Page 232 - 2018 White Paper on the Business Environment in China
P. 232
8 White Paper on the Business Environment in China
China will need more airplanes. According to data years of expansion can’t quite accommodate everybody.
from the Civil Aviation Administration of China (CAAC), “Many of those delays are a result of the combined
487 million international and domestic journeys flew in capacity challenges and restricted access to air space
the country in 2016. That’s a 12 percent increase from the for commercial services in China, which creates the
previous year. A growing middle class of Chinese who operational challenges that the airlines face,” says John
are spending billions on vacations is fueling the surge Grant, Senior Analyst with OAG. “As you would expect,
in travelers. Trips add up when you have a population of the airlines, industry groups and air service providers
1.4 billion. Boeing estimates that the country will need a are trying to find solutions to these issues and improve
trillion dollars worth of new airplanes over the next two punctuality” (Jennings).
decades, including more than 5,100 of the same size as
China’s new C919 (Pham). The 168-seat C919 is roughly Weather is always volatile in China given its size and
the same size as Airbus’s A320 and Boeing’s 737-800— number of microclimates, causing some flights to wait.
the most popular airliners in the world—and made by That explains why a lot of the waiting takes place after
the Commercial Aircraft Corporation of China (Comac). everyone’s on the plane and even after it pulls back from
The country is already an adept designer of military the gate. Another reason for last-minute delays, according
aircraft, but has sought to catch up to Boeing in the U.S. to academic researchers ZhangYu and Zhao Lifei, is China’s
and Airbus in Europe in manufacturing civilian airliners. secretive air force controls the skies. Military planes might
It hasn’t been easy. The country’s state-owned airlines suddenly need a civilian flight path. Airlines never tell
first signed up to buy the jet in 2010, and it was originally this to their passengers, because the military operates
supposed to enter service in 2016. The prototype wasn’t largely in secret. The most complicated reason for falling
unveiled until November 2015, and the project has been aviation on-time performance is simply that more and
beset by technical delays as China learns the ropes of more people are flying. In 2014, for example, airlines in
airliner development. Comac, a state-run enterprise, has China handled 391.95 million trips, up 10.7 percent from
partnered with western suppliers for nearly all the jet’s 2013. Airline punctuality was only 80 percent in 2009. The
major systems to share technology and learn how to percentage of on-time flights fell every year from 2010 to
mass-produce an airliner. The C919’s main customers will 2015. Airlines have naturally rushed in to accommodate
be China’s domestic airlines. China Eastern Airlines will be rising demand, creating an air traffic control glut. China’s
the first carrier to operate the C919 when it completes total air transport fleet will triple from 2015 to 2035 and
testing and secures approval from China’s aviation receive 13 percent of world aircraft deliveries, Zhang
regulator (Ostrower). China’s 55 domestic airlines are and Zhao say. But capacity at major Chinese airports is
expected to be major buyers of the C919. So far, demand “nearly full.” The Civil Aviation Administration of China
for the jet has remained local: orders are almost entirely banned airports in Beijing, Shanghai and Xiamen from
from Chinese carriers for domestic flying. adding flights while curbing two regional airlines from
making new applications to help ease the excess wait.
The C919 may be a good takeoff, but the aviation Odds of timely takeoffs are already getting higher in
industry as a whole has a long way to go. According to a couple places. On-time performance improved at
the International Air Transport Association, one third of the airport in Guangzhou, China’s major southern city,
all flights in the country were delayed in 2015 (Pham). The from 56.4 percent to 64.9 percent in 2017 over the year
problem that Chinese state media say became obvious in ending in April while it saw 6 percent more flights. On-
2009 and hasn’t improved since then. At a lot of airports, time performance went up 47 percent to 60 percent over
British air travel intelligence company OAG said it even the same year on 8 percent more traffic in Shenzhen
got worse in 2016 at several airports. Only two of China’s (Jennings). This is good news since the Asia-Pacific region
top 10 airports improved on-time performance in April stood out in terms of its overall increase in domestic traffic
2017 over the same month in 2016. The most likely last year. The region as a whole saw growth of 8.7 percent
places to get a late flight are Beijing and Shanghai. There for the first quarter of 2017 from the same time in 2016.
is no single reason why this is happening, but the core Besides strong first quarter gains at Beijing, 6.8 percent,
cause is that there are too many people rushing into a and Shanghai, 7.6 percent, Guangzhou, Chengdu, and
cramped space. China has too many eager airlines, a Kunming—major airports serving the Chinese domestic
growing number of passengers and the air force wanting market—saw passenger traffic jump 12.2 percent, 10.5
its own way, all superimposed on airports that despite percent and 14.5 percent respectively (Töre).
