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Big three China airlines do well despite HK visitor fall

September 2, 2015 Aviation, Headline News No Comments Print Print Email Email

egtmedia59A fall in visitor numbers to Hong Kong from the Chinese mainland has affected results for the three largest airlines in China.

The Hong Kong Tourism Board (HKTB) reported a decline in overnight visitor arrivals to Hong Kong of 3.8% (to about 12.7 million) for the first half of the year, with a fall in tourists from China contributing most to the decline.

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The South China Morning Post noted that low jet fuel costs helped the results of the three biggest Chinese carriers, as did “mainlanders’ strong wanderlust – for all places other than Hong Kong”.

The three biggest China-based carriers are China Southern, China Eastern, and Air China. China Southern is based in Guangzhou, China Eastern in Shanghai and Air China in Beijing. All three carriers serve Australia.

China Southern Airlines on Friday posted its best ever first-half profit, exceeding CYE 3.5 billion (AUD 772.3 million). It was the only airline among the big three that did not record a decline in regional traffic (which includes Hong Kong, Macau and Taiwan), the paper noted – though regional traffic is a small part of the overall mix.

China Southern reported a record 36% year-on-year traffic increase on its international flights. Domestic traffic grew 10.7% and regional traffic, 8.7%.

Air China reported a year-on-year increase in international traffic of 10.2% and in domestic 2.29%, accompanied by an 8.1% decline in revenue contribution from regional traffic .

China Eastern reported a 6.2% decline in regional traffic (revenue passenger kilometres) and a 4% drop measured in passenger numbers.

The full-year outlook for the big three Chinese airlines is rosy, as regional traffic to places like Hong Kong is a minor part of their overall business and Taiwan is more important to their mix than Hong Kong.

In the first half, regional traffic contributed just 6% of passenger revenue at Air China, 4% at China Eastern, and a mere 2.6% at China Southern.

China Southern plans to deploy more capacity on international operations, especially on its European, American and Oceania routes. The latter includes Australia.

Written by Peter Needham

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