|China Airlines and Mandarin Airlines inaugurated an historic weekend charter flight between Taoyuan and Nanjing on 1 November – a further step forward in cross-strait ties. China Airlines’ special ‘Taiwan fruit’ livery was used for the first flight.|
Relations between China and Taiwan appear to be easing, at least if developments in aviation are anything to go by. For years direct scheduled flights between the two nations were banned with passengers having to travel via intermediate points such as Hong Kong or Macau. After finally permitting weekend charter flights the two sides have now embarked on further steps towards liberalization of air services.
One area of compromise has been to designate the flights as “cross-strait” services, since China considers them domestic routes while Taiwan considers them international.
This anticipated surge in international traffic will help offset a rapid decline in the last 18 months in domestic air travel. This has been caused by the opening up of high-speed rail (HSR) services along the western side of Taiwan between Taipei and Kaohsiung which has reduced the rail journey time to as little as 90 minutes.
|Source: Taipei Airport|
Taiwan Taoyuan International airport (TPE), also known as Chiang Kai-Shek, was opened in 1979 to replace the old airport serving Taipei now known as Songshan Airport (TSA). It has grown impressively since 1988 when Taiwan liberalised its aviation market encouraging the creation of a second major national airline, EVA Air, which began operations in 1991.
According to local CAA statistics domestic air travel peaked in 1997 with 18 million passengers and has since fallen back considerably to an estimated six million in 2007.
The SARS outbreak of 2003 took its toll, especially on international traffic, but passenger numbers rebounded quickly in 2004. Year-to-date traffic at TPE is currently down almost 5% partly due to the improved west-coast rail links while traffic at Kaohsiung is down even more.
|The first direct weekend charter flight between China and Taiwan landed on 4 July. Passengers on the Guangzhou-Taiwan Taoyuan service were greeted with dragon dances, aboriginal singers and a red carpet welcome.|
Hong Kong dominates international traffic
Not surprisingly international traffic is dominated by services to Hong Kong. Between them Cathay Pacific, China Airlines, Dragonair and EVA Air operate almost 300 weekly departures between Taipei and Hong Kong. An estimated 60% of passengers flying between China and Taiwan are currently connecting via Hong Kong. The gradual increase in point-to-point services will have consequences for Hong Kong airports and in particular Cathay Pacific.
Japan is the second biggest country market with scheduled services from Taipei to 10 different airports in Japan. Hong Kong and Japan account for over 50% of all international traffic from Taipei. The leading airlines serving international routes in Taiwan are China Airlines and EVA Air.
|Source: OAG Max Online for w/c 17 November 2008|
The US is served by direct services to Anchorage, Honolulu, Los Angeles, New York Newark, San Francisco and Seattle with China Airlines and EVA Air operating all of the routes. The only non-stop scheduled service to Europe is currently a five-times weekly China Airlines service to Frankfurt. The airline also serves Amsterdam and Rome via Bangkok, and Vienna via Abu Dhabi. EVA Air serves Amsterdam, London Heathrow and Vienna but all via Bangkok.
Declining domestic market a virtual duopoly
The declining domestic air travel market is dominated by Uni Airways, a subsidiary of EVA Air which operates a mix of MD90s and Q300s, and TransAsia Airways which operates a mix of ATR72s and A320/A321s. Between them they operate around 85% of domestic seats and movements. Mandarin Airlines, a regional and domestic subsidiary of China Airlines, currently has around a 12% share of the domestic market. Its fleet consists of 737-800s, Fokker 100s and a growing number of Embraer 190/195s.