CHINA: Hong Kong International Airport In Stiff Competion From Mainland China Airports

Increased demand is giving a boost to all five airports in Pearl River Delta region, but mainland hubs are growing more rapidly.

There was joy in the streets of Foshan’s backwater Gaoming district in mid-April when Guangdong Communist Party secretary Hu Chunhua affirmed plans to build an airport there by 2022.

The new, 35 billion yuan (US$5.1 billion) Pearl River Delta regional airport, designed to handle 30 million passengers a year, will be a key piece in the province’s ambitious plan to have 31 big and small airports by 2030.

It will join the delta’s five existing key air hubs – Hong Kong, Macau, Guangzhou, Shenzhen and Zhuhai – to serve a dynamic area that’s home 66 million people and has an economy as big as South Korea’s.

While mainland China has many airports with few passengers – three-quarters of its 200-plus airports run at a loss – rapid growth in demand for passenger and cargo services in the delta is giving a boost to all five airports, with Hong Kong, Guangzhou and Shenzhen accounting for the most traffic.

Concerns about excessive competition between the airports were unwarranted for now, said Law Cheung-kwok, head of the Aviation Policy and Research Centre at the Chinese University of Hong Kong, because the overall market was still growing.

Passenger numbers can increase in a geometric ratio in the coming years,fuelled by the strong demand of Chinese spenders for travel and the emerging Chinese consumer economy, Law said, while adding that Hong Kong would see “fiercer” competition from mainland airports that were aggressively launching new long-haul flights.

Hong Kong’s role as an international air hub was once highly valued by Guangdong, which saw the city as its gateway to the outside world.

High-value products from factories in the Pearl River Delta used to be trucked into Hong Kong before being flown to overseas markets, but the flow has been changing, especially since the launch of Guangzhou’s new airport in 2004 and Shenzhen’s in 2013.

Hong Kong International Airport, the leading airport in the region, handled 70.5 million passengers last year, up 2.9 per cent year on year.

In comparison, Guangzhou’s Baiyun International Airport handled 59.7 million passengers, up 8.2 per cent. Shenzhen handled 42 million passengers, up 5.6 per cent, and Zhuhai handled 6.1 million, which represented annual growth of 30.2 per cent.

A record 6.6 million passengers passed through Macau airport last year, up 13.7 per cent year on year.

The five major airports, all within 150km of each other, are all striving to expand. Guangzhou plans to add a fourth and a fifth runway by 2025 and Shenzhen has plans in place for a third. Hong Kong aims to open a third runway by 2023 to boost capacity to 100 million passengers a year.

Guangzhou’s existing Terminal 1 was only designed to handle 35 million passengers a year, but a second, bigger, terminal will open next year.

Expected to handle around 45 million passengers a year by 2020, the new terminal is being built at a cost of about 19 billion yuan.

Shenzhen is also planning a new terminal, with passenger traffic at the four-year-old airport now just 3 million short of its 45 million capacity.

However, Zhuhai, billed as China’s biggest airport when it opened in 1995, has never come close to its 35 million passenger annual capacity.

People like retiree Zhu Yinghua and businessman Huang Honghui are making the most of the leisure and business opportunities provided by the region’s increasing air traffic.

Zhu, a 65-year-old retired teacher from Guangzhou, made three overseas trips last year, visiting Russia, Turkey and the United States with her husband and friends.

The trips cost between 6,000 and 10,000 yuan, quite affordable for retired teachers and civil servants in cities such as Guangzhou who receive monthly pensions of more than 6,000 yuan.

It’s much easier to travel to the other end of the world these days than travelling to Shanghai 20 years ago, said Zhu, who had never flown until 1993, when she was 41, and who made her first overseas trip in 1996 when she visited Singapore, Thailand and Malaysia via Hong Kong.

I have to say now I like the Shenzhen and Guangzhou airports very much. They are more beautiful and modern than any other airport in China, including Beijing or Hong Kong.

The number of tourists heading overseas from mainland China has more than tripled in the past decade, hitting 122 million last year, and Guangzhou and Shenzhen are among the top sources.

The “Greater Bay Area”, a region which includes Hong Kong, Macau, Guangzhou, Shenzhen, Zhuhai and some other mainland cities, is becoming the world’s biggest market for aviation services.

