Tianjin Airport

China-Japan traffic bottoms out but faces massive challenge; Spring Airlines to launch new routes

Several political actions sparked extreme anti-Japan sentiment in Sep-2012 that saw the air traffic market between the two nations lose nine years of growth as 31%, or 175,000 monthly seats, were taken out of the market. The situation lasted longer and more profoundly than airlines initially expected as they planned for about half of the lost market to rebound by the end of 2012.

Instead, that may not occur until the middle of 2013 at the earliest. Since capacity fell in Nov-2012, the market has regained 1ppt of the lost traffic, indicating a likely bottoming out. Yet further effects have expanded beyond mainland China, slightly impacting Hong Kong-Japan traffic as well.

So it is all the more significant that China's only LCC, Spring Airlines, is planning a fairly aggressive growth campaign for mid-2013 between China and Japan, opening new cities on either end, including the under-served secondary cities that have much growth to be unlocked.

China's HNA Group, of Hainan Airlines, invests in Africa World Airlines, third new start-up in Ghana

Chinese aviation is entering a new phase with the country's HNA Group, which includes Hainan Airlines and Hong Kong Airlines, making the first notable investment in a foreign passenger airline. HNA is taking a stake in Africa World Airlines, a start-up in Ghana that intends to launch low-cost operations this year, joining a crowded field in the West African nation that includes Starbow Airlines and Sir Stelios-backed FastJet, currently operating as Fly540, and incumbent Antrak Air.

Management at Africa World Airlines will be seconded from HNA carriers. HNA takes a long-term view towards investments, which with airlines can sometimes produce inefficiencies, as HNA seeks to build scale ahead of profitability. Africa World intends to start domestic operations modestly, with two Embraer ERJ145LRs, and then expand regionally, across Africa and beyond.

The plan is long term, and therefore consistent with HNA strategy, even if immediate short-term gains are not achieved.

As AirAsia X switches from Tianjin to Beijing, Asian alternative airports face uncertain future

AirAsia X has received final clearance to move its five weekly flights from Tianjin to more centrally located Beijing Capital International Airport, only 30km from the city compared to 80km at Tianjin. The move from Tianjin, considered an alternative airport to Beijing Capital, leaves Scoot as the sole foreign LCC at Tianjin. When the move is made on 22-Jun-2012, AirAsia X will join fellow low-cost, long-haul competitor Jetstar at Beijing.

The move raises the matter if it is in a carrier's financial interest to serve a cheaper yet less convenient airport but possibly forgo revenue by alienating some passengers and reducing options for connectivity, which is increasingly becoming common as carriers pursue hybrid paths. Demand in the region is still relatively strong, eliminating the need to incentivise the market by passing on savings from alternative airports. What the region's LCCs do want are low-cost terminals, which Tokyo Narita and Melbourne Tullamarine will soon offer, while Kuala Lumpur and Singapore Changi will construct new ones.

Beijing to overtake London as world’s largest aviation hub. Massive new airport planned

Congested Beijing is building fresh airport capacity that will see it become the world's largest aviation hub, leaving London - currently the world's busiest system of airports - and even ambitious Dubai in its wake. Beijing's new airport at Daxing south of the city could have up to nine runways and ultimate capacity to handle around 370,000 passengers per day, or a staggering 135 million passengers p/a. This would increase capacity at Beijing area airports to around 220 million p/a - almost a quarter of a billion passengers.

More success for the E-190 in China but still no local production

Embraer continues to be successful in selling the E-190 in China over the indigenous ARJ21 regional jet, but it continues to fail in repeated attempts to open a Chinese E-190 assembly line.

Airlines: surviving in a changing world. CAPA's Hottest Airlines to Watch in 2011

As the international airline industry evolves from a heavily protected, government-run activity into a commercial hybrid, individual airlines are confronted by massive challenges, each of them unique to the company concerned. At the same time, the industry overall remains constantly at risk from any number of external threats.