athens international airport - competitive dynamics …...source: iar analysis based on paxis data...

Competitive Dynamics of the China-Europe Aviation Market

Dr Zheng Lei

Institute for Aviation Research （UK)

Agenda

Overview of the China-Europe Aviation Market

Analysis of the Connecting Market

Main players in the China-Europe Aviation Market

Overview of the China-Europe Aviation Market

Developments of monthly frequency and monthly seats in the China-EU market

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3000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly Frequency

CN 中国承运人 EU 欧洲承运人

0

10

20

30

40

50

60

70

80

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

万座位数

Monthly Seats


0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly Frequency


0%

20%

40%

60%

80%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Monthly Seats 月座位数比例


Note: routes with monthly frequency >=8Source: IAR anlysis based on OAG database (July, each year)

Rapid Growing Market: Dynamics and Opportunities

Number of Routes Connecting China-Europe


3035

3034

4045 47

50

59

6976

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Major Changes started from 2014

Number of Routes Operating by China or EU Carriers


18 19 1721

26 2629

3238

50

59

2428

23 24 2632 31 32

35 37 37

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017by CN Carriers by EU Carriers

New Routes Driven by Chinese Carriers

– Origins: Beijing (17), Shanghai (7), Guangzhou (4) , Changsha (1), Chengdu (1), Urumqi (1), Xi’an(1)

– Destination: Moscow (5), Frankfurt (4), Paris (3), Heathrow (3), AMS (2), Rome (2), Milan (2), Munich (2), Stockholm, Brussels, St Petersburg, Vienna, Düsseldorf, Berlin, Geneva, Madrid, Gatwick (1)

Source: IAR analysis

China-Europe Routes

operated by Chinese Airlines in 2014: 32 Routes

– Origin: Beijing (21), Shanghai (12), Guangzhou (4), Chengdu (3), Xi’an(3), Kunming(2), Urumqi(2), Wuhan (2), Changsha, Shenzhen, Qingdao, Tianjin, Xiamen (1)

– Destination: Moscow (11), Paris (6), Frankfurt (5), Rome (5), AMS (4), St Petersburg (3), Heathrow (3), Madrid (3), Prague (3), Milan (2), Munich (2), Stockholm, Brussels, Manchester, Berlin, Vienna, Minsk, Warsaw, Dusseldorf, Zurich, Barcelona, Geneva, Gatwick (1)

China-Europe Routes

operated by Chinese Airlines in 2017: 59 Routes

Huge Opportunities for European Airports


Air China (6):

• Beijing - Minsk / Warsaw /Zurich

• Chengdu - Paris

• Shanghai – Barcelona

• Shenzhen – Frankfurt

(drop Beijing – Gatwick)

China Eastern (5):

• Shanghai – Amsterdam / Madrid / Prague / St Petersburg

• Kunming – Paris

China Southern (3):

• Urumqi – St Petersburg

• Wuhan – Moscow / Rome

Xiamen Airlines (1):

• Xiamen – Amsterdam

New Routes Opened by Chinese Airlines:2017 vs 2014

Hainan Airlines (5):

• Beijing – Manchester / Prague

• Xi’an – Rome / Paris

• Chongqing – Rome

Tianjin Airlines (3):

• Chongqing – Gatwick / Moscow

• Tianjin - Moscow

Beijing Capital Airlines (2):

• Chengdu – Madrid

• Qingdao – Moscow

Lucky Air (1):

• Kunming – Moscow

Sichuan Airlines (2):

• Chengdu – Moscow/ Prague


Europe-China Routes Operated

by European Airlines in 2014：32 Routes

– Origin: Amsterdam (5), Paris (4), Frankfurt (4), Moscow (4), Heathrow (3), Helsinki (4), Munich (2), Zurich (2), Copenhagen (2), Vienna, Warsaw (1)

– Destination: Beijing (12), Shanghai (9), Guangzhou (2) , Chengdu (2), Chongqing, Hangzhou, Wuhan, Xiamen, Xi’an, Shenyang, Nanjing (1)


Europe-China Routes Operated

by European Airlines in 2017: 37 Routes

– Origin: Amsterdam (5), Paris (4), Frankfurt (4), Moscow (4), Heathrow (2), Helsinki (5), Munich (2), Zurich (2), Copenhagen (2), Vienna (2), Kiev, Rome, Madrid, Milan, Warsaw (1)

