On December 18, the U.S. Department of Transportation imposed a fine of US$140 million, or about 1 billion yuan, on Southwest Airlines for widespread flight cancellations and delays at the end of last year. This is the largest civil fine ever issued by the U.S. Department of Transportation.
The U.S. Department of Transportation said on the 18th that Southwest Airlines was fined $140 million for failing to provide timely assistance to passengers, slow flight status updates, and too long a refund process, violating consumer protection laws. Of this fine, $35 million will be paid to the U.S. Treasury Department, and $90 million (about 640 million yuan) will be paid as a compensation fund to passengers who experience subsequent flight cancellations or delays.
Although Southwest Airlines did not admit that it was at fault, it said on the 18th that paying the fine would prevent the company from getting into a lawsuit. Previously, the company had paid $600 million (about 4.28 billion yuan) in refunds and compensation to affected passengers.
Looking back at the mainland's civil aviation transport industry, civil aviation transport has become an important link in the mainland's transportation system
With the development of the national economy and aviation technology, civil aviation has become an important link in the transportation system of the mainland, and has also become a common choice in the travel mode of mainland citizens. For the whole year of 2021, China's civil aviation transport industry completed a transport turnover of 85.675 billion ton-kilometers, an increase of 7.3 percentage points over 2020. Among them, the total transportation turnover of domestic routes was 64.114 billion ton-kilometers, and the total transportation turnover of international routes was 21.561 billion ton-kilometers.
The fleet size of the three major state-owned airlines accounts for nearly 60%
The mainland's civil aviation transport industry as a whole belongs to an oligopolistic competitive market, with Air China, China Southern Airlines and China Eastern Airlines being the three leading domestic civil aviation enterprises. From the perspective of fleet size, as of the end of 2021, Air China Southern Airlines and China Eastern Airlines had a total of 2,382 civil aviation transport aircraft, accounting for 58.76%.
Thai Securities released a research report saying that the growth of civil aviation demand has a cyclical nature and is a necessary condition to support the development of the civil aviation industry. From both qualitative and quantitative perspectives, it is found that since 1991, there have been three troughs in the growth of civil aviation demand in the mainland, but they have rebounded since then, reflecting the resilience of civil aviation demand growth. The bank believes that mainland civil aviation has entered a recovery cycle, and the endogenous demand that has been pent-up in the past three years will be gradually released. Combined with the slowdown in fleet growth, Chinese airlines will benefit from improved supply and demand, full fare liberalization, and profitability is expected to achieve breakthroughs.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "2023-2028 China Civil Air Transport Industry Market Prospect and Investment Strategic Planning Analysis Report" by Qianzhan Industry Research Institute
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