesting stage. Where previously the major airlines: 1) established considerable branch carrier networks to serve diverse geographic areas in China; and 2) eliminated brands of the acquired airlines, they now appear to be looking more strategically at segmenting the market, retaining the second-tier carrier brands, particularly those focused on tourism/leisure markets.