International growth stalls in China; Japan deposes South Korea as #1 market as Hainan Airlines grows 50%; Guangzhou adds 700k seats
International capacity from Chinese airports grew by almost 18% in the summer of 2016 (S16) when compared with S15, based on anna.aero analysis of OAG schedules data. This followed growth in the previous years of almost 14% (S15 versus S14) and almost 12% (S14 versus S13). Further evidence of impressive growth last year comes from CAAC, which reported that Chinese airlines saw their international passengers surge by just under 23% in 2016. However, schedule data for S17 suggests that things are not looking anything like as good this summer.
Since last October year-on-year capacity growth on international routes from China has fallen below 10%. Even more alarming, capacity growth across S17 (April to October) is averaging just under 3%, the slowest rate of growth seen since capacity fell by almost 7% in the summer of 2009 following the global financial crisis of 2008.
All change among leading country markets; Japan replaces South Korea
Looking at the currently available data by country market reveals the main problem. Three of the top five country markets (South Korea, Taiwan and Thailand) have seen capacity reductions (shown in red), one (Hong Kong) is basically flat, while the other (Japan) is growing by just 1%. Given that these five country markets account for 52% of all international seat capacity and that between them capacity is down 9%, there are clearly many smaller country markets that are reporting impressive growth. The downtown in what was last summer’s #1 country market (South Korea) can be explained by the Chinese government’s reaction to South Korea installing the US-supplied THAAD (Terminal High Altitude Area Defense) anti-missile system. As a result it has made travel between the two countries much harder and South Korea falls from first to fourth as Japan jumps to #1 despite capacity growing by a meagre 1%.
Within the top 15 markets there has been impressive growth on routes to Vietnam (+56%), Australia (+36%), and Malaysia (+34%). Outside the top 15 other booming travel markets include the Philippines (+56%), Indonesia (+45%), Cambodia (+44%) and Myanmar (+43%).
Chinese carriers mostly still growing; foreign airlines cutting capacity
With overall growth of just under 3%, all of China’s big three carriers are reporting modest international capacity growth this summer of between 2% and 5%. However, five of the six non-Chinese carriers (shown in bright green) in the top 15 are all showing declines in capacity with only Cathay Dragon showing modest growth (of just 1%). In contrast some of the other Chinese carriers are growing international capacity fast; Hainan Airlines by 51%, Xiamen Airlines by 27% and Shanghai Airlines by 14%.
Outside of the top 15 carriers some foreign airlines are expanding rapidly; AirAsia X has grown Chinese capacity since last summer by 49%, Garuda Indonesia by 41% and Vietnam Airlines by 31%. However, TransAsia Airways has ceased operating since last summer while Thai AirAsia’s capacity is down 17% and Japan Airlines’ has fallen by 8%.
Shanghai leads as Kunming and Shenzhen see biggest international growth
Looking at which airports in China have seen the biggest changes in international seat capacity reveals that five of the top 15 Chinese airports for international services have seen cuts in capacity for this summer. On the up side four airports are looking at double-digit growth on international services this summer, with Kunming (+33%) and Shenzhen (+23%) growing most quickly in percentage terms. Ranked on additional international seats, Guangzhou easily leads the way with an additional 705,000 seats, easily beating Beijing (+430,000) and Kunming (+330,000).
1st China–Europe Aviation Summit 2017
Monday 26 June 2017, Hilton Beijing Capital Airport
- Song Zhiyong, President, Air China
- Liu Xuesong, President, Capital Airport Holding Company
Look who’s also talking:
- Tony Fernandes, Co-founder and Group CEO, AirAsia Group
- Sun Jianfeng, President, Hainan Airlines
- Mikko Turtiainen, VP Global Sales, Finnair
- Han Wensheng, Executive VP, China Southern Airlines
- Li Dianchun, CCO, Hong Kong Airlines
- Thomas Kropp, SVP, Lufthansa
- Chris Wilkinson, VP FP&A, Virgin Atlantic Airways
- Han Jun, Director General, Department of International Affairs, CAAC
- Dag Falk-Petersen, CEO, Avinor
- Petri Vuori, VP Finavia
- Stephen King, Head of Airline Relations, London Gatwick Airport
- Huang Wei, Chairman of Board of Supervisors, Chongqing Airport
- Stephen Wang, Chairman, Spring Airlines
- Jerry Hu, VP Alibaba Group
New Beijing Daxing Airport Tour
Beijing Capital Airport’s tour and briefing: New Beijing Airport, Daxing (opening 2019)
Hainan Airlines Beijing Base Private Workshop
Hainan Airlines Group special private workshop, Hainan Airlines’ Beijing base including plans for European services.
Alibaba Group + Fliggy corporate office visit
Alibaba Group (turnover of $485 billion) and travel subsidiary Fliggy invites delegates to its corporate offices in Hangzhou to share knowledge with airports, airlines and other stakeholders of how Chinese travellers plans and books their travel.