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    China's carriers push further abroad in 2015, but still lag in some markets

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    2015-12-18 09:01Global Times Editor: Li Yan

    With the curtain coming to a close on 2015, it is the right time to wrap up the most eye-catching events in the aviation industry this year.

    Definitely, the most exciting is Chinese carriers' global expansions, and 2015 could end up being the busiest year ever for Chinese airlines.

    Compared with the past years when Chinese airlines focused more on domestic routes, the operators have been developing their networks globally in 2015. From North America to Oceania, from Africa to Europe, Chinese airlines, including more second-tier carriers, are expanding to the rest of the world faster than ever.

    Global map

    The aviation market between China and the US used to be dominated by US carriers, but this year, Air China has become the largest operator, exceeding its rivals.

    Other airlines, such as China Eastern, China Southern and Hainan Airlines, are also increasing their transportation capacity by deploying more wide-body airplanes, including the Boeing 777 and Boeing 787.

    European countries are also important battlefields.

    Other than Air China, which has been the largest operator in the European market, more second-tier carriers are also flocking there, including Capital Airlines under Hainan Airlines as well as Xiamen Airlines.

    Paris has become the European city with the most flights to and from the Chinese mainland.

    Private carriers are also exploring more opportunities in the Asia-Pacific region. The routes opened by budget airline Spring Airlines this year are nearly the same number as in the past years.

    Meanwhile, the "One Belt, One Road" initiative has also been a big driving force for the carriers.

    China Southern said on Tuesday that it has opened 96 routes in 52 cities among 34 countries and regions on the road - an increase of 12 percent in terms of the number of flights.

    In the first half of this year, Chinese airlines have opened 84 international routes, up 35 percent year-on-year, and they plan to open another 57 international routes in the second half, according to data from the Civil Aviation Administration of China.

    By the end of June, the airlines' international transport capacity increased 38.5 percent over the same period in 2014.

    Guangzhou-based China Southern launched two inaugural flights on Wednesday.

    The first one is from Guangzhou to Christchurch, New Zealand.

    The new service will offer direct, non-stop flights three times a week.

    China Southern will be the first Chinese airline scheduled to fly to South Island commercially.

    The second route is from Guangzhou to Rome, Italy, and the new service will be a stop-over flight via Wuhan, capital of Central China's Hubei Province. It will operate three times a week.

    Overseas corporation

    Besides the new routes, the cooperation between major Chinese airlines and overseas carriers has also been a highlight this year.

    In March, China Southern and Xiamen Airlines signed an agreement with KLM Royal Dutch Airlines to strengthen collaboration and accessibility between China and the Netherlands.

    In July, China Eastern agreed to expand its partnership with US-based Delta Air Lines Inc. The 15-year deal included a $450 million investment by Delta.

    In addition, the Australian Competition and Consumer Commission agreed to the alliance between China Eastern and Qantas, and the two airlines will jointly operate routes between China and Australia.

    In September, the New Zealand government approved the code-sharing between Air China and Air New Zealand, and the cooperation will last for more than five years.

    The robust development is also evident in the listed companies' financial reports.

    For the five listed Chinese airlines, profits for the first three quarters of 2015 jumped at rates from 80 to 270 percent.

    Challenges

    Acknowledging those achievements, however, we can only say that the internationalization of Chinese carriers is still at an early stage, especially compared with rival airlines that have been exploring local markets for years.

    Although Chinese carriers are growing in some markets such as Japan and Australia, their market shares still lag in other regions.

    China's carriers are progressing, their rivals are getting bigger as well.

    Most European markets are shared among Lufthansa, British Airways and Air France-KLM Group. The Middle Eastern market remains dominated by carriers such as Emirates, Qatar Airways and Etihad Airways.

    Meanwhile, the African market is still also shared by established local or overseas carriers.

    Also, the percentage of high-end travelers for Chinese carriers is still lower than that of their overseas rivals, showing that Chinese airlines still have a lot to learn from their peers in sales channels and the marketing. How to better serve different groups with different policies is also crucial.

    The route expansion is the first step, but how to improve services and keep a steady income for the sustainable development are next problems Chinese airlines need to think about.

      

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