Taiwan’s Taoyuan International Airport Co, operator of Taipei Taoyuan International Airport, stated it has scrapped a proposal to construct a LCC terminal after observing the conditions in Singapore and Malaysia. According to a CNA report, the company first proposed converting an existing idle building at the airport into a LCCT last year. The company added it will use existing space at Taipei Taoyuan Airport’s T1 to accommodate LCCs if such needs arise in the future. The airport estimates LCCs will transport around one million passengers to Taiwan this year, up from the 930,000 LCC passengers in 2012.
Taoyuan International Airport Co scraps plans for LCCT
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Since a 2016 government change in Taiwan, China Airlines – long a sleepy government airline – has shown greater interest in growth. However, Europe is not a strong market for the airline. In Paris there is opportunity to work with fellow SkyTeam member Air France. This potentially makes Paris less costly for China Airlines than its planned resumption of service to London.
China Airlines is once again planning a narrowbody order to replace and supplement its existing 737-800 fleet. The order will reflect how optimistic China Airlines is about the turbulent cross-strait market.
The A320neo is favoured, and it is unclear whether an order might also mean that China Airlines exercises its six options for the A350. China Airlines has received five of a 2008 order for 14 A350s. The correlation between Airbus aircraft orders and French traffic rights is sensitive, but this is hardly the first example. Taiwan and the US, home to Boeing, have an open skies agreement.
China Airlines deploys A350 to grow in North America but risks overexpansion in Europe
China Airlines has sat out on long haul growth over the last decade and is now looking to reinvigorate its position, making wins against local rival EVA Air, which has quietly but spectacularly grown. EVA, however, now faces uncertainty with new owners that may favour conservative expansion, which could benefit China Airlines. But China Airlines remains in a difficult position, one where it is under too much influence from its government owners, has an undefined vision, and lacks having aircraft on order.
China Airlines has received four A350s, with another 10 due by the end of 2018. China Airlines will have twice as many A350 flights to North America as to Europe – the market it originally envisaged for the A350.
European A350 growth could expand as China Airlines plans to resume London in Jun-2017. China Airlines could also consider a new service to Paris. Europe risks long term overcapacity, however, and this is not a strong market for Taiwan. Growth options are limited to North America, where China Airlines needs longer range aircraft but does not have any more 777-300ERs on order.