Passenger numbers in the region will reach 223 million a year by 2020, up from around 175 million last year, according to the China Civil Airports Association, which said such traffic would dwarf other bay areas such as Los Angeles, New York and Tokyo.

Airports in the Tokyo Bay Area, home to 43 million people in 2015, handled more than 112 million passengers that year.

Hong Kong, the world’s largest international air cargo airport, handled 4.5 millions tonnes of air cargo last year according to the Airport Authority, and the China Civil Airports Association predicts annual cargo throughput in the region, presently about 8 million tonnes, will top 10 million tonnes by 2020.

Huang, the 40-year-old co-founder of leading Guangzhou air logistics company R&T Transportation, says business is booming, with the firm handling about 5,000 tonnes of cargo a month, more than triple the amount a decade ago.

I started up my logistics business 20 years ago and most clients are factories in the delta, from electronics giants like Huawei and Samsung to garment processors, Huang said.

In 1997, my company handled an average of 500 tonnes of cargo a month, 90 per cent of which was exported through Hong Kong airport.

He said Guangzhou’s airport now handled three-fifths of R&T’s shipments because it was closer to most clients.

If we pick up a delivery at 6pm, we can catch the flights leaving Guangzhou at 2am it would take about two days to fly through Hong Kong, Huang said.

Meanwhile, airports in Southwest China cities such as Kunming in Yunnan province and Chengdu in Sichuan province were grabbing air cargo business from Hong Kong and Guangzhou.

It took three days to travel from Kunming to Guangzhou by truck 10 years ago, Huang said.

But now, thanks for the rapid development of China’s highway network, it only takes one day. Flying out of Kunming airport would help cut costs by 30 per cent compared with Hong Kong airport.

R&T now handles about 1,000 tonnes of air freight a month in Kunming.

Local authorities in major mainland cities such as Beijing, Shanghai, Guangzhou, Xian, Zhengzhou and Shenzhen were handing out generous subsidies and extra investment for local airports so they could operate more international routes, in line with the central government’s “belt and road” trade and infrastructure initiative.

For example, the government of Zhengzhou, in Henan province, is offering subsidies of up to 300,000 yuan per overseas flight, Huang said.

While Hong Kong will remain a busy airport, its relative regional significance is set to wane as mainland airports get bigger and mainland airlines improve their hardware.

Mainland Chinese carriers bought 164 Boeing planes last year, about a quarter of Boeing’s total deliveries and the most from any country.

The mainland’s three designated hubs – Beijing, Shanghai and Guangzhou – are trying hard to gain a prominent foothold on the global flight map.

In the 1990s and early 2000s, almost all tour groups from South China flew via Hong Kong, but times have changed. When Zhu, the Guangzhou pensioner, flew to New York from Guangzhou last year she transited in Beijing because it’s 1,500 yuan cheaper than flying through Hong Kong.

Zhou Guosheng, a Guangzhou-based tour guide who has been in the business since the 1990s and now specialises in luxury overseas trips, said: A night in Hong Kong plus shopping time was once standard, but not any more.

Big mainland airports are even trying to lure non-Chinese travellers, who are now offered 72-hour transit visas.

Hong Kong’s airport will see growing challenges from mainland ones, according to Guangzhou-based aviation researcher Peng Peng, who predicted Guangzhou would overtake Hong Kong airport in passenger numbers within 10 years.

VIETNAM: Chinese Tourists In Vietnam

A record year for visitors from the Chinese mainland is filling municipal coffers, but tensions are emerging as the Vietnamese tourism industry struggles to keep up.

A long day following the tourist trail in Da Nang, on Vietnam’s central coast. And as the group’s attention fades, somewhere around Linh Ung Pagoda and its huge statue of the Goddess of Mercy, their tour guide rattles off an alternative version of Vietnam’s history and culture.

It’s late and it’s hot, and thoughts have turned to air-conditioned hotel rooms, so the Chinese group can be forgiven for missing the subtle geopolitical implications of what their unlicensed leader is saying.

For instance, the guide tells them while Vietnam is no longer a part of China and has claimed its independence, it still depends on China and pays tribute to it. Or that the city’s My Khe Beach, a broad sweep of white sand once dubbed China Beach by American soldiers, really belongs to China.

