The Status of the Chinese International Airline Industry Professor Tian Jianwen Civil Aviation Management Institute of China
CONTENT 1 THE SITUATION OF CURRENT AIR CARGO MARKET IN CHINA 2 THE TREND OF AIR CARGO MARKET 3 STRATEGY OF AIR CARGO MARKET IN THE FUTURE 1
US China Comparison Land Area: 3.1 m sq miles Pop: 296 mil Airports: 510 RWs> 10,000 ft: 188 Land Area: 3.7 m sq miles Pop: 1.3 bil Airports: 182 RWs > 10,000 ft: ~60 2
Mainland Chinese Airlines in International Service All Cargo Airlines Air China Cargo China Cargo Airlines China Southern Airlines Yangtze River Express Express/Integrators EMS (China Postal Service) SF Airlines Passenger Airlines Air China China Eastern Airlines China Southern Airlines Hainan Airlines Sichuan Airlines In total there are 46 airlines in mainland China. Ten of them are all cargo airlines. 3
The Growth Rate of Air Cargo in China Average annual growth 13.8% Int. Average annual growth 15.9% total cargo turnover int. cargo turnover Growth in turnover of Chinese mainland airlines from 2000 to 2011 4 201
Top US Trading Partners in 2011 (Ranked by value all modes) Billions of USD 600.00 500.00 400.00 300.00 China has overtaken Mexico as the second largest US trading partner In 2010 US exports to China rose 32% while China exports to the US increased 23% 200.00 100.00 0.00
Air Cargo Market Changes in China Some low value added manufacturing has moved to south east Asia Import more, export less 26% of US based importers of retail goods have already moved some of their manufacturing out of China. 31.3% of respondents indicated that they are moving their manufacturing to the US, followed by 18.8% to Vietnam, 10.9% to Pakistan, 9.4% to Bangladesh and 3.1% to the Philippines. Latest trend: on shoring to US General Electric USD38 million plant in Louiseville/ 1,300 American jobs by 2014 Lenovo 1 st PC plant in the US in North Carolina early 2013/ 115 American jobs
Four Major Air Cargo Markets The Lower Yangtze River Delta (Shanghai) dominates the mainland Chinese air cargo market followed by the PRD Beijing-Bohai Western China Lower Yangtze River Delta Pearl River Delta
Top 20 Cargo Airports in China (2011 by weight) 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0
The Air Cargo Development Growth Comparison by Region in China (2008 2011) 80.00% 70.00% 60.00% Perl River Delta Central West Beijing Bohai 50.00% 40.00% Yangtze River Delta 30.00% 20.00% 10.00% 0.00%
The Air Cargo Airlines in China By the end of year 2011, there are 11 cargo airlines, the top three s cargo transportation volume is 50% of total. There are 91 pure freighter aircraft. In the year 2011,the air cargo volume is 5.58million ton, which is as 11.6% of total 100 90 80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 中小型货机 0 0 4 10 12 17 23 30 37 40 45 大型货机 8 11 12 14 17 26 32 37 39 47 38 The market share in different cargo airlines in China 大型货机 中小型货机 The type of air cargo aircraft 10
The Number and the Type of Pure Freighter Aircraft Cargo flights of Chinese mainland airlines in 2011 Type of aircraft Number Commercial load (t) Total payload (t) 2013/9/6 B747-400F 28 110 3080 B747-200F 3 100 300 MD11F 3 75 225 B777F 12 105 1260 A300F 3 39 117 B757-200F 7 40 280 B737F 35 16 560 Total 91 5822 Note: By the end of 2011, there are 1764 aircrafts of Chinese mainland airlines, of which 91 are all-cargo aircrafts, 5 more than the previous year, with total commercial load of 5822t, with an increase of 2.8% over the previous year; the passenger aircraft belly has a capacity of about 11,000t, with an increase of 11.6% over the previous year. 11
Shares of the Market Freight volumes of Air China, China Eastern Airlines, China Southern Airlines and Hainan Airlines Group of the total of Chinese mainland airlines in 2011 are respectively 31%, 27%, 20% and 10%. Others Hainan airlines Air china China Southern China eastern group Figure 3 Cargo market shares of domestic airlines in 2011 12 201
Chinese Airlines vs. Foreign Airlines Market Share In 2011, the international volume of air cargo in China was 4.76 million tons. The share of Chinese airlines was only 29%; while foreign carriers accounted for 71%. 70.9% 29.1% 13
The Yield Comparison between Chinese and Foreign Airlines Chinese airline yields are much lower 美分 34 32 30 28 26 28.15 28.90 25.64 29.69 31.82 31.20 24 22 20 CA CK CZ SQ KE CX 国航东航南航新航大韩国泰 货邮运输吨公里收益 14
Trends and strategies of the market Market trends: situation this year TOTLW VOLUME AIR PAX VOLUME AIR CARGO VOLUME 15 201
Market strategies As for mainland cargo enterprises: Strengthen overseas marketing Pay attention to emerging markets Expand high-priced businesses Develop aviation logistics Promote reorganization 16 201
THANK YOU 田建文 (Jane Tian) Tel: 13811852212 jwtian@163.com 2013/9/6