Competitive Dynamics of the China-Europe Aviation Market

Transcription

1 Competitive Dynamics of the China-Europe Aviation Market Dr Zheng Lei Institute for Aviation Research (UK)

2 Agenda Overview of the China-Europe Aviation Market Analysis of the Connecting Market Main players in the China-Europe Aviation Market

3 Overview of the China-Europe Aviation Market

4 万座位数 Developments of monthly frequency and monthly seats in the China-EU market % 80% 60% 40% Rapid Growing Market: Dynamics and Opportunities Monthly Frequency CN 中国承运人 EU 欧洲承运人 Monthly Frequency 100% 80% 60% 40% Monthly Seats CN 中国承运人 EU 欧洲承运人 Monthly Seats 月座位数比例 20% 20% 0% CN 中国承运人 EU 欧洲承运人 Note: routes with monthly frequency >=8 Source: IAR anlysis based on OAG database (July, each year) 0% CN 中国承运人 EU 欧洲承运人

5 Major Changes started from 2014 Number of Routes Connecting China-Europe Note: routes with monthly frequency >=8 Source: IAR anlysis based on OAG database (July, each year)

6 New Routes Driven by Chinese Carriers Number of Routes Operating by China or EU Carriers by CN Carriers by EU Carriers Note: routes with monthly frequency >=8 Source: IAR anlysis based on OAG database (July, each year)

7 China-Europe Routes operated by Chinese Airlines in 2014: 32 Routes 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

8 Huge Opportunities for European Airports China-Europe Routes operated by Chinese Airlines in 2017: 59 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) Source: IAR analysis

9 New Routes Opened by Chinese Airlines: 2017 vs 2014 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 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 Xiamen Airlines (1): Xiamen Amsterdam Sichuan Airlines (2): Chengdu Moscow/ Prague Source: IAR analysis

10 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) Source: IAR analysis

11 European airlines are cautious in opening up new routes 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 Source: IAR analysis

12 New Routes Opened by European Airlines: 2017 vs 2014 Lufthansa: Frankfurt Qingdao (drop Shenyang) Iberia: Madrid - Shanghai Finnair: Helsinki - Guangzhou Neos Air: Milan Nanjing BA: Drop Heathrow - Chengdu Austrian Airlines: Vienna - Shanghai Siberia: Moscow - Urumqi Transaero: Drop Moscow - Beijing Ukraine: Kiev Beijing Alitalia: Rome Beijing Source: IAR analysis

13 But European Carriers have more advantage on trunk routes 2017 TOP 10 Routes in the China-Europe Market 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 % 2.29% - 5 Shanghai-Moscow PVG-SVO 4.84% Aeroflot China Eastern % 1.53% - 6 Beijing-Frankfurt PEK-FRA 4.77% Air China Lufthansa % 2.10% - 7 Beijing-Heathrow PEK-LHR 3.91% Air China British Airways % 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 % 0.55% - 10 Beijing-Amsterdam PEK-AMS 2.47% KLM China Southern % 1.17% - Note: routes with monthly frequency >=8; Source: IAR analysis based on OAG data (July, each year)

14 New markets: dynamic but some uncertainty 2017 Bottom 10 Routes in the China-Europe Market 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 74 Urumqi-Moscow Domodedovo URC-DME 0.27% Siberia Airlines 75 Chengdu-Madrid CTU-MAD 0.25% Beijing Capital Airlines 76 Chongqing-Rome CKG-FCO 0.23% Hainan Airlines Historical opportunities to shape these dynamic markets Note: routes with monthly frequency >=8 Source: IAR analysis based on OAG data (July, each year)

15 Main Airports in the China-Europe Market 2007 Rank % 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% Source: IAR analysis

16 Analysis of Connecting Market

17 Traffic diversion in the China EU market Transfer Pax 中转 旅客 52% 2007 Direct Pax 直飞 旅客 48% Direct Pax 直飞旅客 Transfer Pax 中转旅客 Source: IAR analysis based on PaxIS data Transfer Pax 中转 旅客 57% Direct Pax 直 飞旅客 43%

18 Strong competition from the Middle East Traffic diversion in the China EU market % 600% 5% 3% 2% % 48% Direct Pax 直飞旅客 EU Transfer Pax 欧洲中转 CN Transfer Pax 中国中转 % 42% ME Transfer Pax 中东中转 Other Transfer Pax 其他中转 % % 100% 200% 100% 10% 4% Total 总旅客量 Transfer Pax 中 ME Transfer Pax 转旅客 中东中转旅客 增长率 0% 14% 29% 43% 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 Source: IAR analysis based on PaxIS data

