The world airline industry is entering a period of rapid change and China’s carriers may well be the ones to replace US airlines as the international air travel market leaders, according to a new report by aviation intelligence specialist OAG.
According to OAG’s Schedules Analyser, passenger seat capacity of China’s carriers – dominated by China Southern, China Eastern and Air China – has increased dramatically from approximately 100 million seats in 1996 to some 600 million in 2014. This has largely been a result of strong domestic demand, which accounts for about 90% of China carrier capacity.
With their domestic business in solid shape, China’s carriers have the resources to expand internationally and have been doing so rapidly. During a typical week in April 2015, for example, Chinese carriers operated 140% more seats on flights to the US than they did in 2010. In contrast, US carriers increased capacity for these routes by only 80% in the period.
While presently the US carriers are still the capacity leaders for China-US routes, China’s carriers will likely close the gap by 2022 if the two sides maintain their current rates of growth.
Prospects for future international growth by China’s carriers look very auspicious in light of the expected growth in the nation’s domestic market. The country is predicted to overtake the US as the world’s largest aviation market by 2033, generating demand for an additional 36,000 new aircraft by that time.
The emergence of Comac, China’s first commercial passenger jet manufacturer, will also benefit the Chinese carriers.
“The global aviation outlook is transforming and evolving before our eyes,” said Mark Clarkson, OAG’s Business Development Director JAPAC.
“The evolution is affecting everything – from historical business structures and government regulations to the growth and profitability of the key players in the market.
“There are currently more airlines than can realistically exist in a truly global market where barriers are eased. Our analysis shows that in time, it’s reasonable to expect a major consolidation of airline carriers globally.”
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Article: Marketing Interactive