Is China Still Worth It…….I Think So!
I’m heading off to Beijing for the 3rdChina – Europe Aviation Summit in Beijing next week. It’s a high-level event to which all the major Chinese carriers send high-level delegations, and the content is always interesting with some fascinating insights from the local airlines on how they see the market. It is the only event of its kind where you really get to meet all the decision-makers and build those important relationships. But it is the 3rdyear and it’s a long way to travel so I’ve been wondering what value does it really deliver and if it does make a difference in getting those new air services?
Looking back over the last five IATA winter seasons seemed a reasonable period to judge how the market has changed and perhaps help place the forthcoming summit in context. In total, there are some 10,600 scheduled flights planned from China to Western Europe this winter season; that equates to an additional 20 flights a day compared to Winter 2015/2016 and some 922,250 extra seats, which is about 6,588 a day. That’s quite a bit of growth and when you dig deeper into how the market has developed then attending the Summit becomes a bit of a no brainer…
Chart 1China – Western Europe Capacity Growth Winter 2015 – Winter 2019
Source: OAG Schedules Analyser
From just over one million seats in Winter 2015, Chinese carriers now offer 1.8 million seats, an increase of 79% over five seasons. More importantly, Chinese airlines now account for very nearly 60% of all capacity offered compared to their 48% share five years ago. This winter 11 Chinese airlines will operate scheduled services to Western Europe compared to six in Winter 2015, and established carriers such as China Eastern have doubled capacity in that time. Eleven European airlines also operate but that amounts to just one more carrier (Iberia) than five years ago which firmly illustrates a key point; Chinese airlines are in growth mode whilst European airlines are not (Finnair excepted!).
It may be a coincidence but the Netherlands, and specifically Amsterdam Schiphol, who have attended each of the previous China-Europe Aviation Summits and are a supporter of the Summit, have seen capacity grow by 16%, significantly ahead of the European average over the last five years and despite the airport having a movement constraint!
In 2015, some 52 airport pairs were operated between China and Europe. This Winter that will have increased to 94 airport pairs, a considerable increase over a short period of time. The number of airport pairs operated by Chinese carriers has now reached 74 compared to 35 in Winter 2015; European airlines now operate 35 airport pairs, six more than five years ago so hardly earth-shattering growth. Much of the growth has been from Tier Two markets in China such as Nanjing, Qingdao and Shenzhen although with larger populations than many European cities they are hardly Tier Two!
As in any market there has been some destination churn. Some 8 airport pairs have been dropped this winter compared to last year, including Beijing to Dublin & Edinburgh, but some 16 new airport pairs are being operated this winter with Chinese airlines responsible for much of that growth.
It’s clear that despite a slight slowdown in its economy, China remains one of the major growth markets to Europe. It is also clear that the vast majority of that growth comes from Chinese airlines and I know from my own experience that building relationships at the highest levels with the local carriers is a major part of any development process.
As in anything you “have to be in it to win it” and having looked at the data it’s clear to me that in the case of the China – Western Europe market events such as the China – Europe Summit are providing valuable access and delivering for delegates.
See you there, then!
You can find out more about the upcoming and future China-Europe summits by contacting us at marketing@midasaviation.com