Where have all the passengers gone?

China is undergoing a slowdown in airline traffic and car sales as the financial slump starts to pinch.

Carlos Gomes, economist at Bank of Nova Scotia, cut his forecast for U.S. auto sales to 13.7 million vehicles this year and 13.5 million units next year, saying Americans have little room to spend on big-ticket items because they’re already heavily indebted.

The latest evidence that China’s transport boom is hitting a wall came when the International Air Transport Association released figures showing Asia Pacific carriers had a 3.1% year-over-year drop in passenger traffic in August after a 0.5% decline in July. International freight traffic among the region’s cargo airlines, measured in freight tonne kilometres, fell 6.8%.

Analysts say the Games may also be responsible for a 6.2% drop in Chinese motor vehicle sales in August, the first decline in more than two years. The theory is that buyers shied away from dealerships and stayed home to watch TV instead.

GM executives are still predicting annual auto sales growth in China this year of about 12%. They argue the slowdown, also a result of a government-mandated hike in gasoline prices, won’t last.
Source: The Financial Post

Airbus SAS has announced plans to purchase up to $1 billion of aeronautic components from China by 2020.

According to CEO Tom Enders, the company was ‘already in a steep first year to increase its sourcing’ - which may not be grammatical but the meaning is clear — with plans to ‘triple it’ in two years and double it again ‘three, four or five years later’.

Enders also explained that Airbus maintained 95% of its workforce in Europe and noted unions and politicians ‘wanted to keep it that way’.  But he emphasised that the company couldn’t ‘keep it all [the workforce] in Europe or the US’.

Airbus recently began shipping segments for assembly at the Tianjin plant — its first assembly line outside Europe. The assembly factory is reportedly a $600 million venture between Airbus and a Chinese consortium composed of the Tianjin Free Trade Zone and China Aviation Industry.

The company is also awaiting government approval of a 280-aircraft order with Chinese airlines that includes A320, A330 and A350 models. Airbus, which estimates that China may require 3,000 planes over the next 20 years, plans to rapidly increase its presence in Morocco, Mexico, India and Russia.
Source: ITExaminer

Jet engine for a Chinese carrier

Chinese airlines started their fourth-quarter operation with a good news — lower jet fuel price.

In the forth quarter, jet fuel price on the Chinese mainland was lowered to RMB7,750 ($1,138) per ton, nearly 6.9% or RMB570 ($83.7) less than in the third quarter.

As of 2007, China’s domestic jet fuel has been usually adjusted quarterly in accordance with the price fluctuation of international jet fuel.

Zhang Wei, an industry insider with the Chinese Ctrip.com website, said the cut resulted from a price drop on the international crude oil market.

Zhang Wei, said, ‘Investors are worried that demand for crude oil is becoming weak, which brings down the oil price. To the aviation industry, domestically and globally, lower oil price. ‘ He also suggest that this might be a turning point.

Fuel cost accounts the biggest part, about 50%, of the operating cost among Chinese airlines.
Source: China View

Smiling service

China Eastern Airlines currently connects two Indian cities, Delhi and Kolkata, with Shanghai, Beijing and Kunming in China.

It is now planning to increase its frequency of operations to India from next month.

The airline will add one more flight on its Delhi-Shanghai-Beijing route, which currently has a frequency of four flights a week.

It will also increase the frequency from three flights a week to daily on the Kolkata-Kunming by the end of next month.
Source: TravelBiz.com

Airbus 380 giving double decker comfort

Airbus Chief Executive Thomas Enders has said the company’s dominance of the global aviation industry alongside Boeing is destined to end as China and Russia develop their abilities to produce large commercial aircraft.

Speaking on a panel at the World Economic Forum in Tianjin, he said, ‘I hope we will be able to cooperate with them, and we will be fierce competitors in other areas.’

China has set a target of 2020 for production of aircraft that will seat more than 150 passengers, which could compete against Boeing and Airbus.
Source: CNNMoney.com