ANALYSIS: Airlines and Airports on the rise in China's international market

As World Routes returns to mainland China, Routesonline is providing a snapshot on the leading international airlines and international airports and most used aircraft types on international flights from the country and highlights the country's top performers during the first half of 2016.

As World Routes returns to mainland China, Routesonline is providing a snapshot on the leading international airlines and international airports and most used aircraft types on international flights from the country and highlights the country's top performers during the first half of 2016.

 The data is all supplied by OAG Aviation using its OAG Schedules Analyser tool.

Scheduled International Air Capacity From China (2006 - 2015)

Our analysis of published schedules for the past ten years shows that international air capacity  from mainland China rose from 33,434,830 available seats in 2006 to 72,557,073 available seats in 2015.  This represents a growth of 117.0 percent across the period, an average annual increase of 13.0 percent.  In the last calendar year international capacity increased 13.9 percent, its fastest annual rate since 2007 and second consecutive year of double-digit growth.

Annual International Traffic Trends in China during First Half of Year (2010 - 2016)

A closer look at flight schedules for just the first six months of the year shows that international air links from China are continuing to grow, continuing the trend from the start of the decade. In total 34,648,983 international seats were on offer from the country during the six month period this year versus 30,383,545 in 2015, a growth of 14.0 percent. This is the second fastest growth rate this decade after 2012 when international capacity increased 14.2 percent.

Top Ten International Airlines In China (H1 2016)

The growing propensity for international travel from China continues to fuel the growth of the country’s aviation sector and has seen many of the nation’s lesser-known carriers grow onto the long-haul stage in particular. Despite some analysts concerns on the slowing rates of growth in China, it is clear that international demand and growing non-stop connectivity into foreign markets remains top of the agenda for the nation’s airlines.

Over the first six months of 2016 there have been 140 scheduled airlines offering international flights out of China, but over a third of the 40 million total international seats are being provided by the big three operators: China Eastern Airlines (12.5 percent), China Southern Airlines (10.7 percent) and Air China (10.5 percent).

The international operations of China Eastern and China Southern make the nation a stronghold for the SkyTeam alliance, a dominance that is extended when you also consider the activities of Xiamen Airlines and its recent growth into long-haul operations following the arrival of its Boeing 787 Dreamliners.

Although the big three Chinese carriers have the largest international offering from China, foreign airlines hold the next three positions in the ‘Top Ten’ listing, highlighting in particular the strong traffic flows between China and South Korea. But, firstly it is Cathay Dragon (formerly Dragonair) that holds the number four spot with a 5.2 percent share serving a network that links 21 mainland destinations to the Hong Kong International Airport hub of its parent Cathay Pacific Airways.

The South Korean operators of Asiana Airlines (3.2 percent) and Korean Air (3.1 percent), the latter another SkyTeam alliance member, are next in the ranking list. Together they offer almost 14,000 seats per day between China and South Korea linking not just the major cities but providing major to regional and regional to regional destination connectivity.

The changing nature of the Chinese market and the growing role of intra-Asian short- and medium-haul low-cost operations is clear through the growth of Spring Airlines to its position as the seventh largest international operator in China during the first half of this year. It is only five years since the carrier launched international flights but it is already linking 25 points in mainland China with 22 international destinations.

Top Ten International Airports In China (H1 2016)

The three major Chinese hubs at Shanghai’s Pudong International Airport, Beijing’s Capital International Airport and Guangazhou’s Baiyun International Airport accounted for more than half (55.4 percent) the total international non-stop flight capacity from mainland China during the first half of 2016.

When you also include Changdu’s Shuangliu International Airport and Hangzhou’s Xiaoshan International Airport the top five account for three in five of all international passengers and the top ten in total accounts for almost three quarters (73.6 percent) of the total international seat offering.

It is Pudong International Airport in Shanghai that leads the way with a 26.1 per cent share of international capacity from mainland China during the first six months of 2016, ahead of Capital International Airport in Beijing (19.0 percent) and Baiyun International Airport in Guangzhou (10.4 percent).

