IATA very excited about huge increase in Chinese aviation

China is now 2nd in the world for domestic air passengers, 7th for international passengers and 4th for international cargo.  China has 19% of the world’s population.  Chinese carriers handled about 290 million passengers in 2011, an 8.2% year-on-year increase – with perhaps a 10% rise expected in 2012? Globally, IATA expects that: “Of the 877 million additional global air travelers expected to fly in 2015 than in 2010, more than 212 million will be on journeys within or connected to China.”  Beijing Airport now has the 2nd highest number of passengers in the world (after Atlanta). IATA wants Beijing Airport to expand further, into an even more massive hub, or else for the Chinese to build a second huge hub airport.  China is looking to increase its share of world trade from 10.4% to 15% and IATA thinks aviation connectivity will be critical to making that happen.


IATA press release


“Successfully Developing Chinese Aviation”

Beijing — The International Air Transport Association (IATA) encouraged China to continue to develop its air transport sector by ensuring sufficient capacity based on global standards and best practices.

Air transport plays a critical role in China’s economic development. “China is looking to increase its share of world trade from 10.4% to 15%.  Aviation connectivity will be critical to making that happen. Already it is prioritizing investments in airport and air navigation infrastructure. The challenge is to keep pace with rapidly growing demand, based on the global standards which underpin safe and efficient global connectivity,” said Tony Tyler, IATA’s Director General and CEO at the China Civil Aviation Development Forum 2012 in Beijing.

Tyler noted that China already ranks highly for the size of its air transport industry: second in the world for domestic passengers, seventh for international and fourth for international cargo. “But this is only the beginning. Of the 877 million additional global air travelers expected to fly in 2015 than in 2010, more than 212 million will be on journeys within or connected to China,” said Tyler.

Tyler highlighted two priorities to enable China to realize this growth potential:

Infrastructure Capacity:  Tyler noted two areas for infrastructure development:

  • Air navigation infrastructure must keep pace with demand and growing airport capacity. “IATA has worked very successfully with China to open new entry points to Chinese airspace and create more flexibility in cooperation with the military. However, the challenge is growing daily as travel demand increases, leading to frustration and delays for airline passengers. The more flexibility we have in how we use and share airspace with the military as well as between domestic and international flights, the better we will be able to manage growth and meet passenger expectations.”
  • Planning for hub capacity in Beijing continues to be a priority. Tyler praised the Chinese authorities for already looking for development options when the current infrastructure at Beijing Capital International Airport reaches its design capacity. It has risen to become the world’s second busiest airport when measured in passenger numbers. “The best solution would be expansion on the same geographic site. Consolidating traffic in one airport creates the most options for connectivity and keeps costs low. But if it is decided that development at a second location is necessary, then a transparent and clear system for allocating operations between the two airports will be required, in consultation with the airlines.”

Global Standards: “Global standards are at the heart of aviation. They enable airlines to connect our planet safely and efficiently,” said Tyler, citing specifically the role of global safety standards in making China one of the safest places to fly.

Tyler noted that IATA is in a dialogue with the Civil Aviation Administration of China (CAAC) to align China’s charges for infrastructure with global standards. “Our goal is to arrive at a charges structure that is competitive and in line with global best practices and International Civil Aviation Organization (ICAO) standards.

Today, China’s air navigation service charges are among the highest in the world. The price of fuel is also among the highest – it is estimated that airlines pay a premium of over $400 million annually to refuel at Chinese airports.

Bringing those costs in line with global levels will benefit Chinese carriers more than any others and will thereby help to make them more competitive. We also need to eliminate the differential in charges between Chinese and foreign carriers that is unacceptable under ICAO policies. This move will also help Chinese carriers improve their competitiveness by forcing them to compete on a more level playing field,” said Tyler.

EU Emissions Trading Scheme (ETS)

Tyler also addressed the thorny issue of the EU ETS.. “China is in the front line of state opposition to Europe’s misguided plans to include international aviation in the ETS. The regional approach will distort markets. We believe that the EU’s unilateral action is in contravention of the Chicago Convention. And I fully understand why China views this as an attack on its sovereignty. Nobody wants a trade war. We continue to urge a solution through the ICAO process,” said Tyler.

“I have been very clear in my communication with the Europeans that it’s not a viable bargaining position for the Directorate General for Climate Action to keep relentlessly saying that Europe has no option but to implement without compromise. We all want a solution that is global. ICAO is working on four options. Europe must be a sincere participant in those negotiations,” said Tyler.

Tyler concluded, “I am confident about China’s aviation future. There is tremendous growth potential and an industry working with government to achieve it. In a few weeks’ time we will invite the aviation world to Beijing for our Annual General Meeting. Working alongside the Chinese industry and the Chinese government I see IATA’s relationship with China as a partnership—navigating through the challenges and building tomorrow.”

