16 Oct 2017

China Aviation Industry Newsletter 16 October

Chinese airlines to open 102 international destinations since 2006. Air China, HNA growing fastest According to CAPA Aviation analysis Asia's airlines are continuing to embark on what they consider to be once-in-a-lifetime long haul growth. Nowhere is this stronger than in mainland China, whose airlines have been opening 102 intercontinental destinations since 2006. Hainan Airlines and Air China lead the frenzy, with 23 and 19 new markets respectively. China Express Is Newest CFM56 Operator China Express Air has become the newest operator of CFM International’s CFM56 engines. The airline took delivery of the first of 11 CFM56-5B-powered Airbus A320ceo aircraft; the remaining aircraft are scheduled to be delivered in 2018 and 2019. The airline is operating the aircraft routes from its base in Chongqing to such destinations as Liuzhou, Haikou, Xiangyang, Bijie, and Xiamen. Chinese-invested Lanmei Airlines Launched in Cambodia Lanmei Airlines (Cambodia), a Chinese-owned airline, was launched in Cambodia and will operate six-nation flights in the Greater Mekong Sub-region. Cambodian Deputy Prime Minister Hor Namhong and Chinese Ambassador to Cambodia Xiong Bo were among nearly 200 guests taking part in the launching ceremony in Phnom Penh. Li Kun, chairman and chief executive officer of Lanmei Airlines, said the company would invest in six aircrafts in the first year before increasing to 20 planes within three years. China is leveraging high debt to fuel growth: IATA IATA chief economist Brian Pearce, speaking at the CAPA-ACTE Global Summit, stated 12 October China is leveraging high debt to fuel growth. "Interest rates are incredibly low... servicing that debt doesn't cost much", he said. Mr Pearce added asset prices globally are "very high", while he believes there is "no reason" for banks to increase interest rates globally in the short to medium term. "The inflation is not there", he explained. China Southern Cargo and Air France KLM Martinair Cargo agree to expand cooperation China Southern Airlines Cargo and Air France KLM Martinair Cargo signed a MoU on 11 October to intensify their strategic cooperation. The agreement could lead to an integrated commercial and operational cooperation model between Europe and China. Over the next four years the carriers aim to investigate and exploit opportunities in the airfreight market. Ethiopian Airlines eyes attracting more Chinese tourists: CEO Ethiopian Airlines (ET) is eyeing a bigger share of the Chinese tourists' market which at more than 120 million is estimated to be the single largest tourist numbers globally. Ethiopian Airlines CEO Tewolde Gebremariam said "Today, China is the single largest market for Ethiopian Airlines with 5 destinations and 31 total weekly flights." Ethiopian Airlines Mulling Flights to Hangzhou as 6th Chinese Destination Ethiopian Airlines (ET) is mulling flights to the eastern Chinese city of Hangzhou. Hangzhou, the capital of Zhejiang province, has in recent years been known as an emerging technology hub and home to e-commerce giant Alibaba. Tewolde Gebremariam, CEO said the carrier is mulling Hangzhou as its next destination as part of its plan to attract more Chinese tourists and business people. Honda Appoints Chinese Dealer Honda Aircraft has appointed Honsan General Aviation as its authorized sales representative in China and has applied for type certification validation for the HA-420 HondaJet with the Chinese CAAC. Honsan is based at the Guangzhou Airport in Southern China, strategically located to service markets in Hong Kong and Macau, said Honda Aircraft CEO Michimasa Fujino. He noted that Honda already has widespread brand recognition in the country as the best-selling Japanese car in China. From Guangzhou the HondaJet can reach Beijing non-stop. Fujino said he expected CAAC approval to take 18 months. IAG: LEVEL could 'work very well' in China IAG CEO Willie Walsh, speaking at the CAPA-ACTE Global Summit, stated "great discussions" continue with airlines in China on codeshares and interlines. Mr Walsh said IAG is "happy to invest" in China and "it is a market for the future... we will be there". Mr Walsh said LEVEL is a brand and product "that could work very well' in China. Projections regarding China's aviation and tourism market 'likely to be an underestimate': CAPA CAPA - Centre for Aviation executive chairman Peter Harbison, speaking at the CAPA-ACTE Global Summit, stated 12 October any projections regarding China's aviation and tourism market are "likely to be an underestimate". Mr Harbison said "ripples" from the growing Chinese international segment are gradually spreading to other regions. Acumen Aviation © 16 October All Rights Reserved.