That such bold claims are being made should perhaps come as no surprise. Many of the unlicensed guides who have sprouted up to feed off Vietnam’s Chinese tourism boom will feel they are merely playing to an audience that naturally sees things from a China-centric perspective, or that they are simply rehashing official Chinese narratives of domination over Southeast Asia and particularly the South China Sea – the very body of water overlooked by Da Nang.

But the fact that such accounts are being given here on Vietnamese soil is something far more controversial, and is just one example of the growing tensions brought on by an influx of Chinese visitors, which has filled municipal coffers but left the country’s tourism industry struggling to meet demand.

A record 2.7 million Chinese tourists arrived in Vietnam in 2016 – a 55 per cent increase over the previous year, according to the Vietnam National Administration of Tourism. That means tourists from mainland China accounted for 30 per cent of Vietnam’s total foreign arrivals.

Most Chinese visitors head to either Da Nang or Nha Trang, two coastal cities in the centre of the country famed for their beaches, historical sights and seafood.

This has caused headaches for the local tourism industries, and especially Vietnamese guides.

Some Chinese guides operating in the country have been accused of telling their groups that Vietnam hates China, and that they should not believe anything the local guides say. They are also accused of using regional dialects so that Mandarin- or Cantonese-speaking Vietnamese guides cannot understand them.

“Lately, some unlicensed Chinese guides have provided incorrect information on the territory and island disputes in the South China Sea,” says Nguyen Huu Tuan, sales manager at In-Out Tour Company, based in Ho Chi Minh City. “Unlicensed Chinese guides have destroyed the truth, causing worries for the Vietnamese people and the government,” he says.

It’s not only what the guides are saying – but that they are operating at all – that has angered local operators.

“By law, foreigners are not allowed to be tour guides in our country,” says Tran Tra, chairman of the Da Nang Tour Guide Club. At first, “Vietnamese tour guides were happy at the increase in Chinese arrivals in 2016,” he says, as they thought “they would have more opportunities to earn more money and increase their living standards”.

But the opposite happened – they have been losing business because “Chinese tour operators have illegally assigned Chinese tour leaders to act as guides”.

Aside from the legal aspects, local guides feel slighted by what they see as a lack of cooperation from Chinese guides and operators, says Cao Tri Dung, chairman of the Da Nang Travel Association.

Tensions reached a head in July, when the governments of Da Nang and Nha Trang cracked down on unlicensed guides. Da Nang deported four Chinese guides for working illegally. The guides were also fined US$4,200, while the company that hired them had its licence revoked and was fined US$560. The same month, Khanh Hoa Province, home to Nha Trang, expelled 66 Chinese who were working illegally in the travel industry.

The growing conflict over guides can be seen as part of a larger narrative of the countries’ relationship.

Despite close economic ties, China and its people are often unpopular with ordinary Vietnamese and recent diplomatic disputes, particularly in the South China Sea, have exacerbated resentment. Vietnam is proud of its history and land, and perceived efforts by foreign guides to distort facts are not taken lightly. At the same time, the behaviour of some Chinese tourists has not helped.

In June, a Chinese visitor reportedly burned Vietnamese currency in front of a bar in Da Nang. Chinese visitors have also been accused of harassing street vendors, trying to pay for items with Chinese yuan and threatening staff at Cam Ranh International Airport outside of Nha Trang. The Da Nang government has responded by publishing 5,000 copies of an etiquette booklet written in Chinese. These will be distributed in public places and list acceptable behaviour, such as queueing to buy tickets, respecting local culture and not littering or getting drunk in public.

Despite the blips, many Vietnamese recognise the spending power of Chinese tourists as something to be welcomed. As Tuan, from the In-Out Tour Company, says, “the fact that more and more Chinese visitors are coming will boost local tourism, and the economy”.

And with Da Nang and Nha Trang now firmly established as popular holiday spots for affluent Chinese, regional governments recognise more can be done to welcome their visitors. Tran Chi Cuong, deputy director of the Da Nang Tourism Department, says Chinese tourists have become frustrated at a lack of Chinese-speaking Vietnamese guides, so the department is now working to educate and train more guides to meet these demands. “We are also collaborating with the Da Nang University of Foreign Languages, tourist sites and travel agents to build and provide Chinese language resources at certain tourist attractions.”

