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China Plans A380 Order

Sat Sep 07, 2002 12:09 pm

China's Xinhua Net has reported that China will order some A380 for it's upcoming 2008 Beijing Summer Olympic Games.

China currently has 178 Airbus', most of them are 320/330/340.
 
Airbus A380
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RE: China Plans A380 Order

Sat Sep 07, 2002 4:14 pm

Sorry for being ignorant, but does any China airlines operates the A330? Other than Cathay and Dragonair...?

Airbus A380
 
backfire
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RE: China Plans A380 Order

Sat Sep 07, 2002 4:26 pm

Nope. Only Cathay and Dragonair.
 
dynkrisolo
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RE: China Plans A380 Order

Sat Sep 07, 2002 9:08 pm

But China is a majority holder of Dragonair, so it's not a stretch. Anyhow, I think they probably meant the A300 which a few Chinese airlines are operating.

China will order anything, but I don't think China needs the A380. Air China can't always fill their B747s. How can they manage to fill the A380?
 
hkgspotter1
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RE: China Plans A380 Order

Sat Sep 07, 2002 10:07 pm

"China will order anything"

"Can't always will their 747's"


They even fly 744's on the Beijing - Shenzhen route, so are you saying they are empty ?
 
godbless
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RE: China Plans A380 Order

Sat Sep 07, 2002 10:13 pm

In China they for some parts still take a different approach when ordering airplanes than just the economical side...
There are some airlines (China Southern?) that have a fleet of A340's and B777's so I can imagine that they will order the A380 if they need them or not...
But I must be honest and say that I don't have too much of a clue regarding the aviation business in China (facts & numbers...).

Max
 
manni
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RE: China Plans A380 Order

Sat Sep 07, 2002 10:28 pm

With a potential of 1.5 billion people in China alone, I can easily see Chinese airlines ordering the A380. In fact, I'm surprised they did not order them already.
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bobcat
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RE: China Plans A380 Order

Sun Sep 08, 2002 1:54 am

so that explains why there were dozens of Airbus executives
in Beijing hotels last week.... (at Grand Hyatt Beijing and
Courtyard New World, near Temple of Heaven)  Smile

No doubt there were some serious discussions going on...
 
dynkrisolo
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RE: China Plans A380 Order

Sun Sep 08, 2002 11:33 am

Hkgspotter1:

Yes, Chinese airlines order everything. For example, China Southern has both the A320 and 737NG, Air China has the 737NG and soon the A319. Air China used to have both the A340 along with the 777.

And what does flying the 747 between Shenzhen and Beijing prove? Air China has over capacity problems, that's why the have unloaded the older 747s and A340s and attempted to unload some of the 777s. Because they can't more effectively use their 747s, that's why they are sending them to fly domestic routes. How many Air China's routes have more than two daily 747 or 777 flights? I'm sure they have a few, but I doubt there are enough of them to justify ordering the A380.
 
Spaceman
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RE: China Plans A380 Order

Sun Sep 08, 2002 12:56 pm

It might not make sense right now in our global economic crisis, but few years down the road things might just pick up a bit. In this business you don't just look at the present situation you have to anticipate future growth and opportunities. China has the potential to become the world's greatest aviation market, so why shouldn't they be thinking about the A380?
 
hkgspotter1
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RE: China Plans A380 Order

Sun Sep 08, 2002 1:43 pm

The reason they have two types of the same size is often due to Politics.

When did CA order the A319 ?, they had the A318 on order but since the P&W engine is not ready I heard they cancelled them.
 
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RayChuang
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RE: China Plans A380 Order

Sun Sep 08, 2002 6:39 pm

I'm not surprised that China plans to buy the A380.

They could become the launch customer for the A380-800 Combi, given the large amount of goods shipped out of China.
 
dynkrisolo
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RE: China Plans A380 Order

Sun Sep 08, 2002 9:33 pm

Hkgspotter1:

That's what I meant when I said they order everything. The order everything because of politics. If they order the A380, it will once again because of politics and prestige.

CA has switched their 8 A318 orders to 6 A319 orders.
 
roguetrader
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RE: China Plans A380 Order

Sun Sep 08, 2002 11:18 pm

China has the potential to become the world's greatest aviation market, so why shouldn't they be thinking about the A380?

For the same reason the A380 (or the 747400) has a small place in the current largest aviation market today - people prefer high frequency point to point service with an ever increasing network of cities. Not more limited service all piped through the crowded mega hubs.

This Chinese A380 interest is a perfect example of most of the planes' customers so far. The A380 will be a great ego boost and publicity vehicle for the Olympics and other customers who buy for noneconomic reasons.

They could become the launch customer for the A380-800 Combi, given the large amount of goods shipped out of China.

This is very true. The A380 has great potential as a freighter.

The order everything because of politics. If they order the A380, it will once again because of politics and prestige.

