Civil aviation people look forward to the stars and the moon, and finally look forward to 2022, but it feels a little different from what was written in the previous script? Didn't it say that after the "Winter Olympics" and "two sessions", international routes should be fully restored? How the Spring Festival is over, a basin of cold water directly poured up, I feel back to the unbearable first quarter of 2020, but there are still some differences, one is that Wuhan has been replaced by Shanghai, and the other is more flight accidents. Originally, I thought that the first two years had been the hellish mode of civil aviation, but now I feel that it is estimated to be close to the nineteenth floor.
As of April 2, the epidemic and flight accidents were superimposed, the daily utilization rate of the entire industry was less than 1 hour, down 76.2% from the 21st year of flight volume, and the implementation rate was only 21.2% (the data came from the flight steward), so some friends have shouted that this is the "darkest hour" of China's civil aviation. Because of the different angles of the problem, whether it is the "darkest hour" is not easy to say, but it is not too much to say that the current airlines are already in danger at the operational level, and many airlines are on the verge of insolvency. To this end, the voice of "saving civil aviation" has risen and fallen, and everyone has expounded their own views from different angles, which also reflects the enthusiasm for the industry. And I wanted to continue to pretend that the years were quiet, write some application articles that I was good at, and not go to the door to get an axe, but on the one hand, social media was full of "selling tragic self-help", on the other hand, in reality, I continued to play music and continue to dance. So in the end, I still can't help but nag twice.
This proposition is too grand, so I will try to explain the current dilemma through a series of articles, and try to combine classic books and theories to try to give personal analysis and solutions with my limited knowledge and experience, therefore, this series of articles is extremely subjective, absolutely does not guarantee "objective" effectiveness, if there is a recognition, pure coincidence, if there is a contradiction, please understand.
As the first article in this series, I would like to discuss what kind of market environment is currently in, because different environments determine that companies need to take different countermeasures. The current industry management model and business philosophy are based on the rapid development of the past thirty years, so what about today?
First of all, my conclusion, because the black swan event of the "new crown epidemic" in 2020 is likely to make China's civil aviation enter a market environment with the core theme of the "stock game" from the "incremental" market in the short and medium term.
Why do I have such a judgment? This should start from reviewing the bloody report data of these two years, since 2020, civil aviation has lost money for 2 consecutive years, with an annual loss of about 100 billion yuan, and the estimated loss as of the first quarter of this year is expected to be about 30 billion. The core reason for the loss is that the overall travel demand has been greatly reduced due to the epidemic, resulting in a serious increase in the supply of the entire air travel market, and we all know that once the supply exceeds the demand in domestic civil aviation, it is inevitable that the airline will roll up - the proper term "cabbage price". This is nothing new in the off-season before 2019, but the epidemic has made this off-season a year-by-year basis. And this year's ticket can not even be called "cabbage price", may be called "potato price", because Shanghai cabbage is much more expensive than air tickets. Because the official statistics for 2021 have not yet been officially released, I will use the data as of 2020 here to make a simple analysis:
The data comes from the Civil Aviation Administration of China's "2020 Civil Aviation Industry Development Statistical Bulletin"
It is clear here that the overall capacity dropped by 36.7%, but it is interesting that the total number of passenger aircraft in Civil Aviation of China continued to grow from 3645 in 2019 to 3717 in the same year, an increase of 1.9% year-on-year. It is understood that in 2021, it has grown to 3836 aircraft, continuing to grow by 3%, and continuing to increase supply in such a situation of insufficient demand will inevitably bring about the volume and price double kill, which is more in line with the high degree of "homogenization" of domestic civil aviation products, which further amplifies the impact.
The current market environment has been clear, so what needs further consideration is whether this phenomenon is short-term? Or will it continue to affect the domestic aviation market in the short to medium term?
