CHINA: Air China Pilots Fired, After e-Cigarette Incident

China revoked the licences of two Air China pilots after a vaping incident in the cockpit forced an emergency descent.

A passenger flight from Hong Kong to Dalian had to drop more than 6500m due to a sudden loss of cabin pressure.

Investigators said it was caused by one of the pilots smoking an e-cigarette.

The Civil Aviation Administration of China (CAAC) will also launch a safety crackdown on the Chinese flag carrier for three months and fine the airline 50,000 yuan ($NZ10,964), China Central Television (CCTV) said on its WeChat account.

The cuts to the carrier's 737 flights amount to 5400 hours a month, it said.

The CAAC also suspended the licenses of other staff involved in the emergency incident that was linked to a co-pilot smoking in the cockpit, CCTV said.

It also ordered Air China to undertake a three-month safety review.

The mid-air drama unfolded when one of the pilots, who was vaping, tried to turn off a fan to stop his smoke reaching the passenger cabin.

Instead, he turned off the air-conditioning unit, causing a drop in the cabin's oxygen levels.

Emergency measures were triggered, and oxygen masks dropped.

The plane was forced to descend rapidly.

If a plane loses cabin pressure, the pilot has to bring the aircraft to a lower altitude to keep crew and passengers safe.

Once the crew saw that the air conditioning had been turned off, they reactivated it and brought the flight back to its normal altitude.

The plane went on to complete its flight as scheduled, and none of the 153 passengers or crew were injured.

A third pilot on board, who was not involved in the incident, had his licence revoked for six months and was banned by Air China for two years.

Chinese flight regulations prohibit all flight crew from smoking, and banned passengers from using e-cigarettes on board in 2006.

Air China shares fell as much as 1.4 percent in Hong Kong in response to the safety crackdown, before recovering slightly, against a flat Hang Seng index.

The stock is down nearly 40 percent in Shanghai so far this year, amid a falling yuan and higher oil prices.

BOCOM International analyst Geoffrey Cheng said the crackdown would likely have an impact on Air China's flight schedules, especially as it enters peak travel season, but could also prompt the airline to cut poorly performing routes.

It could have pros and cons, he said.

A Chinese aviation professor, who spoke on condition of anonymity as he was not permitted to speak to media, said the cuts appeared to only apply to Boeing 737 planes stationed at Air China's Beijing headquarters.

For a big company like Air China they can move some 737s to their companies in southwest China or Zhejiang which could lessen Air China's losses, he said.

Air China has several branch offices in places such as Inner Mongolia and Shanghai as well as number of subsidiary airlines.

It operated 269 Boeing 737s out of its 655-strong fleet at the end of December, according to its full-year report issued in March. It has 311 Airbus 320 and 321 jets.


Tourism Observer

CHINA: Chinese Airlines Flying More Seats Than Passengers

Cathay Pacific Airways’ planes were emptier this March than last despite a 19 per cent surge in Hongkongers’ air travel, while the latest traffic figures from mainland China’s ‘Big Three’ state-owned airlines also showed falling capacity utilisation.

Cathay Pacific and subsidiary Dragonair’s planes were 83.9 per cent filled in March, down 3.4 percentage points compared from last March, the company said on Wednesday. It recorded a modest traffic increase of 2.6 per cent in the month, compared to the Hong Kong International Airport’s 4.8 per cent passenger growth that was driven by a 19 per cent surge in trips by Hong Kong residents.

“The growth in passenger numbers was not able to keep pace with the growth in capacity, leading to a drop in load factor,” said Cathay’s revenue management general manager Patricia Hwang.

Load factor is a measure of how much of an airline’s passenger-carrying capacity is used.

The vast potential of China’s outbound travel market has made airlines aggressively increase their offering of international flights by opening new routes and deploying more planes, leading to a spurt in the number of seats on offer.

Cathay’s passenger traffic grew 5.5 per cent in the first quarter while capacity grew 6.5 per cent.

China’s national carrier Air China on Monday reported a 3.1 percentage point drop in load factor to 78.5 per cent in March, even though it carried 4.3 per cent more passengers overall. China Southern Airlines saw a 2.94 per cent drop in load factor that month while China Eastern’s slid 1.4 per cent. All of them have increased their international capacity in the first quarter by around 30 per cent compared to last year.

“Chinese outbound travel fervour, especially to Europe, has cooled slightly since the last quarter of 2015, with terrorist attacks in Paris and elsewhere dampening travel interest. With the economy slowing, people are more prudent with their travel spend. The tightening of the Schengen visa has also made it more difficult for mainland groups to travel,” said Chan Cheong Eu, Hong Kong-based country manager for Greater China South at Qatar Airways.

However, Yu Nan, an analyst at Haitong Securities in Shanghai, said he does not think emptier planes reflect waning travel demand in China, which, he said, is a result of the airlines’ rapid capacity expansion.

“Their strategy is quite clear: to contract domestic capacity and keep up airfare, while on the international side the priority is to win market share even if it is at the cost of load factor. Getting ahead in market share during an economic downturn would give them an edge when the economy picks up – that’s their thinking,” he said.

Bocom International’s Asia head of transportation research Geoffrey Cheng Bik-Hoi agreed the drop in load factor is a result of overcapacity, adding that Cathay was coming off a high base in terms of load factor.

“I wouldn’t say China’s outbound travel demand is tapering off just yet, as the airlines’ first quarter international traffic as measured by revenue passenger kilometres flown is still solid,” he said. Instead, I am more worried about the domestic front.”

Chinese corporate travel agencies said Beijing’s austerity measures continue to dent business travel, the most profitable segment of the domestic air travel market. Air China reported a 2.9 per cent drop in the number of passengers carried on domestic routes for March while China Southern suffered a 5.22 per cent decline.