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China Airline System In Much More Difficulty Than It Appears

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China Airline System In Much More Difficulty Than It Appears

May 19
15:09 2020
China Airline System In Much More Difficulty Than It Appears
New Report: A slowing economy, new restrictive policies toward foreigners in the country, and diplomatic issues will result in core Chinese airline traffic to drop 30% in 2020 – 2021. Passenger traffic between U.S. and China will plunge by over 80% for the foreseeable future.

Despite reports of restoration of capacity toward pre-COVID levels, China’s air transportation system is not likely to recover prior traffic levels for at least another two years, according to a new report from Boyd Group International. This air service contraction will have repercussions across the global aviation industry.

The findings are part of a research study, Clipped Dragons: China’s Airline System, completed by Boyd Group International. Business travel will be materially reduced. Plus, leisure visitation to and from China is now fundamentally decimated. A slowing economy, diplomatic issues, and major changes within China in regard to treatment of foreigners have combined to smother what had been robust, expanding traffic, both domestic and international.

“There is a difference between restoration of capacity and a rebound in traffic,” notes Michael Boyd, president of Boyd Group International. “Remember, the China air transportation system is not completely driven by organic economic demand, but by government direction.” China’s system is primarily point-to-point and operates at the direction of several government and provincial entities, not the marketplace.

Clipped Dragons: China’s Airline System covers the key dynamics that will affect the future of the country’s air transportation system. These include reviews of the unique linear structure of the system, the inflexible system fleet mixes, the fallout from reduced international service, and the global effects on airliner demand with the emergence of a fleet glut in China in 2020 – 2022.

An Already Declining Growth Market, Pre-COVID. The report points out that domestic air passenger growth in China in 2019 had already dropped by nearly half from past rates, even before the corona virus epidemic. Furthermore, load factors at secondary airports were relatively low compared to the 25 largest airports, mainly due to fleets that are incompatible with the fundamentals of the marketplace.

Year 2020 – China’s Airports To See 30% Fewer Passengers. Forecasts accomplished by Boyd Group International previously indicated that China’s airports would handle a total of 1.46 billion passenger movements in 2020. Based on post-COVID estimates, the projection is now 945 million – putting China back to traffic levels of five years ago. There will be no rapid rebound – this figure is the new core demand.

China – U.S. Traffic To Decline By Over 80%. Reversing a 10-year trend, the forecast projects that annual air traffic between the United States and China will plunge from approximately 9.8 million passengers in 2019 to approximately 1.9 million in each of the next three years.

“The main part of this traffic was leisure visitation, which, due to political and economic factors in China, is now essentially dead.” Diplomatic shifts, a declining Chinese economy, and additional and severe restrictions on movements of foreign visitors within China, all are components of new market realities that will end nearly two decades of growth in traffic between the two nations

The report is available from Boyd Group International, and additional information can be found at www.BoydGroupChina.com by clicking here.

Boyd Group International is a leading aviation forecast and research firm, founded in 1984, and works with airlines, airports, financial institutions, and suppliers in exploring future dynamics in aviation. China is one focus of the firm’s work, and BGI is the only independent source of traffic and trend forecasts cover ing that country’s 200 largest airports.

Contact:

Michael Boyd
(303) 674-2000

Key Sections Covered In Clipped Dragons: China’s Airline Industry:

The Foundations of China’s Unique Air Transportation System

Constraints of China’s Linear, Point-To-Point System

Fleet Mix: Non-Optimal For China Growth

The Deflating Economic Bubble & Effects On Air Carrier Strategies

The Vulnerability of Long-Haul Markets

The Deflation of Leisure Travel

The Effects of Business “Decoupling”

More Information Is at BoydGroupChina.com. Click Here.

Media Contact
Company Name: Boyd Group International, Inc
Contact Person: Michael Boyd
Email: Send Email
Phone: 303 674-2000
Address:78 Beaver Briook Canyon Road
City: Evergreen
State: Colorado 80439
Country: United States
Website: https://www.boydgroupchina.com/