Chengdu’s Shuangliu International Airport continues to highlight the rise of second-tier destination, the host of this year’s World Routes air service development forum. Its 3.4 percent share of international capacity during the analysis period may seem a small proportion, but it represents over 1.3 million international seats, more than 7,000 a day or 41 full Airbus A320s.

While the largest airports in the country are still being linked to an increasing number of international destinations, congestion issues, slots restrictions and increasing demand mean more and more regional points in China are now being linked with foreign markets on a point-to–point rather than via local hubs.

Xiaoshan International Airport in Hangzhou was directly linked to 39 different international destinations (including Chinese territories) and Gaoqi International Airport in Xiamen to 23. Both are linked to Amsterdam Schiphol Airport in the Netherlands and the latter also now has flights from Xiamen Airlines to Melbourne, Vancouver and later this year to Seattle.

Top Ten International Airports From China (H1 2016)

The main ‘foreign’ destination for international flights from mainland China is into the former British colony of Hong Kong, now a Special Administrative Region of the People's Republic of China. Over 4.7 million one-way seats were available to Hong Kong from 47 airports on the mainland during the first half of this year, an average of over 25,000 per day or almost 50 full Airbus A380s.

The strong economic and connectivity links between China and South Korea and Thailand mean that Seoul and Bangkok are the second and third largest destinations, ahead of Taipei, Taiwan and Tokyo, Japan, while Singapore, Osaka, Kuala Lumpur, Phuket and Macau (another Special Administrative Region) are also among the top ten destination cities, based on the international capacity offering in the first half of this year.

Dubai International Airport is the largest international market outside of Asia from mainland China by capacity thanks to a significant offering from Emirates Airline and flights from Chinese carriers Air China, China Eastern, China Southern and Sichuan Airlines. The French capital, Paris, holds a similar position within Europe thanks to non-stop flights by Air China, Air France, China Eastern, China Southern and Hainan Airlines from eight mainland Chinese cities.

Meanwhile seven airlines, including US majors American Airlines, Delta Air Lines and United Airlines provide links non-stop to Los Angeles from not just the big gateways of Beijing, Guangzhou and Shanghai, but also Changsha and Nanjing.

Fastest Growing Airlines in China's International Market (H1 2016)

Data comparison between the first six months of 2015 and 2016 shows a steady level of growth among the top ten international airlines serving China, with over half generating double-digit international capacity growth between the two periods, including the three Chinese majors that dominate this market: China Eastern Airlines (up 15.7 percent), China Southern Airlines (up 15.8 percent) and Air China (up 11.4 percent).

In fact only three of top 25 airlines serving China by international seat capacity reduced their inventory between the first half of last year and the first six months of 2016.  These comprised Singapore Airlines (down 0.5 percent), United Airlines (down 1.2 percent) and EVA Air (down 4.2 percent), albeit the latter has still more than doubled its activity between Taiwan and mainland China since the start of the decade as the cross-straits accessibility has improved.

The fastest-growing airline in the Chinese international market during the first half of 2016 was Sichuan Airlines as it boosted not only its offer from long-standing international bases in Chengdu, Chongqing and Kunming, but also other cities across China.  In the first half of this year it offered international flights from 12 airports in China to 27 foreign destinations, boosting its international offer by 71.1 percent from 1,550 seats to 2,660 seats on average a day.

Shenzhen Airlines reported the second largest rise in capacity from China with growth of 50.0 percent, while low-cost carrier Spring Airlines continued to major expansion with a 48.0 percent growth after offering more than one million international departure seats during the first six months of the year for the first time in its short history.

While strong in the domestic market, Hainan Airlines also continued its rise in international skies with a 42.9 percent increase in international capacity and will soon be counted among the top ten carriers in China’s international market. Alongside the majors, Xiamen Airlines also boosted international capacity by a double-digit margin as its transition from domestic to international operations (including long-haul flying) meant its inventory rose 23.6 percent.

