China Southern: Joins world top 10, expands globally with alliance membership

Image: Mr Liu Shao Yong speaks at the ceremony to welcome China Southern into the SkyTeam alliance
Mr. Liu Shao Yong, chairman, China Southern Airlines, speaks at the ceremony to welcome China Southern into the SkyTeam alliance.

Last year China Southern became the first Chinese airline to transport over 50 million people which makes it one of the world’s top 10 airlines in terms of passengers flown. With a fleet of over 300 aircraft (a healthy balance between Airbus and Boeing models) the airline is the most recent addition to the global Skyteam alliance, having become its 11th full member on 15 November last year.

Chart: China Southern traffic 1998-2007
Source: China Southern Airlines

In 2005 China Southern airlines acquired the airline operations and related assets of China Northern Airlines and Xinjiang Airlines which explains the surge in passenger numbers that year. As a result of the rapid growth the airline reported a significant loss in 2005 before reporting a modest profit in 2006.

The growth in passenger numbers has gone hand-in-hand with a growth in passenger load factor which has climbed from just over 60% in 2000 to 65% in 2002, 70% in 2005 and last year reached an all-time high of 74.5%.

Chart: China Southern seasonality
Source: China Southern Airlines

Map: China

Demand peaks each year in August and passenger numbers overall in 2007 were up 15.6% versus 2006. In the first two months of this year traffic is again maintaining double-digit growth.

Guangzhou, Beijing: main hubs

Guangzhou is one of five major airports serving the Pearl River Delta region on China’s southern coast, the others being Hong Kong, Macau, Shenzhen and Zhuhai. One in every six China Southern departures is from Guangzhou, which makes it almost twice as busy as any other airport in the airline’s network.

Chart: China Southern’s top 12 Chinese airports
Source: OAG Max Online for w/c 7 April 2008

China Southern currently serves 101 airports in mainland China and 51 international destinations.

Image: China southern adHong Kong and Seoul main international markets

Hong Kong is served from 12 different Chinese airports while Seoul’s Incheon airport is served from 10 different airports. These two destinations alone account for around 40% of China Southern’s international traffic capacity with Japanese destinations Tokyo Narita and Osaka Kansai accounting for a further 10% of international capacity.

The only destinations currently served in Europe are Amsterdam (daily from Beijing) and Paris CDG (four times weekly from Guangzhou) while Los Angeles (five times weekly from Guangzhou) is the only destination served in North America.

In the first two months of 2008 Hong Kong and international passengers made up just over 10% of the airline’s passenger numbers. While domestic traffic growth was 14%, international traffic grew by 20%. In terms of ASKs international routes make up just under 18% of the airline’s production. However, unlike in other parts of the world load factors on international flights are significantly lower than on domestic flights.

Image: China Southern’s staff
Evenly balanced models: China Southern’s fleet of over 300 aircraft is a healthy balance between Airbus and Boeing.

Iran and Turkmenistan among new international services

In the last year China Southern has started new international services to Ashgabat, Cebu, Hong Kong, Phuket, Seoul, Siem Reap, Tehran and Yangon. According to the airline’s website new services to Amsterdam from Guangzhou, Shanghai and Shenzhen will be ‘opening soon’. These will gain feed from Skyteam partner KLM’s extensive network at the airport.


Comments

No comments yet, be the first to leave a reply...

Leave a Comment

Your email address will not be published. Required fields are marked *

*