- CAPA Analysis
- Schedule Analysis
- Route Maps
- Fast Fact Report
- Airline Status
- IATA Code
- ICAO Code
- Date established
- Main hub
- Fuzhou Changle International Airport
- Business model
- Full Service Carrier
- Airline Group
- Part of Hainan Airlines Group (HNA)
- Frequent Flyer Programme
- Fortune Wings Club
- Codeshare Partners
- Tianjin Airlines
Fuzhou Airlines is a full service carrier based at Fuzhou Airport. The carrier is a subsidiary of Hainan Airlines. Fuzhou Airlines operates domestic services throughout the country. The carrier also has plans to expand to offer international services in the future. Fuzhou Airlines operates a fleet of Boeing 737-800 aircraft.
Location of Fuzhou Airlines main hub (Fuzhou Changle International Airport)
4 total articles
One year ago in Nov-2013 China announced the start of a new framework to cultivate new airlines and specifically LCCs. The objectives were to re-stimulate market growth by introducing new types of airlines into the heavy state-owned, and until-now inefficient, airline secotor. A further objective was to bring the humming aviation scene on China's east to western areas that are centres of economic policy drives.
As part of this, a de facto moratorium on new airlines was formally lifted. This has led to a rush of start-up activity. The number of new passenger airlines that have recently launched, plan to or are in formation has reached 19, according to CAPA's compilation based on public statements. But only two airlines – 9 Air/Jiu Yuan and an unnamed carrier in Zhengzhou – are so far planning to operate as LCCs. This reflects hesitation to innovate but also a policy framework that is not yet entirely conducive to LCCs.
There is a better turnout of airlines forming in China's west as well as previously ignored northeast corridor. But there is still a heavy eastern bent to the start-ups, with some planning to launch passenger service in first tier cities like Guangzhou, Hangzhou, Shanghai and Shenzhen.
China in the next year could see about a 50% increase in its number of passenger airlines. There are 15 known airlines that either plan to launch or have launched in recent months. This rapid growth comes as China loosens restrictions on new carriers that have been in place since mid last decade. These new carriers join about 10 airlines launching in other parts of Asia in 2014. Whereas those 10 airlines outside of China are exclusively low-cost carriers, almost all of China's new carriers will be full-service – at least initially.
There is a wave of LCC interest in China accompanied by some regulatory liberalisation, such as on minimum fare pricing. Yet there are more policies that need to be loosened or streamlined, and then upheld in practice. While there is large growth in the number of airlines, their size will be small. Recently-launched Loong Airlines has about 12,000 weekly domestic seats compared to China Southern's 1.7 million. But there will be impacts in the specific markets these new airlines operate in. Their ultimate, long-term potential with a new business model or one free of legacy weight is the larger worry for the country's incumbents, including the behemoths, which are among the world's 10 largest airlines. China's major airlines have been publicly quiet on this market re-ordering but are closely watching it, and planning their own response.
Eleven airlines during the past year have announced their intention to launch in China's domestic market. Increasingly, they are being approved (three so far) by regulator CAAC after a few years of a policy that technically forbade new entrants - although there were exceptions, allowing some new airlines to launch.
The new airlines fulfil the objective of creating growth and inviting private capital into the aviation industry as the state grows weary of its large investments across numerous sectors. Space will have to be created for these new airlines in China's ecosystem where 79% of seats are flown by state-owned carriers or their subsidiaries and affiliates. A full 94% of capacity is flown by airlines part of either the Big 3 – Air China, China Eastern or China Southern – or HNA Group. That leaves just 6% of capacity for independent airlines. So the incumbents are not facing an immediate threat, especially as the new airlines are not being based in first-tier cities.
But the additional airlines come as China already has an over-supply of airlines, despite the enormous potential for growth. The fragmentation means few can gain scale and synergies. That situation could be exacerbated by further airline approvals - yet liberalisation is undoubtedly where the system needs to head, creating a dilemma for the CAAC.
China typically runs its carriers by giving them a base they can develop into a hub where they account for the majority of traffic. Further loosening of that principle will occur in the private sector, where HNA and the Fuzhou City Government will form a joint-venture to launch Fuzhou Airlines in its namesake city, where privately-owned Xiamen Airlines currently represents 50% of capacity.
The launch comes as Xiamen Airlines, arguably the world's most consistently profitable airline, worries if it is breaking the paramount rule of business in China: never be so successful so as to invite a covetous state. In the last two years Xiamen Airlines has posted double-digit operating margins. The creation of Fuzhou Airlines, along China's more developed coastal area, is surprising given recent start-ups have tended to be in more developing regions.