– Destination: Beijing (13), Shanghai (11), Guangzhou (3) , Nanjing (2), Chengdu, Chongqing, Hangzhou, Wuhan, Xiamen, Xi’an, Qingdao, Urumqi

European airlines are cautious in opening up new routes


Lufthansa:

• Frankfurt – Qingdao （drop Shenyang）

Finnair:

• Helsinki - Guangzhou

BA: Drop Heathrow - Chengdu

Austrian Airlines:

• Vienna - Shanghai

Ukraine:

• Kiev – Beijing

Alitalia:

• Rome – Beijing

New Routes Opened by European Airlines:2017 vs 2014

Iberia:

• Madrid - Shanghai

Neos Air:

• Milan – Nanjing

Siberia:

• Moscow - Urumqi

Transaero: Drop Moscow - Beijing


2017 TOP 10 Routes in the China-Europe Market

Note: routes with monthly frequency >=8； Source: IAR analysis based on OAG data (July, each year)

Rank Name Code Market Share Carrier 1 Carrier 2 Carrier 3 M/S 1 M/S 2 M/S 3

1 Shanghai-Paris PVG-CDG 6.52% Air France China Eastern Air China 3.14% 2.58% 0.81%

2 Beijing-Moscow PEK-SVO 6.46% Aeroflot Air China Hainan Airlines 4.03% 1.28% 1.14%

3 Shanghai-Frankfurt PVG-FRA 5.66% Lufthansa Air China China Eastern 3.62% 1.08% 0.95%

4 Beijing-Paris PEK-CDG 5.17% Air France Air China - 2.88% 2.29% -

5 Shanghai-Moscow PVG-SVO 4.84% Aeroflot China Eastern - 3.31% 1.53% -

6 Beijing-Frankfurt PEK-FRA 4.77% Air China Lufthansa - 2.68% 2.10% -

7 Beijing-Heathrow PEK-LHR 3.91% Air China British Airways - 2.69% 1.22% -

8 Shanghai-Heathrow PVG-LHR 3.68% British Airways China Eastern Virgin Atlantic 1.30% 1.29% 1.09%

9 Shanghai-Amsterdam PVG-AMS 2.77% KLM China Eastern - 2.22% 0.55% -

10 Beijing-Amsterdam PEK-AMS 2.47% KLM China Southern - 1.30% 1.17% -

But European Carriers have more advantage on trunk routes

2017 Bottom 10 Routes in the China-Europe Market

Note: routes with monthly frequency >=8Source: IAR analysis based on OAG data (July, each year)

