Air China turns attention to international markets, but its profits are regional and domestic

Air China's hub at Beijing Capital is effectively at capacity for movements between 07:00 and midnight. Consequently the carrier is increasingly using its existing slots to launch international services that support its positioning as China's international flag airline; this also allows Air China to grow revenue, which in 2012 surpassed RMB100 billion (USD16 billion) for the first time. But these services, aside from Taiwan, offer only lower yields and faint glimmers of profitability - unlike the domestic heartland operations.

With Air China's domestic RPKs growing only 0.5% in 2012, the carrier is seeking to assure the market it has domestic growth opportunities left by expanding its hubs at Chengdu and Shanghai, although the latter is also constrained by slots. The Air China Group also has a portfolio of domestic carriers, including Shenzhen Airlines (the country's sixth largest), Shandong Airlines and Tibet Airlines. They account for about a third of the group's domestic revenue and most traffic growth.