General News Air China eyes international expansion
Air China is focusing on expand international operations, due in part to concern over the rapid expansion of the high-speed train services across the country, which are affecting passenger loads on domestic flights.
According Air China spokesman Cai Yun, the country’s booming economy is another factor that has prompted the carrier to expand international services.
China’s per-capita Gross Domestic Product (GDP) is projected to reach US$5,900 under its twelfth five-year plan, ending in 2015. Under the eleventh plan, which ended in 2010, per-capita GDP reached US$3,000, up 10.3 percent compared with 2009, the fastest growth in three years as the nation of 1.31 billion people overtook Japan to become world’s second-biggest economy.
Analysts say air travel typically expands at twice the pace of the economy, and Chinese demand may therefore increase at close to 20 percent a year.
However, the country faces an acute shortage of trained pilots as the civil aviation industry expands. Chinese airlines have resorted to hiring foreign pilots – once considered taboo – to meet growth needs, but have yet to address the problem any other way.
China’s civil aviation industry posted a profit of 43.7 billion yuan (US$687.2 million) in 2010, more than triple the 12.2 billion yuan reported in 2009. The country’s airlines alone accounted for 35.1 billion yuan of that sum.
Wang Changshu, deputy director of the Civil Aviation Administration of China (CAAC), attributes the surge in profit to increasing market demand as 267 million Chinese nationals travelled by air in 2010, an increase of 15.8 percent over the previous year.
“We must take advantage of the tremendous potential China has to offer, with its booming economy, to increase market share on international routes,” Wang stresses. Chinese carriers are already feeling the effects of the expansion of the high-speed train network. The Beijing-Shanghai service, which was launched on 1 July, has been eroding Beijing-based Air China’s market share on the route.
“Air China will adjust capacity on the route when the need arises, but we have to face the reality that the route, which has long been a gold mine for our domestic operations, may eventually be just another [route],” Cai says. While Cai is unable to give specific details of the planned international expansion, he says it will be across the Pacific to the US and Canada, and to Europe.
Three new destinations were added to the carrier’s network in the first six months of the year. Beijing-Dusseldorf was launched in March, with Athens added in May and Milan in June.
A second daily service to Los Angeles using Boeing 747-400 aircraft was introduced on 2 September. Air China is also working hard to offer more international flights from Shanghai Pudong Airport, but securing slots is a major problem as priority is given to locally based China Eastern Airlines and Shanghai Airlines.
AIR ASTANA says it has again successfully passed the latest International Air Transport Association Operational Safety Audit (IOSA), proving its “relentless commitment to the highest standards of operational safety”. Air Astana thus remains the only airline from Kazakhstan to achieve repeated success in the audit, since it was first undertaken in 2007. During the latest audit in May 2011, safety documentation and implementation of more than 900 IOSA standards were verified on all aspects of the airline’s activities, including organisation and management, flight operations, operational control and flight dispatch, engineering and maintenance, cabin operations, ground handling, cargo operation and security. “We constantly strive to improve all aspects of our operations and this latest success is a credit to the spirit and hard work of all Air Astana employees involved in this critical process,” said Peter Foster, President of Air Astana.
JAPAN AIRLINES (JAL) and China Eastern Airlines have agreed to expand their codeshare partnership to include their entire Sino-Japanese networks. Starting from 8 October 8, the airlines will place their respective JL and MU flight designators on every flight operated by either partner between cities in China and Japan. This will add Yantai to JAL's network of 15 Chinese cities, and Shizuoka, Okayama and Nagasaki to China Eastern's network of 12 Japanese cities. The extension of the codeshare scheme to cover the entire China-Japan network will make it easier for customers to understand and select from the combined services of both carriers. JAL and China Eastern offer a combined 386 weekly flights on 42 routes between the two countries.
LUFTHANSA TECHNIK has been chosen to provide component support for Japan Airlines (JAL) – one of the first Boeing 787 customers, which has 35 of the aircraft on order. The Germany-based maintenance, repair and overhaul (MRO) company has concluded a Total Component Support (TCS) contract with JAL covering a period of ten years. As a result, Lufthansa Technik will take on the role of providing material support, including repairs and logistics services, for JAL's 787 fleet from the moment the first aircraft is delivered. The MRO service provider will supply materials from Tokyo as well as from its existing material locations in Frankfurt and Hamburg.