The Development Status and Trends of China’s Civil Aviation

General Overview of China’s Civil Aviation

China’s civil aviation industry is composed of the General Administration of Civil Aviation of China(CCAC), the China Air Transport Association(CATA), state-owned aviation companies, and private aviation companies. At the end of 2020, there were 64 shipping airlines in China, increasing 2 net over the end of the year, divided by different all kinds of categories: 94 state-owned holding companies, 15 private holding companies. Among all transport airlines, 11 full cargo airlines, 9 Sino-foreign joint venture airlines, 8 listed companies

According to the 2020 Statistical Bulletin on the Development of China’s Civil Aviation Industry, As of 2020, China Airlines has ranked second in the world for 15 consecutive years. More specifically, since the 21st century, China has fully promoted the development of civil aviation industry from airport construction planning, aviation network layout, and air transport services. As can be seen from the data, 2013-2019, China’s regular flight lines, airport passenger throughput and goods throughput increased year by year. In 2019, China’s regular flight lines have exceeded 5,000; the throughput throughput of more than 1.3 billion passengers; the goods throughput also reached 1.7.1 million tons. As of 2020, China’s air transportation scale ranked second constantly in the world for 15 years.

China’s Civil Aviation Transportation Industry

In 2020, Covid-19 has caused a huge impact on the civil aviation industry. The whole industry clarifies that it is necessary to ensure safe operation in the post-epidemic era, guarantee emergency transport, guarantee risk control. It is because of the implementation of such policies, China Civil Aviation Industry is the first to rebound in the post-epidemic era, and China’s air transport market has become the fastest, the best air market in the world in the post-epidemic era.

In 2020, the whole industry completed the transportation turnover of 79.851 billion ton-km, down 38.3% over the previous year. The domestic route completed the transportation turnover of 58.767 billion ton-km, down 29.2% over the previous year, including 319 million kilometers of Hong Kong, Macao and Taiwan routes, declined over the previous year 81.1%; the international route completed the total turnover of the transportation of 2,108,300 million ton-km, down 54.5% over the previous year. The following graph is about the statistics of the total transportation turnover of China civil industry from year 2016 to 2020.

*Notes: the red line stands for the turnover weight over the previous year;

       the orange bar stands for the total transportation turnover of each year.

 In 2020, the entire industry completed the 63.1128 billion person-km passenger turnover than the previous year, 46.1% fell by the previous year, and domestic airlines completed the passenger turnover of 586.8887 billion person-km, fell by 31.1% over the previous year, including 12.83, Hong Kong, Macao and Taiwan routes 12.83 100 person-km, down 92.0% over the previous year; international route completed the passenger turnover of 44.241 billion person-km, down 86.1% over the previous year, mainly caused by the Covid-19.The following graph is about the statistics of the total passenger turnover weight from year 2016-2020.

*Notes: the red line stands for the turnover weight over the previous year;

       the orange bar stands for the total passenger transportation turnover of each year.

Flight Hours and Take-off Sorties of China’s Civil Aviation Industry

In 2020, transport airlines in the whole industry completed 8.762 million flight hours, down 28.8 percent from the previous year, and domestic routes completed 7.822 million flight hours, down 20.5 percent from the previous year. Among them, 35,500 hours of flights between Hong Kong, Macao and Taiwan were completed, down 82.3% from the previous year. International flights completed 879,900 hours, down 63.3 percent from the previous year.

The Current Economic Revenues of China’s Civil Aviation Industry

   According to preliminary statistics, in 2020, due to the impact of COVID-19, the industry achieved a total revenue of 624.691 billion yuan, down 41.1% from the previous year; Total profit reached -97.432 billion yuan, 151.943 billion yuan less than the previous year. Among them, airlines achieved operating revenue of 375.502 billion yuan, down 41.9 percent from the previous year; Total profit reached -79.446 billion yuan, 105.193 billion yuan less than the previous year. The actual operating revenue of the airport was 88.297 billion yuan, down 28.1% compared with the previous year.

The General Introduction of China Airline Companies

   Here are the list of top 10 Airlines in China.

