What if I told you that China is projected to beat us in our own game. Yup, you heard me an article in aviation week said that China is projected to have the number 1 airline for commerical air travel by 2030. Statistics from the FAA show U.S. carriers had 704 million domestic and international passengers in 2009, and the forecast is for 1.21 billion by 2030. However, the Civil Aviation Administration of China has projected that Chinese carriers passenger numbers will increase from 230 million in 2009 to 700 million by 2020 and 1.5 billion by 2030.
Although China's internation airlines suffered last year, it's domestic travel still increased 22%, and is forecasted to be a growth of 17% this year.
There are 3 main state owned carriers in china, Air China, China Southern Airlines and China Eastern Airlines. All three reported heavy losses in 2008, as higher fuel prices took their toll, but the government, knowing how important is to the indusrty responded with bailouts. The other airlines in China, either merged or shutdown.
Something intresting I read is that the Chinease government, not the airlines get to choose which aircraft to order for the airlines. I can see why alot of companies can fail because of that.
Similiar to what the American Aviation indusrty is waiting for; NEXTGEN, China is expected to get their own NEXTGEN, except they will get their's much sooner than the US. They are expected to open up its low altitude airspace completely in 2015 to encourage more flights from private jets. Boeing's own projection is that China will spend US$600 billion on 5,000 new planes in the next 20 years. And it is targeting to win at least half of these new aircraft orders. That is surely to create many jobs in China, as they will be looking to expand both domestically and internationally.
I appreciate the facts about the Chinese airline industry. I did my blog about it too and I can understand why some businesses got out of the competition. However at the same time, the support that the Chinese government provides the industry is highly valuable. I can't imagine all that success without the aid of the government. That's why I believe that since the industry is being aided such a way, its future expansion and competitiveness are going to be unpredictable.
ReplyDeleteBased on the various and numerous available forecasts and researches about the Chinese aviation industry, I think we all agree that the Chinese aviation industry will grow and possibly grow rapidly within the next two decades. At the same time, we must understand that future expectation with respect to both the economy and the politics of that region will definitely play a major role. Ultimately, future politics is what will steer the future outcome of the global economy. For now, aircraft manufacturers such as Boeing ought to chase these opportunities within China and the rest of the world and compete for them vigorously.
ReplyDeleteI was also surprised by the government's role in purchasing aircraft for the airlines. Your link implies that the article is about China's "nextgen", but I didn't get that information from this link.
ReplyDeleteChina is making a big push to get into the aviation industry, and you can tell by China's government backing off on some of the regulations to allow better service.
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