CHINA: Ever Growing Tourism Makes China World's Fastest Growing Aviation Market

The fortunes of China's largest airlines have risen with the ascent of the Chinese travelers, whose demand for overseas trips have helped make it the world's fastest-growing aviation market.

However, the airlines took many U.S. dollar-denominated loans to buy planes as part of an ambitious fleet expansion, exposing them to the depreciation of the yuan which lost 6.6% of its value against the dollar last year.

Oil prices, which plunged in recent years, have also started to firm, causing jet fuel costs to begin to rise.

China's flag carrier on April 27 posted profit attributable to shareholders of RMB 1.47 billion (USD 213 million) for January to March, down from RMB 2.4 billion during the same period last year.

Its domestic rival China Eastern Airlines said net profit attributable to shareholders was RMB 2.82 billion for the quarter, up from RMB 2.6 billion a year earlier.

China's top economic planner has approved China Southern Airlines' 14.8-billion-yuan ($2.15 billion) plan for a base at a new Beijing airport currently under construction, a day after it approved a similar scheme by China Eastern Airlines.

The National Development and Reform Commission (NDRC) said in a statement on Friday that China Southern will fund 30% of the construction cost, while the remaining RMB 10.3 billion will be financed using domestic bank loans.

China Southern Airlines plans to build a 14.8-billion-yuan (USD 2.15 billion) base at a new Beijing airport, while China Eastern Airlines has a similar plan at 13.2 billion yuan.

China Eastern's 13.2-billion-yuan plan for a similar base at the new airport was given the green light on Thursday.

The airport will be the world's largest in surface area when completed, roughly in line with Hartsfield-Jackson Atlanta International Airport, the world's busiest by number of annual passengers.

China's economic planner approved China Eastern Airlines' 13.2-billion-yuan (1.54 billion pounds) plan for a base at an expansive new airport in Beijing that could eventually be the world's largest, when completed.

The National Development and Reform Commission said in a statement on its website that the base will cover 1.17 million square meters, and 30% of the investment, or RMB 3.96 billion, will be funded by China Eastern.

The remaining RMB 92.4 billion will be financed using domestic bank loans, the statement added.

China plans to complete the first phase by 2019, and will be able to serve 45 million passengers a year with four runways on the first opening. Two more phases would push the capacity to an annual count of 100 million passengers.

That would put the airport as the world's largest in surface area, roughly in line with Hartsfield-Jackson Atlanta International Airport, the world's busiest by number of annual passengers.

Upon completion, rival state carrier, China Southern Airlines, will also relocate to the new airport from the existing Beijing Capital International Airport, the airport project managers told reporters last year.

They said China Eastern and China Southern will handle 40% of the new airport's footfalls.

Beijing Capital International Airport (Beijing PEK) ranked second in the top 20 busiest airports last year, growing 5% to over 94 million passengers in 2016.

Beijing Capital International Airport (Beijing PEK) ranked second in the top 20 busiest airports last year, growing 5% to over 94 million passengers in 2016, according to Airports Council International (ACI), global trade representative of the world’s airports.

Atlanta-Hartsfield-Jackson (ATL) retained the top spot as the world’s busiest airport, boasting over 104 million passengers, 2.6% more than 2015.

Beijing PEK saw subdued growth in previous years as it faced continuing capacity constraints. Conversely, ATL experienced above average growth levels spurred by aircraft fleet expansions in 2015 by Delta Air Lines, its major operator.

Traffic at the world’s 20 busiest air passenger hubs grew 4.7% in 2016. With over 1.4 billion passengers passing through their airports in 2016, this group of 20 represents 18% of global passenger traffic.

Asian airlines continued to make important inroads in the North American market on key international and trans-Pacific segments across airport pairs, particularly between North America and China.

One of the major Chinese airports serving the trans-Pacific routes and other international routes includes Shanghai Pudong (PVG), which grew 9.8% in 2016 to over 66 million passengers. It climbed to ninth place in 2016.

The Chinese hub also serves the catchment area of Shanghai, one of the most populous city markets in the world and a major centre for trade and business. PVG, which represents over 60% of Shanghai’s passenger traffic in 2016, and Hongqiao (SHA), the city’s sister airport, surpassed the 100 million passenger mark in combined passenger traffic.

Shanghai joined the ranks of the world’s busiest city markets in 2016, in the company of London, New York, Tokyo and Atlanta.

The Chinese government has selected China Eastern Airlines to be part of a pilot scheme to reform state-owned enterprises to mixed Public/Private ownership models.

The scheme, which is being rolled out in a slow and controlled manner, is intended to reinvigorate China's bloated public sector by creating globally competitive multinational corporations capable of turning a profit by 2020.

As part of the first pilot reform scheme, the National Development and Reform Commission (NDRC) and the State-owned Assets Supervision and Administration Commission (SASAC) have included a broad spectrum of SOEs. Aside from China Eastern, they include China Southern Power Grid, Harbin Electric Corporation, the China Nuclear Engineering & Construction Corporation, and China Shipbuilding Industry Corporation. More precise details will be released shortly the official Xinhua news agency said last week.

The reform process has been in motion for a few years, with China Eastern selling a 3.55% stake to Delta Air Lines back in 2015 for USD450 million. China Southern is also in the process of securing regulatory approval for the sale of a 2.76% stake to American Airlines.

UNITED KINGDOM: Heathrow Was Busiest Airport In 2016

Travellers with a habit of arriving at the airport at the very last second, pay close attention to the latest list of the busiest airports in Europe.