   What’ more, here will be brief introductions of the top 3 Airlines in China:

   Southern Airlines, founded in 1991, has the largest number of transport aircrafts, the most developed route network and largest annual passenger volume in China. Its annual passenger traffic ranks first in Asia and third in the world. Southern Airlines is the world’s first airline to operate both Airbus A380 and Boeing 787. By year January 2021, the total fleet size of China Southern Airlines has reached more than 800 aircrafts.

   Eastern Airlines, is a wholly state-owned company under the direct jurisdiction of the Central Government. It is also a state-owned asset of The State Council, China Northwest Airlines, and China Yunnan Airlines. As the first CAAC airline listed in Hong Kong, New York and Shanghai, China Eastern airlines has implemented the “hub network operation” strategy in its main air transport business, and established an air transport network with Shanghai as the center, relying on the Yangtze River Delta region, connecting the global market and paying equal attention to both passenger and cargo.

   Air China, founded in 1988, which is the main air transport company controlled by China National Aviation Group Corporation, and together with China Eastern Airlines Co., LTD and China Southern Airlines Co., LTD, Air China is one of the three major airlines in China. Air China insists on customer-oriented innovative services, and has successively launched a series of new products such as “Flight Steward” and “Air China Unlimited”. Air China has a strong domestic and international transport capacity and sales network, with a wide range of high-quality customer groups, has become the choice of many Chinese government agencies and corporate business customers. On June 28, 2011, Air China was awarded the four-star certification by Skytrax, an international authoritative service rating agency.

Impact and Recovery After Covid-19 – Capacity Analysis of Each Airline Company

(*The following statement is based on the domestic Airlines Development Report , 2020)

In 2020, the overall normal flight rate of domestic airlines was 85.91%, and the average arrival delay time was 11.54 minutes. In 2020, the total passenger load factor of domestic airlines was 79.65%. Among them, the passenger load factor in September was the highest and that in February was the lowest. Spring Airline’s utilization rate ranked first among the major airlines

In 2020, there will be 41 passenger airlines with actual flight capacity in mainland China (excluding Hong Kong, Macao and Taiwan region, hereinafter referred to as domestic airlines), and no new airlines will be launched in 2020.

In 2020, the actual flights of domestic airlines were 3.577 million, 26.63% lower than that of 2019; The operating capacity is 634.36 million, down 27.28% year on year; The number of available seat kilometers is 835,858 million, down 36.31% year on year.

China Southern Airlines ranked first in flight volume/capacity, and achieved year-on-year growth in domestic flight sorties and capacity in autumn and spring.

The top 10 airlines in the actual annual flight volume in 2020 are China Southern Airlines, China Eastern Airlines, Air China, Shenzhen Airlines, Xiamen Airlines, Hainan Airlines, Sichuan Airlines, Shan Airlines, Spring Airlines, and China Amc. China Southern airlines returned to first place in flight volume, and China Airlines entered the top 10 for the first time.

The total number of flights operated by Spring Airlines and China Airlines decreased by 5.09% and 8.33% respectively compared with the same period in 2019, which were the two major airlines with the least year-on-year decline. In spring and Autumn, the domestic flight volume increased the most, with a year-on-year increase of 23.81%, and it was the only airline that realized the year-on-year growth of domestic flights among the major airlines. Air China’s international/regional flight volume decreased by 70.02% year on year, which was the least among the major airlines.

As for the other airline companies, Jixiang Airlines invested the most capacity, while Changlong and Tianjiao achieved year-on-year growth in sorties and capacity. In 2020, among 31 other airlines (excluding the top 10 airlines in terms of flight flights), Jixiang Ranked first in terms of total flight flights (94,200 flights) and total capacity (16.97 million seats). Among the 31 other airlines, only Long Airlines (6.04%) and Tianqiao Airlines (255.86%), which was newly launched in July 19, saw year-on-year growth in flights. Only Changlong Airlines (5.3 percent) and Tianjiao Airlines (255.63 percent) saw their total capacity increase.

