China

Chinese airlines start developing mutually beneficial solution through air-rail codeshare agreements

After two years of competing aggressively with the nation’s growing high-speed rail network, Chinese airlines are beginning to adopt a different approach: 'if you can't beat them, join them'. Mutually beneficial solutions are emerging in the form of air-rail codeshare agreements that could pave the way for foreign airlines to also tap into China's vast interior even with a single gateway. China Eastern Airlines and Hainan Airlines are taking the lead, with the recent agreement between China Eastern and the Shanghai Railway Bureau and between Hainan Airlines and Yuehai Railway.

The moves are changing the relationship between airlines and rail, following a model successfully introduced in the European market. Using rail operations as an alternative to some short-haul feeder services will enable airlines to concentrate on longer routes (including international sectors), which is a key pillar of China’s aviation policy, while also enabling airlines to enhance their feeder traffic rather than losing this market to rail operators altogether. Direct rail links also increase airport (and airline) catchment areas for passengers that can allow them to be more competitive.

Xian Airport opens new terminal building with strong focus on retail growth

Xian Airport is representative of a new breed of airport terminal recently or currently being developed across China. Xian Airport's new Terminal 3 is being constructed with the dual purpose of preparing for a massive increase in air travel demand, while also having a strong focus on developing non-aeronautical/retail revenues.

China’s seventh largest airport by capacity, Xian Xianyang International Airport, officially opened its 230,000 sqm terminal three (T3) building and 3800m second runway on 03-May-2012, increasing the airport’s capacity to 33 million p/a. The airport, a growing western China airport hub, handled 21 million passengers in 2011, making it the country’s eighth largest airport by passenger numbers, although it ranks much lower in terms of China's largest international gateways.

With a growth rate of around 18%, Xi’an was the third fastest growing major airport in China (airports with more than 10 million annual pax) behind only the smaller Shijiazhuang and Shenyang airports. Growth is expected to continue at the airport, which is one of eight in China with annual passenger numbers of more than 20 million in 2011.

Hub airports still more attractive, as Beijing's growth slows, affected by the economy and HSR

Airports Council International (ACI) has provisionally released its annual list of the world’s busiest airports for 2011. While there is equal representation from the Americas, Europe and Asia Pacific throughout (and specifically in the top 10) the 2011 the list is notable for the way Beijing Airport has retained its second position behind Atlanta, but growth slowed there in 2011.

Meanwhile the US' southern hub managed a small growth margin of its own that was equivalent to a small airport’s entire annual throughput, to maintain a 15 million passenger cushion over Beijing, where economic factors and high-speed rail (HSR) came into play. But sadly for the US, that country's airports will not have similar levels of competition from HSR to China's.