Chinese and Japanese airlines share international woes; domestic travel trends vary dramatically in first quarter

Image: ANA tv ad
It pays to advertise: Only the Japanese make cartoons like this – the agency behind ANA’s ‘Art of Arrival’ campaign was no doubt relieved by the airline’s 5.3% international traffic rise during the Golden Week Holidays which came despite a 10% capacity reduction.

All of Asia’s five biggest carriers in terms of weekly seat capacity are based in either China or Japan. Air China, China Eastern, China Southern, ANA and JAL between them account for around 35% of seat capacity across all of Asia’s airports this summer, and operate over 1,100 aircraft. This week anna.aero takes a look at what has happened to demand in China and Japan in the first quarter of 2009.

Image: Japan Golden Week
A Golden Week for ANA despite all the flu and money misery. Golden Week is Japan’s collection of four national holidays within seven days in combination with well placed weekends making it one of Japan’s three busiest holiday seasons. ANA says its Golden Week domestic traffic increased almost 1% and international traffic rose 5.3% despite a 10% capacity reduction.

Across the region as a whole, international traffic of the major Asian carriers has been in decline since last July, as this week’s trendwatch highlights. Japan and China’s airlines are no exception with Japan’s leading airlines reporting a decline of between 10% and 15% in the first quarter.

Chart: Chinese & Japanese airlines 2009 Q1 - Year-on-year change in international passengers
Source: Air China, ANA, CAAC, China Southern, JAL

For Air China, China Southern and all Chinese airlines as a whole the fall in international demand appears to be rather worse than in Japan. In January passenger numbers were down almost 17% followed by a 26% reduction in February. Even allowing for the extra day last year this represents a decline of over 20%. Things appear to have improved (relatively) as in March international traffic looks likely to have been down about 15%.

Image: China Eastern adds services from Xian to Singapore.
Across the region as a whole, international traffic has been in decline since last July, although there are some greenshoots of recovery – China Eastern has just added services from Xian to Singapore.

Domestic market divergence

Air travel in both China and Japan is dominated by domestic routes. Here the two countries have very different stories to tell in the first quarter of 2009. Both ANA and JAL reported a fall in domestic demand in January, February and March though ANA has revealed that during the recent ‘Golden Week’ holiday period (28 April to 6 May) domestic passengers increased year-on-year by almost 1%. International traffic during the same period was actually up 5.3% despite a 10% reduction in capacity.

Chart: Chinese & Japanese airlines 2009 Q1 - Year-on-year change in domestic passengers
Source: Air China, ANA, CAAC, China Southern, JAL

China’s domestic market has returned to impressive growth after a period last summer when demand fell. Growth of 21% in January and 17% in February looks likely to be followed by around 14% growth in March.

Chart: Chinese airline passengers - Change in passenger numbers by segment: 1/07 to 2/09
Source: CAAC

Neither country has witnessed much of an impact from the regions low-cost carriers although AirAsia serves a handful of destinations in China from Kuala Lumpur, and Tiger Airways does the same from Singapore. In market share terms their presence is negligible.


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