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952 total articles
51 total articles
Sichuan Airlines is due to take delivery of an Airbus A320 family aircraft on 22-May-2015, giving the Chengdu-based carrier 100 aircraft. Sichuan becomes the seventh airline in China to have a fleet of 100 or more aircraft. Globally Sichuan will be the world's 50th largest airline by fleet size. Sichuan intends to take another 100 aircraft over the next decade.
Sichuan's hinterland is mostly in China's west, from Xi'an and Kunming to Chengdu and Chonqging, although it also has a large presence along China's eastern seaboard. Sichuan carried just under 20 million passengers in 2014, almost all domestic.International flying, which accounts for 9% of Sichuan's seats in May-2015, is mostly around Northeast and Southeast Asia but limited long-haul links extend to Australia, Moscow and Vancouver.
All of China's Big Three airlines – Air China, China Eastern and China Southern – have a direct or indirect stake in Sichuan Airlines, creating competing interests in China's booming west.
United Airlines is bracing for a unit revenue decline during 2Q2015 that could reach the mid single digits as internal and external factors are coalescing to drag down the company’s performance in that metric.
But United maintains that some drivers of the decline are both earnings and margin accretive, and stresses it ultimately makes decisions to maximise margins and return on invested capital (ROIC). To demonstrate that philosophy it has undertaken several fleet changes that include deploying 777-200 onto high frequency domestic hub-to-hub routes.
To mitigate some of the pressure it is feeling from the strengthening USD and competitive capacity actions, United has shaved a half-point off of its projected 2015 capacity growth and now expects a 1% to 2% expansion for the year as it works to shore up margins and sustain profitability.
'Luck' may be in its name but Chinese carrier Lucky Air is not leaving its future entirely to fate. The Kunming-based carrier is expected to transition to the low-cost model, following the Chinese government's rapid rise in LCC interest.
With a southwestern base and route network concentrated on secondary cities, fare premiums are hard to attain. Lucky Air hopes to differentiate itself in China's often dated and monotonous airline branding, and so has introduced a new logo, becoming the latest HNA-affiliated airline to re-brand.
Lucky Air is one of two Chinese carriers granted international traffic rights at Kunming and there is the prospect for further international growth, mostly to South and Southeast Asia. If it is to be serious about addressing costs, Lucky Air will need to look at its fleet, a mix of 737s and A320s. Its 26 aircraft fleet could grow to 70 by 2020, including possibly widebody aircraft within three years, the carrier announced at the Routes Asia forum in Kunming.
Kunming in southwest China has been the country's traditional gateway to Southeast Asia, and flights to Southeast Asia account for 60% of Kunming's international seats, making Kunming an exception to most other Chinese airports mostly with larger international exposure to Northeast Asia. Kunming hopes to use its Southeast Asian network to be a transfer hub from North America and Europe, and in 2014 its regional government established a RMB200 million (USD32 million) fund for new international routes.
Such traffic, while plausible in the long-term, will be the icing on the cake. 93% of the airport's seats in Mar-2015 are domestic and Kunming carried 32m passengers in 2014. International will be a small but growing part of Kunming's story, with sixth-freedom Europe/North America-Southeast Asia traffic even smaller. Kunming's geography disadvantages it in having long-haul flights to North America.
While geography is more favourable to Europe, competition from Southeast Asian and Gulf carriers is strong and Kunming will be up against mighty networks. Point-to-point traffic volumes are not large enough to contemplate filler connecting traffic and Kunming cannot rely on connecting traffic the way Dubai can.
The China-US market continues to grow, as expected, but the segment is showing acceleration in the way that growth is occurring. China Eastern plans to launch Nanjing-Los Angeles service, its first trans-Pacific route from a city outside its Shanghai hub. Hainan will launch a new Beijing-San Jose service, consistent with its secondary city focus, but thicken Beijing-Boston and Beijing-Seattle services with flights to those US cities from Shanghai. Hainan Airlines becomes the first (by two weeks) Chinese carrier to serve a US point from multiple Chinese cities. US airlines already serve Chinese points from multiple US cities.
And Delta Air Lines, normally conservative with long-haul growth, has brought forward a Los Angeles-Shanghai service in its five-year plan to a Jul-2015 start date. Not only is Delta accelerating growth, it is doing so on the most competitive US-China route; it becomes the fourth airline on the city-pair after America, China Eastern and United. Delta attributes its growth to the visa liberalisation between China and the US, which Delta says was a surprise.
Xiamen Airlines will be China's sixth airline to fly long-haul when it commences Xiamen-Amsterdam service as early as Jul-2015 using its new fleet of 787 Dreamliners. By the end of 2015, Xiamen Airlines expects to launch a four times weekly Xiamen-Sydney service. There could be later expansion to the US, but the longer flight length will be challenging.
Meanwhile, Sichuan Airlines is China's other new airline to fly long-haul. Services to Vancouver, Melbourne and Sydney will be followed by four times a week charter service Chengdu-Moscow with an A330.
Long-haul is a much smaller component of traffic than domestic flights for China's airlines, and this is especially true at secondary airlines like Xiamen and Sichuan, which have limited long-haul plans. No other Chinese airline already has or publicly intends to have widebody aircraft, but another long-haul Chinese carrier cannot be far away.