Rank Name Code Market Share Carrier

67 Urumqi-Moscow URC-SVO 0.39% China Southern Airlines

68 Changsha-Frankfurt CSX-FRA 0.38% China Southern Airlines

69 Nanjing-Milan NKG-MXP 0.34% Neos Air

70 Chongqing-Gatwick CKG-LGW 0.30% TianJin Airlines

71 Tianjin-Moscow TSN-SVO 0.30% TianJin Airlines

72 Chongqing-Moscow CKG-SVO 0.30% TianJin Airlines

73 Chengdu-Prague CTU-PRG 0.29% Sichuan Airlines

74Urumqi-Moscow

DomodedovoURC-DME 0.27% Siberia Airlines

75 Chengdu-Madrid CTU-MAD 0.25% Beijing Capital Airlines

76 Chongqing-Rome CKG-FCO 0.23% Hainan Airlines

New markets: dynamic but some uncertainty

Historical opportunities to shape these dynamic markets

Main Airports in the China-Europe Market

2007 Rank 2017

27% Beijing 1 Beijing 22%

19% Shanghai Pudong 2 Shanghai Pudong 17%

11% Frankfurt 3 Moscow 8%

9% Paris 4 Paris 8%

6% Heathrow 5 Frankfurt 7%

5% Amsterdam 6 Heathrow 5%

4% Moscow 7 Amsterdam 4%

3% Guangzhou 8 Guangzhou 4%

3% Mucich 9 Helsinki 2%

3% Helsinki 10 Mucich 2%

90% 78%


Analysis of Connecting Market

Source: IAR analysis based on PaxIS data

Traffic diversion in the China – EU market

1.434.992

2.396.863

1.565.629

3.137.106

2007 2016

Direct Pax 直飞旅客 Transfer Pax 中转旅客

2007Direct

Pax 直飞

旅客

48%

Transfer

Pax 中转

旅客

52%

2007

Direct

Pax 直

飞旅客

43%

Transfer

Pax 中转

旅客

57%

2016


Traffic diversion in the China – EU market

48%

42%

5%3%

2%

2007

Direct Pax 直飞旅客

EU Transfer Pax 欧洲中转

CN Transfer Pax 中国中转

ME Transfer Pax 中东中转

Other Transfer Pax 其他中转

43%

29%

14%

10%4%

2016

Direct Pax 直飞旅客

EU Transfer Pax 欧洲中转

CN Transfer Pax 中国中转

ME Transfer Pax 中东中转

Other Transfer Pax 其他中转

84% 100%

542%

0%

100%

200%

300%

400%

500%

600%

-

1.000.000

2.000.000

3.000.000

4.000.000

5.000.000

6.000.000

Total 总旅客量 Transfer Pax 中

转旅客

ME Transfer Pax

中东中转旅客

2007 2016 增长率

Strong competition from the Middle East

Shifting Power in Transit Hubs


2007 2016

Rank Airport Transfer PaxShare of

Transfer PaxAirport

Transfer Pax

Share of Transfer Pax

1 FRA : Frankfurt 369452 23.6% PEK : Beijing 437566 13.9%

2 CDG : Paris 187508 12.0% FRA : Frankfurt 302550 9.6%

3 AMS : Amsterdam 152952 9.8% SVO : Moscow 260578 8.3%

4 HEL : Helsinki 135965 8.7% DXB : Dubai 218727 7.0%

5 MUC : Munich 135889 8.7% AMS : Amsterdam 216484 6.9%

6 PEK : Beijing 98004 6.3% CDG : Paris 190185 6.1%

7 SVO : Moscow 68157 4.4% PVG : Shanghai 165800 5.3%

8 DXB : Dubai, AE 62607 4.0% HEL : Helsinki 150792 4.8%

9 LHR : Heathrow 42646 2.7% HKG : Hong Kong 149328 4.8%

10 PVG : Shanghai 36420 2.3% IST : Istanbul 144366 4.6%

11 VIE : Vienna 36060 2.3% DOH : Doha 132048 4.2%

12 CPH : Copenhagen 32691 2.1% MUC : Munich 103913 3.3%

13 HKG : Hong Kong 28678 1.8% CAN : Guangzhou 64889 2.1%

14 MXP : Milan 26830 1.7% AUH : Abu Dhabi 62340 2.0%

15 IST : Istanbul 15765 1.0% ZRH : Zurich 58035 1.8%

Comparison of Average Fare (USD) of China-Europe Market

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EU Big 3 CN Big 3 Emirates Hainan Market Average


Route Network of Emirates

Hub configuration for Emirates at Dubai

Source: IAR analysis based on OAG database

Source: IAR Analysis based on Ascend Fleet Data

Source: IATA WATS 2016

Main Players

Main Players in the China-Europe Origin-Destination Market (2016)

Rank Airlines Pax Carried Share

1 Air China 2,041,552 18.4%

2 Lufthansa 1,040,721 9.4%

3 Aeroflot 871,193 7.9%

4 China Eastern 809,540 7.3%

5 Air France 800,107 7.2%

6 KLM 666,567 6.0%

7 China Southern 652,014 5.9%

8 Hainan Airlines 584,414 5.3%

9 Emirates 454,651 4.1%

10 Finnair 423,995 3.8%

Source: IAR analysis based on 2016 annual two-way passenger data form IATA PaxIS

Note: routes with monthly frequency >=8Source: IAR analysis based on OAG data (July, each year)

