If any indication is needed about the importance of the Chinese airline market, it can be found in the backlog of orders by the country's carriers.
Airlines in Hong Kong, which is both a major international hub in its own right and a major gateway to the mainland, and in China had more than 1,500 aircraft in service, according to information gathered by Flightglobal's Insight team.
Perhaps more significantly, however, they had a backlog of almost 550 aircraft. While some of this is for fleet replacement, most is to add capacity because of higher demand and as the domestic airlines try to take their place among the bigger carriers in the world. They already are up there, according to some estimates.
In its 2011 Current Market Outlook, Boeing said: "In 2010, for the first time ever, China's Big Three and Cathay Pacific were among the world's top 15 carriers, measured in revenue passenger-kilometres; none was on the list in 2000. Beijing Capital became the second busiest passenger airport. Hong Kong airport surpassed Memphis to become the top cargo airport by tonnage, with Shanghai Pudong airport coming in third."
Narrowbodies account for a disproportionately higher number of the backlog than in other regions, reflecting the strong demand for short-haul services within China and to the region. The domestic travel market is also still the most important segment for most of the airlines.
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©Rex Features Hong Kong Airport is both an international hub and gateway to the mainland |
Yet many of the airlines are also ordering widebodies in greater numbers than before. While some of these new aircraft are to replace the older and less fuel-efficient models such as the Boeing 747-400 and 767s and the Airbus A300, many are part of a drive to increase capacity to cope with growing demand for long-haul travel.
This growth is partly driven by demand for business travel. In the past 20 years, almost every major global company has either set up a factory in China or signed up a domestic company to be part of its supply chain. While this was initially confined to the country's southern and eastern coastal regions, over the past 10 years the trend has been to move further inland to take advantage of lower costs.
As a result, demand for air links to more points within China has grown at a steady pace, especially from the key hubs of Hong Kong, Beijing, Shanghai, Guangzhou and Xiamen, as well as between the hubs themselves.
Leisure travel has grown too, with foreigners coming to China to find out more about a country that is forecast to become the world's leading economy within the next decade or so, and is also making its mark as one of the leading international powers.
Increasingly, however, outbound travel is becoming even more important. The country's economic success has resulted in a growing middle and upper class that has created a tourist market which is becoming one of the most valuable around the world. They are travelling more often and much further - fuelling demand for air travel as well.
Boeing says that the number of passengers carried by China's airlines in 2010 was 3.5 times the total in 2000. The number of commercial aviation airports increased from 139 in 2000 to 175 in 2010. Volumes of passengers, freight, and aircraft arrivals and departures at airports in 2010 increased dramatically (by 4.2, 3.6, and 3.1 times, respectively) over 2000 levels. The domestic network of mainland carriers expanded to 1,032 city pairs in 2010 (from 624 in 2000), while their international footprint more than doubled to 258 city pairs in 2010 (from 108 in 2000).
The biggest market of all, however, is the Chinese domestic market. Foreigners who come to the country, as well as more and more of China's 1 billion citizens, are flying within China for business and leisure. The Chinese government is redeveloping and building more airports, especially in the Tier II and Tier III cities, to cater to this demand.
"Looking ahead, China has articulated policies and macro plans to encourage the international expansion of its airlines and address issues regarding air traffic management and infrastructure. By 2015, China will add 55 new airports, bringing the total available for commercial aviation use to at least 230. As the nation's high-speed rail network begins full operation, the trains will connect neighbouring cities and transport passengers to airports for longer-haul air travel," said Boeing in its report.
Airbus, in its forecast, predicts that China will be the single largest market for new civil aircraft over the next 20 years. The EADS subsidiary says that mainland carrier will generate demand for over 3,800 new passenger and freight aircraft during this period, representing 14% of the total global demand for 27,800 new aircraft forecast it has forecast between now and 2030.
Single aisle aircraft will account for around 65% of deliveries, while widebodies will account for 1,300 widebodies - including more than 200 jumbos like its Airbus A380.
It is significant that China Southern Airlines, the first Chinese operator of the A380, put it into service on routes from the country's capital Beijing to the financial capital Shanghai and industrial capital Guangzhou. The strong demand on these sectors at airports where slots are becoming increasingly hard to get means that demand for larger aircraft will continue to grow in China.
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©Airbus Superjumbo ambitions: China Southern has committed to five Airbus A380s |
Narrowbodies will continue to make up most of the demand for new aircraft. Airbus assembles the A320 in Tianjin for the domestic market - its first outside Europe - and Chinese airlines are ordering even more of both the A320 and 737s.
China is also embarking on the indigenous Comac C919 project, with the first aircraft due to be delivered in around four years mainly to meet local demand. Chinese airlines and leasing companies have accounted for almost all of the orders for the C919.
Yet, given that there is no let-up in orders for all types of aircraft, the reality remains simple - the Greater China market will continue to drive the demand for new aircraft and deliveries will continue to rise in the foreseeable future.
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Source: Flight International