Again, with the help of the above chart to analyze: First, the slowdown trend of civil aviation growth has already appeared. The decline in the growth rate of civil aviation passenger traffic began not in 2020, but in 2017, but the "new crown" caused the problem to intensify rapidly, equivalent to making a 90-degree turn in an instant. The reasons here are manifold, on the one hand, the tension in domestic airspace restricts the further release of domestic transport capacity; on the other hand, the development of high-speed rail is also continuing to divert the domestic aviation market passenger source, to know that even in 2019, domestic passengers in the aviation market account for 88% of the entire civil aviation passenger travel, the total number of international passengers is only more than 70 million, and the domestic market is the foundation and core of civil aviation development.
Second, the domestic market has limited space. Back to 2019, the total number of trips in that year was about 200 million people, and every time we see here, we often fall into a thinking trap, that is, there are still 1 billion who have not been on a plane, so we have broad room for development, and even with the help of the Internet hot word "sinking market" to show that there are still many third- and fourth-line passengers waiting for us to develop. But this set of data is undoubtedly extremely deceptive: on the one hand, we do not distinguish between the characteristics of the population, in short, the elderly and children, we are excluded according to the appropriate age? Not to mention the low frequency of civil aviation travel, have these billion people ever flown in the year or never taken a plane in their lives? If you have not sat in that year, then it is basically in line with the characteristics of civil aviation "low frequency". Do we have the ability to address this fundamental attribute of air travel? How much potential does it have to face up to in the short and medium term in the domestic market? Based on the load factor data of 19 years of domestic routes, if more airspace is not opened, the ceiling of existing domestic passenger travel volume is within reach.
Third, is it possible for the international market to fully recover in the short and medium term? In 2020 we look forward to the epidemic passing, in 2021 we look forward to policy adjustments, when the "Y-20" landed in Shanghai on April 3, 2022, do we still have to pin our hopes on short-term and medium-term policy adjustments? If yes, then I can only smile, spread my hands, and shut up. At the same time, colleagues who hope to hold this view have stepped up their efforts to change the policy for the industry.
In addition, the drastic changes in the world political situation have not only brought about a high rise in oil prices, but also greatly divided the world, national antagonism, nationalist sentiment is high, some people say that this does not affect international travel, do you believe?
In summary, from the domestic industry development trend, customer source stock, the possibility of policy adjustment, all tell us one thing, that is, in the short and medium term, the civil aviation market has entered the market environment of the stock game, and the airline must take into account the demand impact brought about by the epidemic, which is completely equivalent to the fluctuation of oil prices, labor costs, maintenance costs and other factors, which needs to revise the previous annual business plan and budget, rather than like the past two years, always regard the present as an anomaly, and regard pre-2020 as the norm, in the short and medium term, this is the norm!
So what should we do? Of course, under such drastic changes in the market, it is certainly necessary for the government to give more bailout policies, but any external help is "to save the emergency and not to save the poor". In the end, the solution to the problem must return to the industry itself and the enterprise itself. Any market will eventually face a stock game market, which is not the end of the world, but the epidemic makes us have to "take the test" in advance. Although any market will move towards the stock game, but any market will not die because of the stock game, replacing an industry is often a comprehensive innovation of productivity and production methods, rather than a change in the form of competition. Just like the Internet traffic bottomed out, the internal volume came and went, and the Internet industry is still the hot industry at present.
Moreover, even in 2020, 2021 is such a difficult background, there are still airline profits, I believe that in addition to a little luck, it is more of the management of the correct understanding of the market situation change, the embodiment of the company's own management ability, and the company's consistent execution, which are all examples for the industry to learn.
After the emergence of problems, normal people generally experience the process of anxiety, denial, anger, resentment, and acceptance, so it has been 2 years since the "new crown" occurred, and we should accept the new "normal" of the world. Since ancient times, the Chinese people have a traditional culture of "people will win the day", in the past three years, we have refused to "lie flat", refuse to admit our fate, and refuse to give up, so we are still the engine of world economic development. The same is true for the civil aviation industry, although in the short and medium term we have entered the "stock" market, but in the long run this may not be an opportunity, an opportunity to self-innovate through external forces, to take peace for thirty years, we always say that the industry has become more and more closed over the years, and high-speed rail is getting closer and closer to us, so is this not a good opportunity? Although it hurts, what is not painful about growing up?
Time is running out, friends, and getting to know the environment correctly is our first step towards this "new normal."