China’s aviation industry is growing fairly fast with the sector having experienced tremendous growth in 2018. 2019 is expected to present the country with a tremendous opportunity for further growth as there is anticipated an increase in profit generation, realignment of existing alliances, and growth in the country’s aviation industry infrastructure. Aviation experts are anticipating that the country will experience tremendous growth in 4 areas.
According to the International Air Transport Association (IATA), Chinese airlines including Air China, China Eastern Airlines, and China Southern Airlines are expected to experience a major boom in profit generation. Profit projections show that the three airlines would rake in up to $43 billion, an equivalent of about 300 billion Yuan. China Southern Airlines is expected to be the largest contributor to the country’s airline industry profits as it is expected to generate over 108 billion Yuan. IATA projects that these profits will be realized as a result of the anticipated reduction in aviation fuel costs, low levels of hedging on fuel for the airlines, as well as the anticipated strong regional economic growth within the Asian region.
Withdrawal from alliances
Most major Chinese airlines today are members of the global Sky Team alliance. With effect from 2018, some major Chinese airlines started withdrawing from their global alliances while aiming at aligning themselves with their strategic growth needs and goals. It is thus anticipated that 2019 would see more Chinese airlines withdraw their global alliance memberships as they target strategic growth.
The expected growth in the Chinese aviation industry will put a major constraint on the existing infrastructure, thereby promoting the development of new airports that can handle more passengers. Beijing’s new airport, the Beijing Daxing International airport is expected to be completed by the end of this year. With a capacity of 72 million passengers and about 2 million tons of cargo on an annual basis, Daxing International Airport is expected to revamp the air travel industry in China.
More C919 development tests
The Chinese prototype passenger jet, the C919 developed by the Commercial Aircraft Corporation of China is anticipated to undergo more tests with the expected maiden flight in 2019. The C919 jet, designed to clock over 4,000 kilometers in range, is expected to become a major competitor of the Airbus A320 and the Boeing 737. If successful, the C919 will create a major buzz among major Chinese carriers.