(Image source: Photo.com)
On May 14, Australia's largest airline, Qantas, said on its official website that due to sluggish demand, it will suspend flights between Shanghai and Sydney from July 28, 2024, and instead invest its capacity in Singapore, India, Manila and other destinations in Asia.
Qantas International chief executive Cam Wallace noted that despite the Covid easing situation, demand for travel between Australia and China has not recovered as strongly as expected. He revealed that in recent months, flights to and from Shanghai have been maintained at half full, and such a load factor is obviously not enough for airlines to support the continuous operation of routes.
In the current China-Australia aviation market, a total of 9 airlines are involved, of which China Eastern Airlines, China Southern Airlines and Xiamen Airlines occupy the top three flights, accounting for a total of 70.2%. The strong performance of these domestic airlines has undoubtedly put a lot of pressure on Qantas.
It is worth noting that Australian international students tend to prefer domestic airlines when choosing airlines. This is mainly due to the fact that domestic airlines offer cheaper fares and are more competitive than Qantas.
Li Yuan, a civil aviation expert, pointed out that the survival of air routes ultimately depends on the source of passengers. He pointed out that the source of passengers between China and Australia is mainly Chinese, while foreign airlines tend to focus more on business passengers. However, in the current economic climate, business travel is not ideal, and some business travellers prefer to transit in Hong Kong or Singapore, which makes it particularly difficult for Qantas to make a profit on non-stop flights.
China's Civil Aviation Administration said it expects overseas flights to return to only 80% of pre-pandemic levels by the end of 2024. In contrast, domestic airlines have recovered more quickly in the Australian route market, with domestic capacity surpassing 2019 levels as early as early 2023.
Qantas' route adjustment is undoubtedly a positive response to market changes.
Looking back at the continental air transport industry:
In 2021, Shanghai, Beijing and Chengdu ranked among the top three airports in terms of passenger throughput
According to the ranking of the passenger throughput of airports in each city, the passenger throughput of Shanghai's two major airports reached 65.41 million passengers last year in 2021, ranking first among cities in the country. Beijing's two major airports handled 57.69 million passengers in 2021, ranking second in the country. Chengdu's two major airports handled 44.47 million passengers last year, surpassing Guangzhou for the first time and ranking third in the country.
The number of airports and aircraft continues to increase
From 2014 to 2020, the number of transport airports and transport aircraft in China has maintained an upward trend. According to the Civil Aviation Administration of China, by the end of 2020, a total of 241 transport airports had been certified in the mainland, an increase of three from the end of 2019. New airports added in 2020 include Yulin Fumian Airport, Yutian Wanfang Airport and Chongqing Fairy Mountain Airport. In addition, in 2020, Ankang Wulipu Airport was relocated to Ankang Fuqiang Airport.
By the end of 2020, the number of transport aircraft in China's civil aviation industry reached 3,903 at the end of the period, an increase of 85 from the end of 2019, including 3,717 passenger aircraft and 186 cargo aircraft.
Opportunities for the development of civil aviation passenger transport
From the perspective of the current situation of civil aviation passenger transport and railway operation in mainland China, it can be seen that the strategies of the mainland civil aviation passenger transport industry to adjust the high-speed rail include: adjusting market positioning and increasing international routes; Highlight the advantages and specialties and adopt regional strategies; Pay attention to air-rail combined transport and give full play to synergistic effects; Development of low-cost airlines.
According to the research report of Huatai Securities, looking forward to 2024, they are optimistic about the improvement of the supply and demand pattern, the medium and long-term upward trend of aviation and oil transportation, and the cross-border logistics market driven by the overseas expansion of China's e-commerce platforms. The slowdown in macro growth and the downward risk appetite of funds may continue to have a positive impact on the infrastructure sector, and the high dividends and defensive nature of roads and ports still have allocation value. In other sub-sectors, express price competition may continue, suppressing the profitability of a single ticket; Airport profitability is expected to continue to recover, but there are still uncertainties in the duty-free business; Container transportation is facing a large number of new ship delivery pressure; There may be peak season opportunities for rail passenger transport.
Prospective Economist APP Information Group
For more research and analysis of this industry, please refer to the "Market Prospect and Investment Strategic Planning Analysis Report of China's Civil Air Transport Industry" by Qianzhan Industry Research Institute
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