The IATA Annual General Meeting will take place in Beijing from 10-12 June.

Read Tony Tyler’s Speech
Notes for Editors:

  • Chinese Minister of Commerce, Chen Deming is quoted in the Xinhua News Agency (8 May 2012) as saying: “China’s population accounts for 19%  of the global population while its current trade volume is only 10.4% of that of the world, so it will be totally fine for China’s trade to be 15% of the world’s.”
  • IATA (International Air Transport Association) represents some 240 airlines comprising 84% of global air traffic.







China sees single-digit traffic growth as Asia’s airlines brace for tough 2012

29th December, 2011

China’s air transport industry has entered a stage of slower growth, registering single-digit total air traffic (RTKs, including passenger and cargo traffic) of growth in 2011 according to CAAC. China’s aviation industry experienced double-digit traffic growth from 2004 through 2010, according to CAAC, with 2010 clearly a banner year of recovery for China, after the downturn in 2008/09. 2011’s volumes have been well below expectation, particularly since the middle of the year.

In the wider Asia Pacific region, the Association of Asia Pacific Airlines (AAPA) has noted that Asian carriers are bracing themselves for another tough year in 2012 as the outlook is impacted by the “unresolved concerns about the Eurozone debt crisis and wider uncertainty about the global economic outlook for 2012”. However, the association noted the region’s airlines are faring better than airlines in other regions and that they are still “relatively well placed” to benefit from future growth opportunities.

The longer-term outlook is also “positive as evidenced by fleet expansion plans and the establishment of new business ventures,” AAPA said. The association has previously noted that airline margins have been “squeezed” in 2011, due to sharply higher fuel prices, echoing similar comments made by IATA.

CAAC reports USD7.2 billion industry profit in 2011 

CAAC director general Li Jiaxiang this week stated China’s aviation growth is being impacted by the global economic crisis, but noted, as quoted by China Daily, that “the growth speed is still the highest in the world, and so is the industry’s total profit, estimated at CNY45.6 billion (USD7.2 billion) for 2011, which accounts for more than half of the profits of the global air transport industry”. He added 2011 would mark the “second consecutive year that China ranks the world’s number one in terms of net profit”.

Deputy director general Li Jun noted the country’s high-speed rail network had claimed some of the passenger traffic from airlines and the limited airspace set aside for civil aviation has also restricted the growth of passenger transport. International growth is also being impacted by global economic concerns and rising oil prices, Mr Li said.

Chinese airlines handle 290 mill pax in 2011

According to CAAC, Chinese carriers will handle 290 million passengers in FY2011, an 8.2% year-on-year increase. A 2% decline in cargo volumes to 5.5 million tones is forecast. In FY2012, passenger growth of 10% is expected, for full year passenger traffic of 320 million. Cargo growth of 4.7% is expected to 5.8 million tonnes.

CAAC profit and traffic forecasts: FY2011 and FY2012

  • FY2011:
    • Profit: CNY45.6 billion (USD7.1 billion), +5.1% year-on-year;
    • Passenger numbers: 290 million, +8.2%;
    • Total traffic (RTKs): 57.4 billion, +6.6%;
    • Passenger load factor (11 months to Nov-2011): 72.3%;
    • Cargo volume: 5.5 million tons, -2%;
    • Number of airports with annual passenger numbers exceeding 10 million: 21;
  • FY2012:
    • Passenger numbers: 320 million, +10%;
    • Cargo volume: 5.8 million tons, +4.7%;
    • Investment in fixed assets: CNY158.5 billion (USD24.8 billion);
    • Infrastructure investment: CNY75.0 billion (USD11.7 billion).

CAAC in Oct-2011 cut its official air traffic forecast for 2011 as international passenger and cargo volumes weakened amid deteriorating global economic conditions. China’s passenger growth forecast was cut from 13% to 8% this year to 288 million passengers (ie 13.4 million fewer passengers than previously anticipated but up from 267 million passengers in 2010). Forecasts now indicate growth of 8.2% in 2011, for 2 million more passengers than previously forecast. While the air cargo growth forecast in Oct-2011 was dramatically slashed from growth of 11.5% to flat in 2011, the actual freight result has failed to even meet this revised growth, with a 2% cargo decline anticipated. China’s long-term growth forecasts remain unchanged, with an increase to 450 million passengers still expected by 2015, despite the impact of high-speed rail.

