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China dominates Asian domestic markets; China – Hong Kong – Taiwan triangle reporting impressive growth

Mainland China – Taiwan traffic booms. (From an original 1971 poster.)

While the US and European air traffic markets are showing some signs of maturity with slowing underlying growth rates, the Asian air travel market is still growing strongly. This week’s anna.aero analysis looks at the biggest domestic markets in the region, their current growth rates, and examines which are the leading international markets in the region.

Mainland China’s domestic market has long since passed Japan as the biggest in the region and in 2010, it grew by 15%, having grown by 22% in 2009. In contrast Japan’s domestic market declined in both 2009 and 2010.

Chart: Top 12 Asian domestic markets - Weekly seat capacity (millions) and year-on-year

Source: OAG Max Online for w/c 9 May 2010 and w/c 2 May 2011

Chinese domestic capacity growth in May is just under 5%, but this is not a great surprise as domestic passenger numbers were up a relatively modest 6.6% in February and 5.2% in March. Despite the various problems in the Japanese market, domestic capacity in May is up almost 3% versus last year. However, both India and Indonesia, with their range of lower-cost carriers are reporting capacity growth of around 16%. Outside of China and Japan, eight of the next 10 biggest domestic markets in Asia are showing capacity growth of more than 10%.

China – Taiwan set to be biggest Asian international market

Having gradually overcome the various political barriers imposed, airlines from both Mainland China and Taiwan are now able to fly non-stop across the Taiwan Strait, allowing capacity to have grown by 35% in the last year, despite strict controls over which carriers can operate which routes and with what frequency. Given how quickly this market has grown, it is possible that it could become the biggest international market in the region before the end of the decade. However, for the purposes of our analysis, the Hong Kong Special Administrative Region is considered a separate country from China and, as a result, the China-Hong Kong market is the busiest in Asia, while Hong Kong-Taiwan ranks sixth.

Chart: Top 12 Asian international markets - Weekly one-way seat capacity (change versus last year)

Source: OAG Max Online for w/c 9 May 2010 and w/c 2 May 2011

Although 10 of the 12 leading international markets are within the Asian region, there are two notable exceptions. The Indian market to the United Arab Emirates ranks fourth, while the Japan – USA market now ranks fifth.


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