In China aviation there is an odd paradox. While all over the world air fares are climbing, routes are being cut and services terminated in China the fares to elsewhere are very low. Indeed, as low as they have been for some time. This will not last long.

It is possible, as suggested by Fons Tuinstra of China Herald that these latest price cuts are due to the restrictive visa policies which have hurt inbound travel to China.

At the same time some other airlines flying to other parts of Asia are also hurting. On the golden route London-Bangkok-Sydney the load factor has been a consistent 100% for so long it was thought to be immutable. Wrong. Flights now have spare seats. On a BA flight to Bangkok last week the writer had three seats to himself. And that has not happened for many years.

And despite the low prices being quoted on long flights at the moment the affects of the price of oil in there if you care to look for them.

Some Chinese carriers are cutting flight capacities to trim losses. Apart from totally suspending routes from Guangzhou to Ho Chi Minh City, Hanoi, Angkor, and Phuket, China Southern is also reducing capacity on its flights to 11 international destinations, including Los Angeles, Paris, Sydney and Singapore.

Loss-making Shanghai carrier China Eastern is set to follow suit.

Hong Kong International Airport is worried that direct travel links between the mainland and Taiwan could cause it to lose 6% of its traffic and about HK$3 billion in travel revenue each year. Perhaps more if Chinese airlines decide to trim their flights.

There will be much, much more of this before the party is over.
Source: Shangiist

China Southern Airlines Chairman Liu Shaoyang stirred up speculation that Air France might take an equity stake in the Chinese carrier as the two airlines entered into a framework agreement for their cargo joint venture. As reported by the South China Morning Post he said, ‘There will be a sequel.’

This was at the International Air Transport Association annual meeting in Istanbul. He did not elaborate on his remark.

Although Air France only owns 25% of the joint venture — which is to be called AE Cargo — it will appoint the chief executive. This is seen as a reflection of the European carrier’s greater expertise in the international cargo market.

The joint venture is only the second between a European and a Chinese airline, following Jade International, a tie-up between Shenzhen Airlines and Lufthansa.

Will this go further? Will be seeing more and more of this? For sure. If you were to list the number of airlines which are going to trim unprofitable routes, delay purchases, go into defensive amalgamations with other airlines and you would probably have a list of every airline in the world.

It comes down, simply, to one thing — the price of oil. You could almost do a graph showing that the amount of turmoil — and that is the right word — in the world of aviation and from extension to the whole world of travel is controlled by the movement of that price. If it gets to $200 a barrel then the whole world of tourism and aviation will change — and probably change permanently.

The cargo plane at the top is Air France. And the hostesses here are China Southern. Yes, we could have used another picture of an air freighter but they are not inherently exciting.

Starting today, June 3, ten airlines from the mainland and Taiwan will make 19 round-trip flights for the traditional Duanwu, or Dragon Boat Festival which runs from June 3-15.

The Civil Aviation Administration of China said the mainland airports involved are in Beijing, Shanghai, Guangzhou and Xiamen, with one in Taiwan — Taipei.

Shanghai will have the most flights on the mainland, with 14 round-trip charter flights.

Carriers that will operate the flights are Air China, China Eastern, China Southern, Xiamen Airlines and Shanghai Airlines on the mainland, and China Airlines, Mandarin Airlines, EVA Air, UNI Air and TransAsia Airways in Taiwan.

Mainland people celebrate their first ‘official’ Dragon Boat holiday this year.

The State Council revised the official holiday schedule late last year to add three traditional festivals —Qingming, Duanwu and Zhongqiu — in response to public demand.

Interesting that the Dragon Boat Festival is probably the most international of all festivals from China. In fact it would be fair to say that dragon boat racing (sport and festival) is among the fastest growing of team water sports, with tens of thousands of participants in various organizations and clubs in over 60 countries.
Source: China View

The Canadian passenger aircraft Bombardier (surely they could give it a better name) may launch its proposed C- Series mainline aircraft at the Farnborough air show in July with about 200 orders — including several from a Chinese airline.

Jacques Kavafian of Research Capital says China Southern Airlines is one of several potential launch customers for the plane, designed to seat between 100 and 150 passengers.

He said China Southern is expected to order 100 aircraft this year — 50 of which could be the C-Series, with the other 50 being Bombardier’s popular Q400 turboprops.

China Southern’s main hub, in Guangzhou, is undergoing a major expansion and air traffic in the region is growing by 10% a year. The airline also has plans to launch regional flights.

Much depends on what happens to the price of oil but that appears to be the plan at the moment. If the order goes through the China Aviation Industry Corporation, which makes the Q400 fuselage, wil linvest US$400 million in the C-Series if the plane is launched. In return, Bombardier will assist with its development of the regional ARJ21-900 aircraft.
Source: CNN Money.com

China Southern Airlines expects to open 7-8 new international routes this year, expanding on a plan that saw it open 10 new foreign destinations in 2007. Chairman Liu Shaoyang said this year’s routes will originate mostly in Guangzhou and serve neighboring countries in Southeast Asia, in addition to a London flight scheduled to start in the fourth quarter.

It aims to increase the percentage of its revenue derived from international operations from the current 19% to 25%-30% in the next five years while expanding its fleet from 332 aircraft at Dec. 31, 2007, to 400 by 2010.

However, Chairman Liu Shaoyang said, domestic consolidation likely is necessary to maximize international competitiveness. He said Beijing is considering a reorganization of the domestic airline industry but a decision will not be made this year as carriers concentrate on August’s Olympic Games.

Last month he proposed a China Air Holding Co. that would hold stakes in China Southern, Air China and China Eastern Airlines and also would ‘be able to make investments in foreign carriers as well as conduct internal integration.’
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