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Consolidation and high-speed rail squeezing out China’s second-tier carriers?

China’s second-tier carriers are hard at work at present, rapidly expanding their domestic and (in some cases) international route networks. However, the vast majority of these airlines are now doing so under the control of the "Big Three" carriers and/or HNA Group, as consolidation accelerates in China. As such, China’s airline evolution is at a very interesting stage. Where previously the major airlines: 1) established considerable branch carrier networks to serve diverse geographic areas in China; and 2) eliminated brands of the acquired airlines, they now appear to be looking more strategically at segmenting the market, retaining the second-tier carrier brands, particularly those focused on tourism/leisure markets. [11295 words]

This report contains the following subheadings:

• High-speed rail links taking over
• South Korea and Taiwan domestic traffic slashed by high-speed route
• Consolidation continuing
• Shenzhen Airlines: Air China takes over
• Spring Airlines refuses Air China offer, planning IPO for 2011/12
• Shandong Airlines’ net profits continue to rise
• Xiamen Airlines reports 23rd consecutive profit for 2009
• Juneyao Airlines reports 839% improvement in net profit in 2009
• Juneyao Group sells Okay Airways
• Okay Airways resumes operations after change of ownership
• Tianjin Airlines planning to take delivery of at least one aircraft every month
• Shanghai Airlines now under China Eastern’s wing
• Sichuan Airlines expands domestic bases
• Northeast Airlines taken over by Sichuan Airlines
• Lucky Air moves to new Kunming base
• China United Airlines expanding from Beijing Nanyuan base
• China United Airlines route changes
• Capital Airlines, the new face of Deer Air
• Chengdu Airlines, the new face of United Eagle
• Henan Airlines, the new face of Kunpeng Airlines
• West Air expanding from Chongqing base
• Joy Air feeling effects of rail competition
• Grand China Air completes capital raising
• China Express Airlines expands from Chongqing and Shenyang

This report contains the following charts and tables:

• China’s current and future high speed rail network
• South Korea annual domestic airline capacity: 2001 to 2009
• Taiwan annual domestic airline capacity: 2001 to 2009
• China domestic capacity breakdown by carrier (seats per week and as % of total): Independent carriers in bold
• Second-tier carriers passenger numbers: Apr-2008 to Apr-2010
• Shenzhen Bao’an International Airport capacity share by carrier
• Shenzhen Airlines route changes: Feb-2010 to May-2010
• Shenzhen Airlines aircraft orders: 2010 to 2014
• Spring Airlines route changes: Jan-2010 to May-2010
• Shanghai capacity share by carrier
• Spring Airlines aircraft orders: 2010 to 2014
• Shandong Airlines financial highlights: three months ended 31-Mar-2010
• Shandong Airlines revenue growth vs passenger numbers growth: 1Q2008 to 1Q2010
• Shandong Airlines financial highlights: 12 ended 31-Dec-2009
• Shandong Airlines operating margin vs net margin: 1Q2008 to 1Q2010
• Shandong Airlines route changes
• Jinan Yaoqiang International Airport capacity share by carrier
• Shandong Airlines fleet details
• Xiamen Airlines route changes
• Xiamen Airlines capacity (seats) share by airport
• Xiamen Gaoqi International Airport capacity share by carrier
• Juneyao Airlines passenger numbers: Apr-2009 to Apr-2010
• Juneyao Airlines route changes
• Okay Airways route changes
• Tianjin Binhai International Airport capacity share by carrier
• Tianjin Airlines fleet plans: 2010 to 2012
• Tianjin Airlines route changes
• Shanghai Airlines route changes
• Kunming Wujiaba International Airport capacity share by carrier
• Sichuan Airlines route changes
• Northeast Airlines route changes
• Kunming Wujiaba International Airport capacity share by carrier
• Lucky Air route changes
• Capital Airlines route changes
• Beijing capacity share by carrier
• Chengdu Airlines route changes
• Chengdu Shuangliu International Airport capacity share by carrier
• Henan Airlines fleet plans: 2010 to 2014
• Zhengzhou Xinzheng International Airport capacity share by carrier
• West Air new routes
• Chongqing Jiangbei International Airport capacity share by carrier
• Xi’an Xianyang Airport capacity share by carrier
• Haikou Meilan International Airport capacity share by carrier
• China Eastern Airlines route changes

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