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.

11th Oct 2011


 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.

 William Dennis


[Briefs]


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