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Chinese Airlines Need 3,200 More Aircraft In Next Ten Years

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Chinese airlines will need to purchase 3,200 additional aircraft over the next ten years, as the country’s international air traffic has been growing at an annual rate of 14% since 2010, reaching 126 million one-way passengers in 2016, according to a report issued by aircraft leasing company Avolon.

China is the world’s largest generator of outbound travel, with more than 120 million Chinese visiting international destinations in 2016. This still represents less than 10% of the population. The majority of inbound and outbound travel is undertaken by air, with 150 airlines providing international services from 82 Chinese airports, operating 800,000 flights annually.

“China offers an attractive long-term growth opportunity for domestic and international airlines, aircraft OEMs (Original Equipment Manufacturer) and aircraft leasing companies,” said Dick Forsberg, the report’s author. “Competition for airlines is likely to be intense as Chinese airlines focus on capturing their growth potential while being challenged by international carriers.”

Airbus said last year that China would need nearly 6,000 new passenger aircraft and freighters from 2016 to 2035.

China’s self-made single-aisle jetliner C919 took its maiden flight last Friday. The aircraft’s producer Commercial Aircraft Corp. of China Ltd. said it had received a total of 570 orders from 23 customers, including domestic airliners China Eastern Airlines, China Southern Airlines and Air China.

Chinese airlines currently have a 49% market share in the country’s international air traffic market. In addition to the big three state-owned airlines, Air China, China Southern Airlines and China Eastern Airlines, 18 Chinese airlines now operate international routes and account for 30% of the overall Chinese share.

However, the recent surge in new Chinese airlines entering international markets, particularly long-haul routes, may be unsustainable, especially as local government launch subsidies run out, says the Avolon report. Avolon is owned by Chinese conglomerate HNA Group.

Around 70% of international passengers coming from or going to China are point-to-point, making no domestic or international connections on their journey, a measurably higher proportion than the 60% global average. Only 15% of international passengers make international connections at one or both ends of their international flight.

International passenger numbers in china are forecast to increase by 8.9% annually over the next decade, with growth for Chinese airlines averaging 11.7% annually, the report forecasts.

CMN Special Situations Forum China 2017 White 468×60
 






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