Air China Outlines European Network Growth

Air China will this summer inaugurate flights from Beijing to the Swiss city of Geneva and from the expanding regional city of Chengdu to Frankfurt as it increases its presence in the European market as part of a strategy to boost its international flight activities.  Details of the European growth follow just weeks after the carrier secured permission to expand its activities in North America with a new direct service between Beijing and Houston.

The new service between Beijing and Geneva will begin from May 7, 2013 and will be flown on a four times weekly schedule using an Airbus A330-200.  The Chinese flag carrier will be the sole operator to provide a non-stop connection between the two cities and its Beijing Capital International Airport hub will become the first point in East Asia to be served directly from Geneva, bringing potential transfer options to other destinations such as Bangkok, Hong Kong, Manila, Seoul and Tokyo.

In the year ending September 2012, around 286,000 bi-directional O&D passengers flew between Switzerland and China, the majority on the existing flights from Zürich Airport.  National carrier Swiss International Air Lines provides links to Beijing and Shanghai in mainland China and Hong Kong, while Hainan Airlines also offers direct flights to Beijing.  However, around 77,000 passengers during this period, around 26.8 per cent, began or ended their flight itineraries in Geneva.

The rolling-year data shows that Beijing and Shanghai hold by far the largest passenger flows between Geneva and China, accounting for 14.1 per cent and 8.8 per cent of the total traffic between Switzerland and China during the 12 month period to September 2012.  Of the 40,000 bi-directional O&D passengers between Geneva and Beijing during this period, Air China already held an 18.8 per cent share of the traffic via its existing European links to Frankfurt and Munich.  Fellow Star Alliance partner Lufthansa is the market leader with a 29.7 per cent share.

Air China currently serves eleven destinations in Europe, comprising Athens, Dusseldorf, Frankfurt, London, Madrid, Milan, Moscow, Munich, Paris, Rome, Stockholm  There would appear to be a number of cities that would also make good markets for the carrier and the selection of Geneva as its latest European destination represents a massive coup for the management at Cointrin International Airport.  “Geneva Airport is delighted to welcome an increasing number of Chinese visitors and will offer these customers a really dedicated airport experience,” said Robert Deillon, Chief Executive Officer, Geneva Airport.

Geneva offers a lot of potential.  It was ranked as the world's ninth most important financial centre for competitiveness by the Global Financial Centres Index, ahead of Frankfurt, and third in Europe after London and Zürich and a 2009 survey by Mercer found Geneva to have the third-highest quality of life of any city in the world (behind Vienna and Zürich for expatriate people).  Some 130 multinationals already have a headquarters base in Geneva, taking advantage of the local quality of life, excellent infrastructure, highly educated and multilingual workforce, and stable and secure surroundings. International banks, world famous high-tech and biotech companies, as well as the world’s leading trading companies, have all chosen the city for their headquarters or a key office.

This summer, Air China will also introduce its first direct link to Europe from the fast expanding Chinese city of Chengdu with a three times weekly link to Frankfurt from May 19, 2013 using an A330-200.  KLM currently offers the only direct air service to the city, the main access point into the Sichuan province of China, but British Airways has recently revealed it too will introduce non-stop flights from its London Heathrow base from September this year.  It is also understood that Sichuan Airlines is planning to launch flights between Chengdu and Paris CDG from June 2013.

In the last decade air traffic at Chengdu’s Shuangliu International (CDIA) has grown almost five fold as the facility develops into one of the country’s major airports.  At the change of the Millennium, CDIA was handling a passenger throughput of 5.52 million, a figure that almost trebled to 13.89 million by 2005, an average annual increase of ten per cent.  By 2010 this figure had almost doubled again to 25.80 million, a figure that ranked it as the fastest-growing airport in Central and Western China, and in 2011 this grew to 29.07 million, a 12.7 per cent annual growth.  Last year CDIA celebrated handling 30 million passengers for the first time and it is now the fifth largest airport in China behind Beijing Capital International, Guangzhou Baiyun, Shanghai Pudong and Shanghai Hongqiao.

Despite no direct links, Germany is the third largest O&D market for passengers between Europe and Chengdu behind the UK and France.  Its share of demand has grown from 9.9 per cent in 2007 to 13.2 per cent in 2011.  During 2011 an estimated 5,600 bi-directional O&D passengers travelled between Frankfurt and Chengdu, with the largest flows with Air China via Beijing.

Elsewhere in Europe, Air China is to boost frequencies and capacity on some of its existing routes during summer 2013.  On its daily Beijing – London Heathrow route a Boeing 777-300ER will replace the existing Airbus A330-200 from May 15, 2013 and will support capacity development following the closure of its short-lived London Gatwick operation.  In Sweden, the carrier will switch its five times weekly Beijing – Stockholm Arlanda route from an A330-200 to a larger A330-300 from March 31, 2013 and boost frequencies to a daily schedule from June 3, 2013.  There will also be changes to Air China’s flights to Germany with an A330-300 replacing an A330-200 on the four times weekly route between Beijing and Dusseldorf from March 31, 2013, while flights between Beijing and Munich will increase from five a week to a daily schedule (including a twice weekly extension to Athens) from June 19, 2013.

In the table below we highlight air capacity between China and Europe and how this has changed over the past couple of years.  This year is scheduled to be the first year that Air China has the largest share of capacity in this market, overtaking Cathay Pacific Airways.  The Chinese flag carrier’s share of seat availability between China and Europe has grown from 14.3 per cent in 2010 to an estimated 16.1 per cent this year.  Other Chinese carriers have also strengthened their positions with China Southern Airlines seeing its own share rise 2.8 percentage points to a 6.0 per cent share and China Eastern’s rising 1.2 percentage points to a 5.6 per cent share over the four year analysis.

SCHEDULED INTERNATIONAL AIR SERVICES BETWEEN CHINA* AND EUROPE (non-stop departures)

Rank

Airline

Available Seats** (2013)

Marketshare (2013)

Marketshare (2012)

Marketshare (2011)

Marketshare (2010)

1

Air China (CA)

1,241,684

16.1 %

14.8 %

14.2 %

14.3 %

2

Cathay Pacific Airways (CX)

1,153,587

15.0 %

15.5 %

17.1 %

18.1 %

3

Lufthansa (LH)

874,199

11.3 %

11.4 %

12.0 %

11.6 %

4

Air France (AF)

682,573

8.9 %

8.7 %

8.8 %

9.6 %

5

KLM Royal Dutch Airlines (KL)

509,998

6.6 %

6.9 %

7.0 %

6.8 %

6

Aeroflot Russian Airlines (SU)

468,587

6.1 %

6.5 %

5.7 %

4.6 %

7

China Southern Airlines (CZ)

459,903

6.0 %

5.0 %

4.2 %

3.2 %

8

China Eastern Airlines (MU)

432,517

5.6 %

5.1 %

4.8 %

4.4 %

9

British Airways (BA)

422,493

5.5 %

5.4 %

5.8 %

6.1 %

10

Finnair (AY)

367,131

4.8 %

4.4 %

4.3 %

4.5 %

NETWORK TOTAL

7,709,631

7,558,853

7,300,669

6,410,516

* China total includes its other territories, including Hong Kong.
** based on already loaded and provisional schedules for 2013.