Airline VietJet has launched a weekly flight from Zhengzhou to Da Nang on January 12.

Through initiatives such as this and the etiquette booklet, Da Nang and Nha Trang hope to nurture the welcome aspects of Chinese tourism even as they cut down on some of the less welcome ones – tour guides with bold claims among them.

CHINA; Passenger Tries To Open Emergency Door

A plane passenger who tried to open an emergency exit door while the craft was mid-flight has been detained by Chinese police.

A flight security officer noticed the woman trying to open the door while the Capital Airlines plane was enroute from Changsha in Hunan province to Sanya in Hainan on Monday afternoon.

When he stopped the woman she threatened to commit suicide and two other passengers then came to her aid.

A scuffle then broke out between the security officer and the three passengers, zgjtb.com, a news portal under the Ministry of Transport, cited a microblogger as saying.

But flight attendants came to the aid of the security officer and helped him to subdue the trio and alert airport police.

“It’s really not an easy job to be flight crew, especially when facing the daredevils,” the microblogger, RogerStandy, said. “Fortunately knives are banned on flights.”

The flight landed safely in Sanya at around 2pm.

The woman, who was in her 20s, and “other relevant individuals” were handed over to Sanya airport police, who were investigating, Beijing Capital Airlines said.

The incident follows a series of cases in which mainland Chinese passengers have attempted to open the emergency doors of aircraft.

In one such case, a passenger on a flight from Hangzhou (to Chengdu ), triggered a safety scare by yanking open an emergency exit just minutes before a plane was due to take off to “get some fresh air”.

Another passenger, flying from Urumqi to Zhengzhou, managed to open an emergency exit shortly after a plane had landed, though he later explained that he had been nervous during the landing and thought the handle was a handrail that he could grab onto for support, according to China News Service.

In the first five months of 2015, the Civil Aviation Administration of China dealt with 12 cases in which Chinese air passengers had tried to open emergency exit doors.

In May, a passenger in Yanji in northeastern Jilin province was criminally charged for endangering public safety. He is allegedly opened an emergency door before take-off, delaying the flight more than four hours.

CHINA: Restaurant Owner Serves Cockroaches In Her Food

Mum-to-be horrified after getting the brush-off when she complained.

A woman who is nine-months pregnant found a cockroach in her bowl of noddles in a restaurant in central China, a mainland news portal media reports.

But what angered her more was the restaurant owner’s cavalier attitude towards the discovery.

“The feature of our restaurant is the taste of cockroach,” the owner of the eatery in Zhengzhou in Henan province was quoted as saying. “It’s normal to find cockroach in food. Several days ago, I myself ate one. You are just fussy.”

The woman said the owner’s attitude only changed after she contacted police and officers arrived at the restaurant.

The owner said he was willing to give her compensation of 300 yuan (US$45 or HK$353) and take the woman to hospital for a medical check-up.

The woman agreed but while she was undergoing the examination, the man fled.

The restaurant has a poor record in food safety, according to a local news portal.

UAE: Emirates To Fly To More Destinations In China

Emirates Airline has announced that it will expand its services in mainland China with four weekly flights to Yinchuan and Zhengzhou, starting from May 3, 2016.

The Dubai-based carrier said in a statement that the new services will expand its destination offering on the mainland to five, including Beijing, Shanghai, and Guangzhou.

Yinchuan, the capital of Ningxia which has a large Muslim population, is positioned as a hub for economic and trade cooperation and cultural exchange between China and the Middle East.

Zhengzhou, the capital of Henan Province and a major transportation interchange for central China, is an educational, technological and economic centre.

“With the opening of these new strategic routes, Emirates looks forward to contributing to the enhancement of China’s trade links with the rest of the world, in particular with the UAE and Arab world.

We believe the new international air links that we are launching will help create tourism and trade opportunities for Chinese business and leisure travellers that may not otherwise exist,” said Sheikh Ahmed bin Saeed Al Maktoum, chairman and chief executive, Emirates Airline and Group.

Emirates flights to Yinchuan and Zhengzhou will depart on Tuesday, Wednesday, Friday and Saturday using a Boeing 777-200LR aircraft, offering 266 seats and 14 tonnes of cargo capacity in the bellyhold.