232
China will need more airplanes. According to data years of expansion can’t quite accommodate everybody.
from the Civil Aviation Administration of China (CAAC), “Many of those delays are a result of the combined
487 million international and domestic journeys flew in capacity challenges and restricted access to air space
the country in 2016. That’s a 12 percent increase from the for commercial services in China, which creates the
previous year. A growing middle class of Chinese who operational challenges that the airlines face,” says John
are spending billions on vacations is fueling the surge Grant, Senior Analyst with OAG. “As you would expect,
in travelers. Trips add up when you have a population of the airlines, industry groups and air service providers
1.4 billion. Boeing estimates that the country will need a are trying to find solutions to these issues and improve
trillion dollars worth of new airplanes over the next two punctuality” (Jennings).
decades, including more than 5,100 of the same size as
China’s new C919 (Pham). The 168-seat C919 is roughly Weather is always volatile in China given its size and
the same size as Airbus’s A320 and Boeing’s 737-800— number of microclimates, causing some flights to wait.
the most popular airliners in the world—and made by That explains why a lot of the waiting takes place after
the Commercial Aircraft Corporation of China (Comac). everyone’s on the plane and even after it pulls back from
The country is already an adept designer of military the gate. Another reason for last-minute delays, according
aircraft, but has sought to catch up to Boeing in the U.S. to academic researchers ZhangYu and Zhao Lifei, is China’s
and Airbus in Europe in manufacturing civilian airliners. secretive air force controls the skies. Military planes might
It hasn’t been easy. The country’s state-owned airlines suddenly need a civilian flight path. Airlines never tell
first signed up to buy the jet in 2010, and it was originally this to their passengers, because the military operates
supposed to enter service in 2016. The prototype wasn’t largely in secret. The most complicated reason for falling
unveiled until November 2015, and the project has been aviation on-time performance is simply that more and
beset by technical delays as China learns the ropes of more people are flying. In 2014, for example, airlines in
airliner development. Comac, a state-run enterprise, has China handled 391.95 million trips, up 10.7 percent from
partnered with western suppliers for nearly all the jet’s 2013. Airline punctuality was only 80 percent in 2009. The
major systems to share technology and learn how to percentage of on-time flights fell every year from 2010 to
mass-produce an airliner. The C919’s main customers will 2015. Airlines have naturally rushed in to accommodate
be China’s domestic airlines. China Eastern Airlines will be rising demand, creating an air traffic control glut. China’s
the first carrier to operate the C919 when it completes total air transport fleet will triple from 2015 to 2035 and
testing and secures approval from China’s aviation receive 13 percent of world aircraft deliveries, Zhang
regulator (Ostrower). China’s 55 domestic airlines are and Zhao say. But capacity at major Chinese airports is
expected to be major buyers of the C919. So far, demand “nearly full.” The Civil Aviation Administration of China
for the jet has remained local: orders are almost entirely banned airports in Beijing, Shanghai and Xiamen from
from Chinese carriers for domestic flying. adding flights while curbing two regional airlines from
making new applications to help ease the excess wait.
The C919 may be a good takeoff, but the aviation Odds of timely takeoffs are already getting higher in
industry as a whole has a long way to go. According to a couple places. On-time performance improved at
the International Air Transport Association, one third of the airport in Guangzhou, China’s major southern city,
all flights in the country were delayed in 2015 (Pham). The from 56.4 percent to 64.9 percent in 2017 over the year
problem that Chinese state media say became obvious in ending in April while it saw 6 percent more flights. On-
2009 and hasn’t improved since then. At a lot of airports, time performance went up 47 percent to 60 percent over
British air travel intelligence company OAG said it even the same year on 8 percent more traffic in Shenzhen
got worse in 2016 at several airports. Only two of China’s (Jennings). This is good news since the Asia-Pacific region
top 10 airports improved on-time performance in April stood out in terms of its overall increase in domestic traffic
2017 over the same month in 2016. The most likely last year. The region as a whole saw growth of 8.7 percent
places to get a late flight are Beijing and Shanghai. There for the first quarter of 2017 from the same time in 2016.
is no single reason why this is happening, but the core Besides strong first quarter gains at Beijing, 6.8 percent,
cause is that there are too many people rushing into a and Shanghai, 7.6 percent, Guangzhou, Chengdu, and
cramped space. China has too many eager airlines, a Kunming—major airports serving the Chinese domestic
growing number of passengers and the air force wanting market—saw passenger traffic jump 12.2 percent, 10.5
its own way, all superimposed on airports that despite percent and 14.5 percent respectively (Töre).
232