19 Rank Airport Transfer Pax Source: IAR analysis based on PaxIS data Shifting Power in Transit Hubs Share of Transfer Pax Airport Transfer Pax Share of Transfer Pax 1 FRA : Frankfurt % PEK : Beijing % 2 CDG : Paris % FRA : Frankfurt % 3 AMS : Amsterdam % SVO : Moscow % 4 HEL : Helsinki % DXB : Dubai % 5 MUC : Munich % AMS : Amsterdam % 6 PEK : Beijing % CDG : Paris % 7 SVO : Moscow % PVG : Shanghai % 8 DXB : Dubai, AE % HEL : Helsinki % 9 LHR : Heathrow % HKG : Hong Kong % 10 PVG : Shanghai % IST : Istanbul % 11 VIE : Vienna % DOH : Doha % 12 CPH : Copenhagen % MUC : Munich % 13 HKG : Hong Kong % CAN : Guangzhou % 14 MXP : Milan % AUH : Abu Dhabi % 15 IST : Istanbul % ZRH : Zurich %

20 Ιαν 2015 Φεβ 2015 Μαρ 2015 Απρ 2015 Μαϊ 2015 Ιουν 2015 Ιουλ 2015 Αυγ 2015 Σεπ 2015 Οκτ 2015 Νοε 2015 Δεκ 2015 Ιαν 2016 Φεβ 2016 Μαρ 2016 Απρ 2016 Μαϊ 2016 Ιουν 2016 Ιουλ 2016 Αυγ 2016 Σεπ 2016 Οκτ 2016 Νοε 2016 Δεκ 2016 Ιαν 2017 Φεβ 2017 Μαρ 2017 Απρ 2017 Comparison of Average Fare (USD) of China-Europe Market EU Big 3 CN Big 3 Emirates Hainan Market Average Source: IAR analysis based on PaxIS data

21 Route Network of Emirates

22 Hub configuration for Emirates at Dubai Source: IAR analysis based on OAG database

23 Source: IAR Analysis based on Ascend Fleet Data

24 Source: IATA WATS 2016

25 Main Players

26 Main Players in the China-Europe Origin-Destination Market (2016) Rank Airlines Pax Carried Share 1 Air China 2,041, % 2 Lufthansa 1,040, % 3 Aeroflot 871, % 4 China Eastern 809, % 5 Air France 800, % 6 KLM 666, % 7 China Southern 652, % 8 Hainan Airlines 584, % 9 Emirates 454, % 10 Finnair 423, % Source: IAR analysis based on 2016 annual two-way passenger data form IATA PaxIS

27 New Comers to China-Europe Market 2015 New Entry CN: Sichuan Airlines EU: Ukraine Airlines Alitalia 2016 CN: Tianjin Airlines Xiamen Airlines EU: Iberia 2017 CN: Capital Airlines Lucky Air EU: Neos Air Siberia Airlines 中国航空公司 CN Carriers Note: routes with monthly frequency >=8 Source: IAR analysis based on OAG data (July, each year) 欧洲航空公司 EU Carriers

28 Centre of Gravity moves to China Share of Passengers in the China-Europe Market Europe 34% China 66% Source: IAR analysis based on 2016 annual two-way passenger data form PaxIS

29 Top 10 European Cities to China: Relatively stable 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 Paris-De Gaulle 巴黎戴高乐 London-Heathrow 伦敦希斯罗 London-Heathrow 伦敦希斯罗 Frankfurt 法兰克福 Moscow 莫斯科 Amsterdam 阿姆斯特丹 Frankfurt 法兰克福 Moscow 莫斯科 Rome-Da Vinci 罗马 Madrid 马德里 Amsterdam 阿姆斯特丹 Rome-Da Vinci 罗马 Madrid 马德里 Copenhagen 哥本哈根 Milan-Malpensa 米兰 Munich 慕尼黑 Munich 慕尼黑 Barcelona 巴塞罗那 Barcelona 巴塞罗那 Source: IAR analysis based on PaxIS data

30 Top 10 Chinese Cities to Europe: Changing Market Dynamics 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 Shanghai 上海 Shanghai 上海 Beijing 北京 Guangzhou 广州 Guangzhou 广州 Chengdu 成都 Chengdu 成都 Wenzhou 温州 Wenzhou 温州 Uruqi 乌鲁木齐 Hangzzhou 杭州 Shenyang 沈阳 Chongqing 重庆 Sanya 三亚 Wuhan 武汉 Fuzhou 福州 Xi'an 西安 Xiamen 厦门 Nanjing 南京 Source: IAR analysis based on PaxIS data

31 China-Europe Routes Operated by Chinese Airlines Airlines Air China China Southern China Eastern Hainan Airlines total Note: routes with monthly frequency >=8 Source: IAR analysis based on OAG database (July, each year)

32 HNA: Multi brand strategy China-Europe Routes Operated by Chinese Airline Group Airlines Air China China Southern+Xiamen Airlines China Eastern Hainan Airlines + Capital + Tianjin + Lucky Air total Note: routes with monthly frequency >=8 Source: IAR analysis based on OAG database (July, each year)

33 Europe: Most important market for Air China Source: IAR analysis based on Sabre Market Intelligence

34 China-Europe Routes Operated by European Airlines Airlines AF+KL Lufthansa Finnair Aeroflot BA+Iberia total Note: routes with monthly frequency >=8 Source: IAR analysis based on OAG database (July, each year)

35 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

36 Thank you for your attention!