Popular commodities expected to be transported on these services include electronics, such as mobile phones from Zhengzhou, and agricultural products such as goji berries and cashmere from Yinchuan.

Ties between Dubai and China continue to grow stronger. A growing number of Chinese banks and businesses are establishing branches within Dubai’s business and financial districts and the city is now home to over 3,000 Chinese companies and 200,000 Chinese residents. Growth in visitor numbers to Dubai from China grew by 25 percent in 2014.

Emirates was the first airline to establish non-stop connectivity between the Middle East and mainland China, first with freighter operations to Shanghai starting in 2002, followed by passenger services in 2004.

“As China's regions continue to open up to the global economy, Emirates remains keen to support this with the further expansion of air services in mainland China. In particular we’re interested in exploring the opportunity of daily services to Hangzhou and Chongqing, and a second daily service to Guangzhou,” said Al Maktoum.

UAE: Emirates Connects China To The World

Emirates has confirmed it will introduce a four times weekly link between its Dubai International Airport hub and Yinchuan’s Hedong International Airport from May 3, 2016, with an additional onward leg to Zhengzhou’s Xinzheng International Airport. The flight will be operated by a 266-seat Boeing 777-200LR and will bring its offering mainland China to five points, adding to existing flights to Beijing, Guangzhou and Shanghai.

United Arab Emirates (UAE) carrier, Emirates Airline has made the surprising announcement that its next growth move into the Chinese market will be through links to the cities of Yinchuan and Zhengzhou. These destinations are certainly not household names, but they mark a consistent pattern by the airline to add capacity to Asia during the closing months of 2015 and will see the carrier pioneer long-haul network services to these markets.

Emirates has confirmed it will introduce a four times weekly link between its Dubai International Airport hub and Yinchuan’s Hedong International Airport from May 3, 2016, with an additional onward leg to Zhengzhou’s Xinzheng International Airport. The flight will be operated by a 266-seat Boeing 777-200LR and will bring its offering mainland China to five points, adding to existing flights to Beijing, Guangzhou and Shanghai.

Although the gateway airports to the Ningxia Hui Autonomous Region and Henan province were only ranked the 40th and 19th largest facilities in China by passenger traffic last year, they are located in two of China’s fastest growing cities and will now be better connected to global markets through the arrival of the Middle Eastern hub carrier.

Yinchuan, the capital of Ningxia, lies to the West of the Yellow River and to the East of Helan Mountain. With a large Muslim population, it serves as a gateway connecting China to Arabic countries, and is positioned as a hub for economic and trade cooperation and cultural exchange between China and the Middle East.

Zhengzhou, the capital of Henan Province and a major transportation interchange for central China, is an educational, technological and economic centre. The second largest city in central China, Zhengzhou’s strategic location has enabled the city to become one of the largest economic hubs in China.

“With the opening of these new strategic routes, Emirates looks forward to contributing to the enhancement of China’s trade links with the rest of the world, in particular with the UAE and Arab world,” said HH Sheikh Ahmed bin Saeed Al Maktoum, Chairman and Chief Executive, Emirates Airline and Group.

“We believe the new international air links that we are launching will help create tourism and trade opportunities for Chinese business and leisure travellers that may not otherwise exist,” he added.

With its established network across Africa, Europe and the Middle East, Emirates will connect Yinchuan and Zhengzhou with many new destinations and help boost trade and tourism flows to the growing central and western parts of China where these cities are located. Although the two destinations are currently linked, strong demand will likely lead to them being separated and served individually in the future.

The two new cities in China are the latest capacity expansion for Emirates in the Asia-Pacific region, where it now serves over 40 destinations. Another new non-stop market next year will be Brisbane, which will be linked directly from Dubai rather than with a Singapore stopover from May 2016.

Earlier this month the UAE carrier began two-class Airbus A380 service to Bangkok and will add capacity on the Dubai - Kuala Lumpur city pair from January 1, 2016 and Dubai – Taipei from May 1, 2016 when it deploys further 615-seat SuperJumbo variants. The two-class aircraft can add as much as 25 per cent more seats to the 489-seat version of the aircraft operating on most routes. Emirates is also adding capacity from Dubai to Delhi, Dhaka, Mashad, Phuket Sailkot and Manila, while this week it launched flights to Sabiha Gokcen Airport, on the Asian side of Istanbul.

