China carriers try to play catch up with foreign airlines

A long, intelligent article on the challenges facing China carriers.

China carriers are leaping feet first into the international aviation rat race. They already have placed orders for over 100 aircraft with Boeing and Airbus. Boeing predicts China will require 3,400 new airplanes worth about $340 billion over the next 20 years. Boeing is of the view that China’s fleet will nearly quadruple to 4,460 airplanes by the end of 2026.

With a lack of established international networks, China carriers return half or one-third full on the return trips from foreign destinations.

Aviation analyst Li Lei, said, ‘Chinese carriers must first consider cultivating air cargo networks before jumping into the international scene.’ He noted that the ratio between US-bound cargo and China-bound return cargo has hovered at around 6:1 over the years. There always will be insufficient US cargo back to Asia.

Meanwhile cargo rates have been falling while fuel prices have been rising.

Last year, Chinese airlines handled 3.49 million tonnes of air cargo, and about 72% of this was handled by Shanghai’s Pudong and Hongqiao airports.

One analyst said the sudden arrival of Chinese airlines on the international scene may be largely ‘a face-saving exercise’. He noted that while most foreign carriers had used up their quotas under bilateral agreements between their countries and China, mainland airlines still have not used up their 2004 quotas as yet. The article is detailed and worth reading. Click on Source: CargoNewsAsia.