China Eastern Airlines
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- 2550 Hongqiao Road, Hongqiao International Airport
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- Shanghai Pudong Airport
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- Part of China Eastern Air Holding Company
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All Nippon Airways
China Eastern Airlines
China Southern Airlines
China United Airlines
Delta Air Lines
Hong Kong Airlines
KLM Royal Dutch Airlines
Royal Brunei Airlines
Shanghai-based China Eastern Airlines is one of China's 'big three' state-owned airlines, with hubs at Shanghai's Pudong and Hongqiao airports, as well as Kunming Airport in southwest China. The airline operates a fleet of Airbus, Boeing, Embraer and Bombardier aircraft to support an extensive network, serving over 350 domestic routes and 40 international destinations, including cities in Australia, Europe, Korea, Japan, North America and Southeast Asia. China Eastern merged with Shanghai Airlines in 2010 and joined China Southern in the SkyTeam Alliance in Jun-2011.
Location of China Eastern Airlines main hub (Shanghai Pudong Airport)
China Eastern Airlines share price
4,642 total articles
342 total articles
Airline groups are now common, if not ubiquitous in Asia today. Their evolution, still often at experimental stage, involves addressing issues like multiple brand management, connectivity, coordination and associated issues. They are not easy to manage, but appear to be generating some success as established full service airlines adapt to new marketplace conditions.
Part 1 of this analysis of northeast Asian airline groups, with their "houses of brands", covered Mainland China and Hong Kong.
Part 2 reviews the courses being followed by airlines in Taiwan, Japan and Korea. Each of these markets has its own characteristics, influenced by domestic features, by government peculiarities - notably in Japan - and by the beliefs of the airline managements themselves.
Most Asian full service airlines have responded to LCC competition by establishing groups, in some ways similar to Europe's, but usually with greater differentiation in role and establishment. As a result they have for some time been houses of brands. There was typically limited consolidation in these sprawling mansions; there was also little coordination between the airlines in the group. This has led to redundancy, missed opportunities and confusing marketing. But the Asian market is dynamic, competitive pressures are increasing and constant adaptation is necessary. With experience now of these conditions more strategic thinking is emerging, along with the management resolve to shed complacency.
Brand consolidation is still some time off. Taiwan’s EVA Air and China Airlines are mulling consolidation with their respective regional arms UNI Air and Mandarin Airlines. But on the whole, the number of brands in Asia is growing, especially in mainland China. The initial changes at Asian airline groups include better coordination of group airlines.
China, along with instability in the Middle East and the latest health concern, have become catch-all excuses for those looking to describe the challenges faced by aviation. Concerns elsewhere may be legitimate and, in the case of Brazilian economic weakness, showing serious impacts.
Yet China’s aviation outlook is more than just bright; it is arguably the strongest it has been in its history. Chinese aviation is heading for an upturn over the next few years as part of its 'golden era' of development, forecast to run for perhaps 10-15 years.
International operations are producing growth and change on a profound scale, from the sheer size of the market to impacts on partnerships and global alliances. The domestic market continues to be delineated by the State-owned and private airlines. A rush of start-ups is under way, some of them better models than others. The shift to low cost output continues apace.
Asia's airlines are embarking on what they see as once-in-a-lifetime long haul growth. Since 2014 there has been an acceleration of new long haul destinations. In the seven years before 2014 airlines in Northeast Asia – excluding mainland China – opened 19 destinations that are still served in 2016. In the three years since 2014 they have opened, or intend to open, 24 markets. All Nippon Airways and Cathay Pacific show the largest growth, opening nine destinations each. Most recently announced was Mexico City for ANA in 2017.
Mainland Chinese airlines are setting even higher records – opening 75 long haul markets since 2006. Air China is opening 17 markets, followed by Hainan Airlines with 16 markets. Of the 75 destinations, 51 were opened only from 2014. Southeast Asia is a story of contraction. Malaysia Airlines used to be the third largest airline for non-Asian destinations but now Sichuan Airlines has just as many as Malaysia. Philippine Airlines and Singapore Airlines have added markets, but for SIA this has resulted in modest net growth.
HNA/Hainan Airlines' 13% stake in Virgin Australia for USD114 million expands HNA's equity airline network outside mainland China to nine airlines on five continents – two airlines more than Etihad has invested in. Even once HNA grows the Virgin Australia stake to 19.99%, as it intends, it will not be HNA's largest in equity or percentage; but it is the most momentous and strategically important yet. It is accompanied by a strategic alliance, subject to approval, through which Virgin Australia will fly to mainland China and Hong Kong.
HNA's past investments have either not met their originally anticipated strategic value (Aigle Azur) or are airlines (Africa World, Comair) that do not have HNA services and are unlikely to be significant in the near future. HNA's Virgin stake is different: Australia is China's largest outbound long haul market after the US but Hainan has had a limited presence. Hainan has previously focused on the US market while regulatory constraints (in both mainland China and Hong Kong) and lack of partnerships have restricted growth.
There can be no doubt about the long-term growth opportunity for Chinese airlines in long haul markets. But the short term is challenged by air traffic rights being exhausted or nearly utilised in key markets such as Canada, Germany and the US. The foreign parties have sticking points – slots, overflight rights – that are not easily solved, meaning that Chinese airlines could face a few years of dancing around bilaterals that are maximised, or they may experience only incremental growth.
Yet widebody aircraft deliveries are growing. The four main Chinese airlines – Air China, China Eastern, China Southern and Hainan – will take 22 further widebodies in 2016, 18 in 2017 and then 37 in 2018. These are official figures and exclude pending deals (10x 777-300ERs for China Eastern) as well as aircraft that appear on order books at the last minute. This also excludes the growing widebody operation at secondary airlines such as Beijing Capital Airlines, Tibet Airlines and Xiamen Airlines. Air China and China Eastern have 50-80% as many widebodies on order as they do in service.