March 4, 2015

China’s anticipated airline growth on track with launch of Jianxi Airlines

At the end of 2013 it was estimated that there would be a 31% increase in worldwide airline passenger numbers between 2012 and 2017. Of this increase, 24% was estimated to be from the Chinese market. This figure equates to 195 million local passengers and 32.4 million international ones, making 227.4 million in total. The arrival of 2015 has seen the anticipated growth from the Chinese sector of the market rein back a little, but not enough to stop Boeing from increasing their forecasted demand by China for its planes over the next 20 years, having already increased that rate by 6% in 2013 and 7.8% in 2014. This now stands at an annual delivery of 301 per annum, 6,000 over 20 years, or to put it simply, one every 29 hours!
As part of this anticipated growth, the CAAC (Civil Aviation Administration of China) has just approved the launching of Jiangxi Airlines, a new joint-venture between the Jiangxi provincial government and Xiamen Airlines on a 40:60 basis. Jiangxi Airlines will begin by operating five Boeing 737 aircraft on solely domestic routes between Nanchang and Beijing, Shanghai, Guangzhou, Shenzhen and Chengdu. It expects to increase its fleet to eight aircraft in 2016, and to over 30 aircraft by 2020. The intention is also to open more international routes to Thailand, Singapore, Malaysia, Korea and Japan, plus long-haul routes to the US, Europe, and Australia.
Xiamen Airlines will likely provide initial aviation professionals such as pilots, cabin crew, and MRO staff, etc. to Jiangxi Airlines. This is a good time for new domestic carriers in China with local governments offering partnerships which also present favorable tax terms and land resources, as well as reduced operating costs for landing and ground handling fees. Local governments are hoping to stimulate economic growth through the launch of airlines such as Jianxi.



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