All Routes lead to Beijing; Chinese airline traffic booms 16% in the first half of 2009

Image: The anna.aero Beijing Daily
Understanding the dynamic: Chinese international traffic (6.7 million) is down 17% this year, but this is dwarfed by the 100m passengers travelling domestically – up almost 20% in 2009 – total demand is booming. anna.aero is an Official Media Partner of the 15th World Route Development Forum in Beijing and will produce a fabulous daily newspaper every day in Beijing packed with all the news, analysis, and learn-attainmentTM you have grown to love.

While many airlines around the world are struggling to figure out how to be profitable with fewer passengers, according to CAAC data Chinese air traffic is up 16.4% in the first half of 2009. No wonder next week’s annual gathering of many of the world’s leading airline network planners and airport marketing executives is taking place at the 15th World Route Development Forum in Beijing. Last year China’s airports handled 405.8 million passengers (about the same as all of Germany’s and Spain’s airports put together), an increase of 4.7% over 2007, with 26 of the top 30 airports reporting growth. In 2007 passenger growth across the country’s airports was a phenomenal 16.8%.

Growth in 2009 has been driven by domestic air traffic which is up almost 20% for the first six months and was up 28% in June. International traffic by contrast is down around 17%. In 2007 international traffic growth matched that of domestic demand but since last spring demand has dropped off. However, domestic traffic numbers (100 million passengers so far this year) dwarfs international traffic (6.7 million) as a result of which total demand is booming.

Chart: Chinese airline passengers - Change in passenger numbers: 1/07 to 6/09
Source: CAAC

Beijing and Shanghai each serve over 50 million passengers

While Beijing is served by a single airport, Shanghai’s traffic is split between Pudong (which handles international flights) and Hongqiao, which deals mostly with domestic flights. If Pudong and Hongqiao are combined then both Beijing and Shanghai handle more than 50 million passengers annually.

Chart: Top 15 Chinese airports - Annual passengers 2008 (millions)
Source: CAAC

In 2008 the fastest growing major airports were Haikou (+13.2%), Nanjing (+10.5%) and Wuhan (10.1%). Only Shanghai Pudong (-2.4%) and Chengdu (-7.1%) saw traffic decline last year.

Almost 100 airlines serve Chinese market

According to OAG data for September a total of 96 airlines operate scheduled services across 162 airports in China. Ranked by weekly flights the leading airlines are China Southern (10,090 weekly departures), China Eastern (8,333), Air China (6,057), Shenzhen Airlines (3,466) and Hainan Airlines (3,079). Xiamen Airlines, Sichuan Airlines, Shanghai Airlines and Shandong Airlines also each operate more than 1,500 flights each week.

Analysis of the leading 12 airports based on current scheduled seat capacity clearly illustrates how no one carrier is excessively dominant at any of the leading airports. China Southern has almost half of all seat capacity at Guangzhou, while China Eastern has 46% of seats at Kunming.

Chart: Top 12 airports in China 2009 - Airline market share of scheduled seat capacity
Source: Derived from OAG Max Online for w/c 7 September 2009

Beijing sees capacity growth of almost 10%

Analysis of OAG schedule data for Beijing airport reveals that since last September the number of flights at the airport has increased by 9.4%. However, capacity on international services has fallen by around 5%. Services that have been dropped include flights to Dűsseldorf (airberlin/LTU), Karachi (Air China), Stockholm Arlanda (SAS), Sydney (Qantas) and several Russian destinations. New non-stop international services include Algiers (Air Algerie), Cairo (Egyptair) and Moscow Sheremetyevo (Hainan Airlines).

Several domestic routes have seen an increase in competition with additional carriers entering some markets. On several routes such as Chengdu, Chongqing, Fuzhou, Hangzhou, Yinchuan, Kunming, Lanzhou, Ningbo, Nanjing, Shanghai, Shenzhen, Wuhan and Xiamen there are at least four airlines competing with at least daily services.


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