But, it is clear that China will continue to see network and capacity growth from Emirates as ties between Dubai and China continue to grow stronger. A growing number of Chinese banks and businesses are establishing branches within Dubai’s business and financial districts and the city is now home to over 3,000 Chinese companies and 200,000 Chinese residents. Growth in visitor numbers to Dubai from China grew by 25 per cent in 2014 and additional routes are under discussion.

“As China's regions continue to open up to the global economy, Emirates remains keen to support this with the further expansion of air services in mainland China. In particular we’re interested in exploring the opportunity of daily services to Hangzhou and Chongqing, and a second daily service to Guangzhou,” said HH Sheikh Ahmed bin Saeed Al Maktoum.

There has been an increase in long-haul activities into China’s regional cities over the last ten year with notable growth in non-stop links to both Europe and North America. Alongside the big three mainland Chinese hubs, more than 15 destinations are now directly linked to Europe with new services being introduced at Chengdu (since 2006), Nanjing (since 2008), Hangzhou (since 2010), Urumqi and Xiamen (since 2011), Chongqing, Shenyang and Wuhan (since 2012), Xi’an (since 2013), Changsha and Kunming (since 2014) and Ningbo this year.

In North America the first non-stop flights outside of Beijing, Guangzhou and Shanghai arrived in 2012 when Sichuan Airlines commenced flights between Shenyang and Vancouver. In the last two years United Airlines has added a link between San Francisco and Chengdu, and a Xi’an service will also be added from May 2016, while China Southern Airlines now links Wuhan to San Francisco and China Eastern Airlines has regular flights between Nanjing and Los Angeles.

Yinchuan’s new non-stop link to Dubai will actually be Hedong International Airport’s second regular link to the metropolis as Sichuan Airlines introduced a twice weekly service this September using an Airbus A330. This is its only long-haul operation, although international service are also offered to Bangkok, Seoul and Taipei.

Schedule data from OAG shows that departure capacity from Hedong International has risen by an average annual rate of 51.4 per cent between 2005 and 2014 and is forecasted to grow a further 14.0 per cent this year, based on published schedules. China Eastern Airlines is the largest carrier at the airport with a 24.8 per cent capacity share in 2015 ahead of Air China (17.2 per cent), China Southern Airlines (14.9 per cent) and Shandong Airlines (10.1 per cent).

Zhengzhou’s one-stop, but direct, offering to Dubai from Xinzheng International Airport will be a key hub link for the city and will add its growing international network. Since the start of this decade over ten new international destinations have been added and multiple daily flights are now offered to Bangkok, Hong Kong, Seoul and Taipei.

Schedule data from OAG shows that departure capacity from Xinzheng International has risen by an average annual rate of 43.6 per cent between 2005 and 2014 and is forecasted to grow a further 6.2 per cent this year, based on published schedules. China Southern Airlines is the largest carrier at the airport with a 31.3 per cent capacity share in 2015 ahead of Shenzhen Airlines (10.4 per cent), China Eastern Airlines (9.0 per cent) and Xiamen Airlines (6.4 per cent).

CHINA: Cargolux To Buy 5 Boeing 747-8Fs

Cargolux is in talks with Boeing to buy five more 747-8F freighters, a deal valued at USD$1.9 billion at list prices.

The aircraft would serve a planned joint venture between Cargolux and its 35 percent shareholder Henan Civil Aviation Development & Investment (HNCA) to be based in Zhengzhou, north central China.

"At this moment the plan is to purchase another five 747s for the project, on top of the existing fleet," chief executive Dirk Reich said after taking delivery of the 13th of 14 747-8 freighters that the Luxembourg-based carrier has ordered.

Plans for the new Cargolux China airline are expected to be completed before the end of the year with a view to starting flights in early 2017, Reich said.

Cargolux already operates a hub at Zhengzhou, home to the main production base of Apple's primary iPhone assembler, Foxconn.

Shipments from there have surged in recent weeks amid strong demand for the latest models, he said.

"Especially in the last weeks before the weekend of the (iPhone 6s) introduction, we have seen big shipments from China to all over the world particularly the US," Reich said.

"It looks like the sales are in the same range as they were last year, so it is an early sign of the high season for air freight starting."