Air China expects growth in 2010 but affected by congestion and high-speed rail

Air China Chairman, Kong Dong, stated it expects strong passenger growth in 2010 but added that congestion at the sole airport in Beijing, Beijing Capital International Airport, and strong competition from China's growing high-speed railway network on domestic routes, could affect the carrier's operations in the next few years (Bloomberg, 28-Apr-2010). The airline aims to expand its international routes in the long run to help offset growing competition in the domestic market, adding that Air China should be the less affected than China Eastern Airlines and China Southern Airlines, as 30% to 40% of its passenger revenue comes from international routes, a higher proportion than its domestic competitors. Meanwhile, Mr Kong stated the carrier is "considering approaching officials at the Ministry of Railways" to discuss how high-speed railway operators and airlines can work together to reduce competition in the domestic market.

Air China: "Beijing Capital Airport is expected to handle 72 million-75 million passengers this year, which is close to its designed handling capacity of 80 million, so there is a need to build another airport in Beijing ... In the past, air service was virtually irreplaceable for speedy and efficient travel, but the development of high-speed railways poses a challenge to us nowadays," Kong Dong, Chairman. Source: Bloomberg, 28-Apr-2010.