London Heathrow was the busiest airport in 2016, serving 75.7 million passengers, according to statistics from the European airport trade association, ACI Europe. That was far ahead of Paris-Charles de Gaulle at 65.9 million and Amsterdam-Schiphol at 63.6 million. Frankfurt retained its position as fourth busiest, followed by Istanbul-Atatürk. This year set a new record for airport travel in Europe, with more than two billion passengers travelling through airports on the continent.

Overall, passenger traffic around Europe grew about 5%, with low-cost carriers driving much of the increase in traffic. The increase in low-cost flights – often landing in smaller or secondary airports – led to a lot of growth in those kind of facilities, like Keflavik (Reykjavik) with an increase of 40.4%, Berlin (+36.7%), Sofia (+21.8%), Bucharest (+18.3%) and Krakow (+18.1%).

The fastest-growing airports for passenger traffic are centred in Eastern Europe, with Oradea, Iasi, and Bucharest BBU in Romania at the top of the list. Oradea, a city in the northeast near the border with Hungary, saw its passenger traffic grow by an astounding almost 500%. The Romanian cities were followed by Ostend, Belgium and Palanga, Lithuania. Iceland’s Keflavik Airport saw an incredible increased in traffic as well, with a 66% increase in passenger traffic in December 2016, compared to the same month 2015.

Around the world, Hartsfield-Jackson Atlanta International airport is the busiest. According to 2015 statistics, London Heathrow is the sixth busiest airport worldwide, while Paris-Charles de Gaulle Airport came in ninth. The busiest airport for international passengers in 2016 is Dubai Airport.

USA: Congress Urged To Review State Of Airline Business

The last time Congress convened a panel to look into competition and antitrust issues in the airline industry, carriers TWA, Northwest Airlines and America West were still operating.

That was more than 20 years ago, and a coalition of travel organizations thinks it's about time for another review, especially because mergers and bankruptcies have put control of more than 70% of domestic travel in the U.S. in the hands of four major carriers.

“The time has come to reexamine the state of competition in the U.S. domestic and international air travel marketplace,” says a letter to four key members of Congress from a coalition that represents online travel agents, hotel operators and airport managers, among others.

The group complains that fliers have fewer choices at some hub airports and service has been cut to many smaller airports.

Delta Air Lines, for example, carries about 74% of all passengers out of Hartsfield-Jackson Atlanta International Airport and Southwest Airlines flies 95% of passengers out of Chicago Midway International Airport, federal data show.

At Memphis International Airport, the number of flight departures has dropped by almost half in the last eight years, according to federal statistics.

Airlines say there is no need for a congressional study because fares are low and airlines are investing heavily in new planes and remodeled terminals, primarily because of cheap fuel costs and high demand for flights.

“The fact that demand is strong shows that passengers are making the connection between a healthy airline industry and a better flying experience,” said Vaughn Jennings, a spokesman for Airlines for America, the trade group for the nation's airlines.

USA: Spirit Airlines Announces Minneapolis & New Orleans Routes

American low-cost carrier Spirit Airlines announced it will begin flights to Minneapolis/St. Paul (Minneapolis-Saint Paul International Airport – MSP) and New Orleans (Louis Armstrong New Orleans International Airport – MSY) from Atlanta.

With the addition of the new routes, Spirit Airlines will serve 17 cities from Atlanta.

Spirit Airlines already flies to Atlantic City, Baltimore/Washington DC, Boston, Chicago, Cleveland, Dallas/Fort Worth, Detroit, Fort Lauderdale, Fort Myers (seasonally), Houston, Las Vegas, Los Angeles, Orlando, Philadelphia, and Tampa.

Spirit Airlines will become the third airline to operate flights between Atlanta and New Orleans as both Delta and Southwest already fly this route. Last year, Delta held approximately 68-76% of the market share while Southwest held around 25% with close to around 800 passengers per day between the two cities.

Meanwhile, Spirit Airlines will become the fourth airline to operate flights between Atlanta and Minneapolis/St. Paul behind Delta, Southwest, and Frontier Airlines, who operates seasonal flights.

There are about 1,000 passengers per day on average that fly between the two cities, according to the U.S. DOT Domestic Airfare Consumer report. Delta hold about around 70-72% of the market share while Southwest has typically held close to 20%.

“We are extremely excited to announce we’re expanding our low-fare nonstop service from Hartsfield-Jackson Atlanta International Airport (ATL),” said Mark Kopczak, Spirit Airlines’ Vice President of Network Planning.

“Spirit’s super low Bare Fares, with Frill Control allow customers to choose only those extras they want to pay for and gives them the most control over their travel budget. By saving on air travel, our customers will have more money left over for when they get to their destination.”

“We are excited that Spirit Airlines will launch service to two new destinations from Atlanta,” said Miguel Southwell, General Manager of the Hartsfield-Jackson Atlanta International Airport. “Additional nonstop routes from Atlanta are not only good for business, but they also give our customers more choices and greater access. I have no doubt that customers will greatly appreciate the new service.”

Since launching flights in February 2006 to Atlanta, Spirit Airlines has increased its presence quite a bit; the airline launched a major expansion over the summer by adding nine new destinations from Atlanta. According to U.S. DOT data, Spirit flew 431 flights in July of this year with 88.73% load factor, and it flew 466 flights in August with a 78.27% load factor.