With AirAsia looking closely to broaden its regional offering and potentially grow its Chinese market presence with the formation of a new joint venture in the country, it is no surprise to see it recorded the largest capacity growth among non-Chinese airlines. Its capacity grew by over a third during the first six months of 2016, while its Thailand business also showed a 25.1 percent rise in international capacity from China.

Fastest Growing Airports in China's International Market (H1 2016)

The first six months of 2016 has seen the continued rise of the regional destinations in China and remarkably the data shows that only one of the 25 largest airports in the country had a decline in international seat capacity compared to the first half of 2015: Ürümqi’s Diwopu International Airport. The average rate of international seat growth among these 25 airports was 14.8 percent.

The performance among the top ten international airports in the country was significant, but the main area of growth is with the airports ranked between 11-17 and where the average rate of international capacity growth was a massive 29.8 percent.

The fastest growing international airport was Changsha Huanghua International Airport in Hunan Province, which serves the cities of Changsha, Zhuzhou and Xiangtan. The airport, like many in mainland China is in the middle of a major expansion project, and has been buoyed by new long-haul connections from Hainan Airlines to Los Angeles (from January 2016) and Sydney (starting September 2016).

Another Chinese airport to recently gain non-stop connectivity to the United States of America, Wuhan’s Tianhe International Airport is the second fastest growing international airport in China with a 38.0 percent capacity rise between the first six months of 2015 and the same period this year.  Meanwhile, Chongqing’s Jiangbei International Airport is also replicating its recent domestic growth with a rise in its international network with capacity rising 35.2 percent over the same period.

Among the largest airports in the country it is Chengdu’s Shuangliu International Airport that continues to see the largest rate of international seat growth. From just 300,000 international seats on offer in the first six months of the decade, the facility now has an inventory of over 1.3 million and this year’s growth of 34.2 percent is actually its second largest of the decade for the first half of the year (2011: 11.7 percent; 2012: 48.7 percent; 2013: 27.9 percent; 2014: 32.1 percent and 2015: 19.5 percent).

Scheduled International Departures from China by Aircraft Type

The chart below shows which aircraft types were most prevalent on international flights from mainland China during the first half of 2016. The schedule data shows the Airbus A320 (320) is the most widely used aircraft type in this market with a 24.5 per cent share of flight departures with overall international flights up 19.9 percent versus the same period last year and 214.3 percent since the first six months of 2010.

The second most utilised aircraft type in this market is the Boeing 737-800 (738) with a 16.6 percent share of departures, while the third most widely operated type by scheduled flight operations is the largest member of the Airbus A320 Family, the A321 (321) with a 12.9 percent share.

The Airbus A330 is the most widely used widebody type on international services in and out of mainland China and being used by both local and foreign operators.  The three operational codes of 333, 332 and 330 together accounted for over 33,000 international departures (around 17.3 percent) from mainland China during the period, over 180 per day.

The biggest rise in usage among the top ten aircraft types on international flights from mainland China were recorded by two Boeing 777 variants. The 777-300 (773) recorded a 39.1 percent increase in flights versus last year and has witnessed an almost eight-fold increase in flights since the first half of 2010.  The 777-300ER (77W) also recorded a 20.2 percent rise in departures during the period.

There has also been a notable, but expected, growth in Boeing 787 Dreamliner operations with 787-8 (788) departures rising from 1,615 in the first half of 2015 to 2,979 in the same period this year, while 787-9 (789) departures grew from 255 to 1,172 during the same six month periods.

The Airbus A319 (319) is the only type among the top ten to see a decline in usage with departures down to just under 5,000 flights. This was a 2.7 percent decline on the first half of 2015 and 6.7 percent on the first half of 2010 and could illustrate the maturity of markets and moves by airliners to larger capacity aircraft on established routes. Other types to see a decline in usage in the first six months versus last year were the 747-400 (744) which was down 31.4 percent, the Airbus A340-300 (343), down 23.0 percent, and the Embraer 190 (E90) which fell 32.2 percent.

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