CAAC passenger numbers and growth forecast: 2003 to 2030F

Source: CAPA – Centre for Aviation & CAAC

CAAC freight traffic (million tonnes) and growth forecast: 2003 to 2015F

Source: CAPA – Centre for Aviation & CAAC

China’s commercial fleet reaches 1745 aircraft; fleet additions to be limited to no more than 150 aircraft in 2012

China’s commercial transport fleet reached a total of 1745 aircraft, with the addition of 148 aircraft in 2011. According to Mr Li, China took delivery of 805 aircraft between 2008 and 2011, which is 149 short from its forecast. Like 2011, when Chinese airlines were requested to delay the delivery of 60 new aircraft, Mr Li said that “control (on the importing of planes) will continue next year, and not more than 150 planes would be added to the fleet in 2012”. CAAC is, however, encouraging airlines to acquire more widebody aircraft to replace the current single-aisle aircraft on high-density domestic sectors, especially between Beijing, Shanghai andGuangzhou.

In terms of infrastructure development, the “original plan of building 60 new airports during the 12th Five-Year Plan period (2011-2015) will be extended to 70 in order to encourage the development of local air transport,” Mr Li said. China has 180 airports at the end of 2011, up from 175 in 2010.

CAAC operational highlights for the nation’s aviation industry in 2011:

  • Number of carriers: 46 (including 11 freighter carriers), three more than 2010;
  • Number of airports: 180, five more than 2010;
  • Number of aircraft: 1745 aircraft, 148 more than 2010;
  • General aviation flight hours: 455,000 hours, +16.3% year-on-year;
  • Fixed asset investments: CNY69.0 billion (USD10.8 billion) including CNY46.0 billion (USD7.2 billion) in airport construction and CNY1800 million (USD281 million) in air traffic control construction;
  • Number of pilots: 27,569 including 25,853 Chinese nationals and 3293 foreign pilots;
  • Number of aviation employees: 1.2 million;
  • Bilateral agreements: Signed one new bilateral air transport agreement in 2011, bringing China’s number of bilateral agreements to 114 nations and regions.

Meanwhile, on-time performance (OTP) has greatly improved in China over the past year. The country’s flight punctuality rate reached nearly 77% in the first 11 months of 2011, up 1.9 ppts year-on-year. The CAAC will continue to improve flight punctuality, and strive to raise the OTP rate by 2 ppts in 2012.

CAAC separately reported a 13.8% increase in passenger numbers to 23.7 million in Nov-2011, with a 3.1% decline in cargo volumes to 485,900 tonnes. Passenger load factors improved 2.6 ppts to 80.2%.

CAAC domestic passenger growth vs international passenger growth: Jan-2010 to Nov-2011

Source: CAPA – Centre for Aviation and CAAC

CAAC passenger numbers growth vs cargo volume growth: Jan-2010 to Nov-2011

Source: CAPA – Centre for Aviation and CAAC

Asia Pacific airlines have over 350 aircraft on order over next three years

Overall, Asia Pacific airlines have 350 aircraft on order over the next three years, of which 100 are widebodies, foreshadowing continued growth in this region, with much of the new deliveries acting as growth and not replacement aircraft. Much of the region’s growth will come from Chinese airlines, both the ‘Big Three’ and the second tier carriers, as they expand their presence in the region and increase long-haul markets.

Asia Pacific projected delivery dates all aircraft as at 29-Dec-2011

Source: OAG Fleet iNET

Asia Pacific fleet breakdown for aircraft as at 29-Dec-2011

Source: OAG Fleet iNET

Low-cost carrier expansion is also a key trend in this region, with three LCCs to enter the Japan market – AirAsia JapanJetstar Japanand Peach Aviation – with other LCCs including AirAsia PhilippinesScootThai Smile and VietJet all planning launches in 2012.

Asia Pacific aviation represents a quarter of global passenger traffic, 42% of cargo traffic: AAPA

According to AAPA, Asia Pacific aviation now represents a quarter of global passenger traffic and 42% of global air cargo traffic. Asia Pacific aviation handles 521 million annual passengers, comprised of 433 million domestic and 188 million international travellers, and 18 million tonnes of freight, generating revenues of USD144 billion.

… and it continues ….

at  http://www.centreforaviation.com/analysis/china-sees-first-single-digit-traffic-growth-since-2003-as-asias-airlines-bracing-for-tough-2012-65429



See also


China set to overtake US become world’s biggest business travel market by 2015

Date added: May 23, 2012

China is expected to become the biggest market for business travel in 3 years. A recent study shows corporate travel [domestic and international] spending in China may rise by 17% to $202 billion this year and by another 21% to $245 billion next year. China is currently 2nd behind the US in terms of business travel spending with a total of $182 billion in 2011 compared to $250 billion in the US. The UK is ranked 4th globally for [business] travel spending at $38 billion with Japan in third position at $65 billion. China’s international outbound business travel spending will increase by 27% next year. While the total amount spent is expected to surpass the US by 2015 as China continues its strong growth. No wonder the UK airports all want to get their hands on the Chinese passengers.

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