Changes of Number of Routes for Each Airlines under the Influence of Covid-19

  Among the major airlines, China Eastern Airlines has the largest number of routes (988), including 892 domestic routes and 96 international/regional routes, all of which rank first among the major airlines. In 2020, the number of domestic routes of China Eastern Airlines increased by 20, while the number of international/regional routes decreased by 75 compared with 19 years ago.

Among the major airlines, the number of domestic routes of HNA airlines, Sichuan Airlines and Shenzhen Airlines has been reduced, among which HNA Airlines has reduced the most (62); All major airlines reduced the number of international/regional routes, with China Eastern airlines cutting the most (75).

Compared with the previous 19 years, China Airlines increased 130 domestic routes, and only reduced 3 international/regional routes, performing the best among the major airlines.

Among other airlines, Tianjin Airlines operates the most total routes (230), including 224 domestic routes and 6 international/regional routes. Juneyao Airlines operates the most international/regional routes (22). In 2020, tianjin Airlines reduced the number of domestic routes by 38 and international/regional routes by 3. Juneyao Airlines has reduced 5 international/regional routes.

Of the 31 other airlines, the number of domestic routes increased for 15, remained unchanged for 2 and decreased for 14; Two international/regional routes saw growth, 11 remained unchanged and 8 saw a decline. The domestic routes of Tianjin Airlines were reduced the most (38), and the international/regional routes of East China Sea Airlines were reduced the most (11). The number of domestic routes of Changlong Airlines increased the most (55), while the number of international/regional routes of Chongqing Airlines increased the most (11).

The New Trend of China Aviation

While winning the world’s praise, China still maintains a humble attitude, fully aware that China’s civil aviation industry will face the challenge of insufficient resource stock and diversified demand increment. As early as September 2017, The Civil Aviation Administration of China (CAAC) emphasized in the work conference on accelerating the construction of civil aviation infrastructure that it should accelerate the construction of civil aviation infrastructure, promote the construction of smart airports, safe airports and green airports, and promote the speed of digital transformation of China’s civil aviation industry.

China has been building the smart airports in China’s major cities, such as Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu. The smart airport is referring to the airport by the Internet of things, cloud computing, big data, such as mobile Internet technology, to establish a set of intelligent system based on digital system, with intelligent digital, intelligent information, business intelligence and service interconnection, In this way, it can achieve the goals of improving airport operation efficiency, improving passenger service level, creating value and benefits, optimizing management decisions, and improving emergency response capacity.

For instance, Beijing Daxing International Airport and Chengdu Tianfu International Airport have become the two most representative new smart Airport projects in China. Both of them take the operation and management concept of “Airport 3.0 Smart Airport” as the construction goal. Its intelligence is reflected in the extensive and convenient coordinated operation, data-driven non-aviation business development, pre-emptive safety management, visual management based on “one map”, seamless integrated traffic management, comprehensive and timely passenger service, unified and shared information resource management and energy saving and environmental protection green airport.

With the rise and development of smart airport, more and more enterprises have started to set foot in this field by taking advantage of their own advantages. Among them, Huawei, as a major communication solution provider, has launched cooperation with Shenzhen Airport and Western Airport Group by taking advantage of ICT technology. Baidu makes full use of AI, big data and other technical advantages to jointly build smart airports with Beijing Capital Airport, Meilan Airport and other airports; Alibaba and Tencent have taken advantage of the cutting-edge technology of Internet payment technology to implement Alipay face payment, wechat small program in major airports across the country; Venture capital firms use their capital advantages to invest in companies with growth potential.

In addition, from the perspective of future development trend, factors such as sustained and stable growth of national economy, rapid development of tourism, accelerated urbanization process and upgrading of resident consumption are the main driving forces for the development of China’s aviation market. More international routes will be opened in China and the proportion of wide-body aircraft production will increase as economic exchanges and trade increase due to the Belt and Road Initiative, strong demand for international travel among residents and the international competitiveness of Chinese airlines continues to strengthen. In a word, the huge market demand determines that China’s civil aviation industry has a huge space for development.