4 4 4 4 4 4 4 4

5

7

9

12

14

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12 1

3 14

12

12

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14

16

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

中国航空公司 CN Carriers 欧洲航空公司 EU Carriers

2015 New EntryCN: Sichuan Airlines EU: Ukraine Airlines

Alitalia

2016CN: Tianjin Airlines

Xiamen Airlines EU: Iberia

2017CN: Capital Airlines

Lucky AirEU: Neos Air

Siberia Airlines

New Comers to China-Europe Market

Share of Passengers in the China-Europe Market

China66%

Europe34%

Centre of Gravity moves to China

Source: IAR analysis based on 2016 annual two-way passenger data form PaxIS

2007 2016

Rank

排名Airport 机场

Pax 旅客人数

Avg Fare

平均票价（美元）

Airport 机场Pax 旅客人数

Avg Fare 平均票价（美元）

1 Paris-De Gaulle 巴黎戴高乐 353552 775 Paris-De Gaulle 巴黎戴高乐 667482 479

2 London-Heathrow 伦敦希斯罗 320688 928 London-Heathrow 伦敦希斯罗 575454 567

3 Frankfurt 法兰克福 234946 734 Moscow 莫斯科 415232 264

4 Amsterdam 阿姆斯特丹 177068 673 Frankfurt 法兰克福 403921 518

5 Moscow 莫斯科 160701 522 Rome-Da Vinci 罗马 252731 348

6 Madrid 马德里 106438 633 Amsterdam 阿姆斯特丹 239388 534

7 Rome-Da Vinci 罗马 96585 612 Madrid 马德里 210404 288

8 Copenhagen 哥本哈根 86046 736 Milan-Malpensa 米兰 177340 511

9 Munich 慕尼黑 81921 888 Munich 慕尼黑 173439 625

10 Barcelona 巴塞罗那 68133 628 Barcelona 巴塞罗那 169442 323


Top 10 European Cities to China:Relatively stable

2007 2016

Rank

排名City 城市

Pax旅客人数

Avg Fare 平均票价（美

元）City 城市

Pax旅客人数

Avg Fare

平均票价（美元）

1 Beijing 北京 1466576 717 Shanghai上海 1938037 515

2 Shanghai上海 1179123 774 Beijing 北京 1826133 523

3 Guangzhou 广州 154550 700 Guangzhou 广州 431922 393

4 Chengdu 成都 38297 630 Chengdu 成都 189600 348

5 Wenzhou 温州 19881 528 Wenzhou 温州 168637 246

6 Uruqi 乌鲁木齐 15583 448 Hangzzhou 杭州 97199 328

7 Shenyang 沈阳 13134 647 Chongqing 重庆 83996 347

8 Sanya 三亚 12659 656 Wuhan 武汉 80222 370

9 Fuzhou 福州 11946 591 Xi'an 西安 69248 361

10 Xiamen 厦门 10065 648 Nanjing 南京 68550 455


Top 10 Chinese Cities to Europe: Changing Market Dynamics

China-Europe Routes Operated by Chinese Airlines

Airlines 2014 2015 2016 2017Air China 18 18 20 23China Southern 10 10 13 12China Eastern 6 7 11 11Hainan Airlines 4 7 7 9total 38 42 51 55

Note: routes with monthly frequency >=8Source: IAR analysis based on OAG database (July, each year)

China-Europe Routes Operated by Chinese Airline Group

Airlines 2014 2015 2016 2017

Air China 18 18 20 23

China Southern+Xiamen Airlines 10 10 14 13

China Eastern 6 7 11 11

Hainan Airlines + Capital + Tianjin + Lucky Air 4 7 10 15total 38 42 55 62


HNA: Multi brand strategy

Europe: Most important market for Air China

Source: IAR analysis based on Sabre Market Intelligence


China-Europe Routes Operated by European Airlines

Airlines 2014 2015 2016 2017

AF+KL 9 9 9 9

Lufthansa 6 6 7 6

Finnair 4 4 5 5

Aeroflot 3 3 3 3

BA+Iberia 3 3 3 3

total 25 25 27 26

Summary

Rapid development of China-Europe aviation market

A number of new city-pairs in both Europe and China have established direct flights

Growth is mainly driven by Chinese airlines

European airlines still maintain advantages on trunk routes

Chinese airlines are more aggressive in opening up new routes

Middle East airports are gaining more market share of transfer passengers in the China-Europe market

Shifting power in transit hubs

The competitive landscape is shaped by airline network & pricing strategy

Emerging carriers & airports

Thank you for your attention!

www.instituteforaviation.orgEmail: [email protected]

athens international airport - competitive dynamics …...source: iar analysis based on paxis data...

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