This is also true. Take a look at the top 6 airlines in the world, and none of them are interested in the A380, they are interested in only market forces. Below this, you start to encounter more airlines that are interested in politics and prestige - these are the prime targets for A380 sales. In fact, the A380 is perfect for government controlled airlines or anywhere that government plays a big role in deciding where airlines can fly. If you've got 1000 people that want to fly between point A and point B every day, nonmarket forces like the government finds it easy to say, 'fine, put them on 2 huge airplanes that fly when we say they will fly.'... as opposed to market forces which would rather have 10 smaller planes at convenient schedules. The more governement is involved, the more desire for the A380, the more market forces dominate, the less attractive it becomes.

If the Communist regime in China stays strong, the A380 can look to them as great potential customers. If China continues moving towards a market economy, the A380 faces a more limited future. The thinking that breeds the A380 - ignoring the market for the desires of aerospace and social engineers - is the same thinking of communists everywhere. Is there any doubt but that if the world were communist we'd be flying around on huge mega aircraft at unpleasant schedules? Embracing the market means moving away from the large centralized overcrowded hubs of the A380 world.

kind regards,

RogueTrader



 
manni
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RE: China Plans A380 Order

Mon Sep 09, 2002 12:05 am

"...take a look at the top 6 airlines in the world..."
And who exactely are the top 6 airlines? American, Delta, United, are these
some of the airlines you call 'top 6 airlines'? Well you're right if you talking about number of passengers carried or the size of their fleets. it takes more than that to be called a top airline. What about profitability? No money, no new planes. Lufthansa, Qantas, Singapore Airlines, Air France all posted profits even after the difficult times they had in the months after 9/11 and all have the A380 on order.

"...10 smaller planes at convenient schedules..."

If you're going to fly from FRA to NRT or ICN, you really dont need the choice of 10 different departure times each day. In fact, even today there is no choice. LH, OZ and KE all operate flights between FRA and ICN, and all depart within 2.5 hours. Doesn't make much of a difference if you're going to fly for 12 hours.

China is surrounded by other overcrowded Asian airports, with hardly any space for more airports. Even short distance flights to ICN, NRT, KIX and HKG are today already operated by 747/777/330/340 aircraft. It can only get busier, but no romier. A day has 24 hours and nothing can change that.
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RayChuang
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RE: China Plans A380 Order

Mon Sep 09, 2002 12:53 am

I am not surprised that Air China is looking at the A380-800.

For example, despite the politics of China, there is a huge amount of both tourist and business traffic in and out of Beijing (PEK) and Shanghai (PVG). Because of China's rapidly modernizing economy and the huge number of tourists visiting that country, it won't take long before the long range fleets of Air China, China Southern and China Eastern airlines will prove to be inadequate for their needs.

I will also not be surprised that Air China also orders the A380-800F, because China is home to a lot of electronics goods factories and they need to be able to ship a lot of goods out of the country quickly, which will demand bigger air freighters.
 
Jaws707
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RE: China Plans A380 Order

Mon Sep 09, 2002 1:30 am

Personally I think for now that China should only order the A380F. With all of the electronics produced there this will be a perfect plane for shipping all of those components all over the world. I think they should wait for a while on the A380 passenger because I do not think they are ready for such a plane. Purchasing the plane for just the Olympics is an insane idea. The Olympics only last 2 weeks and because they are in 2008 I dont know that they would even get the planes delivered in time.
 
carnoc
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RE: China Plans A380 Order

Mon Sep 09, 2002 1:31 am

Personally, I think Airbus 380 is a good choice for Chinese airlines' further expansions.

Yesterday, I was talking with a F/A from Air China (CA), he told me that the number of passengers to Europe on Air China flights is rapidly growing and there are already quite a few problems with the urgent needs of more aircrafts and some F/As. He also told me that he figured that on most Air China flights to Europe over 70% of total passenger seats had been booked during off peak seasons and you will often see no seat left on Air China flights to Europe during the peak seasons and school holidays.

There is no doubt that Airbus 380 is a waste of money to be introduced by Chinese carriers at current stage, but we need to look at things further as some guys said earlier.

Seriously, as the living standard of Chinese people continues improving, we have no question that more and more people will choose to get on a flight and enjoy the flying experiences, especially all domestic trips. Here is an example. A few years ago, I was travelling from Beijing to Shanghai, there were very few flights I may select and when I got on a night flight operated by Air China, there were not many passengers. However, do you know how many flights you can get between Beijing and Shanghai? Sometimes, as many as nearly 40 flights (can't remember how many flights normally, but usually around 30 flights), although the average percentage of booked seats is not so good (I think somewhere around 60% at off peak times), but we can see the need of air transportations is highly increasing in China.

By the way, we don't need to look at all those 'big carriers', because they are all different, so we have to look deeper in every case and give a careful conclusion to each one. In fact, I also agree with Manni's opinion, it is right that more schedules will bring conveniences, but a lot of Asian airports have no more space to develop and there is also a limitation of air traffic controlling development and they still have to try to increase their transportations, so bigger aircrafts are useful under these certain cases.
 
Mark_D.
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RE: China Plans A380 Order

Mon Sep 09, 2002 2:40 am

RogueTrader For the same reason the A380 (or the 747400) has a small place in the current largest aviation market today - people prefer high frequency point to point service with an ever increasing network of cities. Not more limited service all piped through the crowded mega hubs.

LoL RogueTrader, I was wondering how long it would take you, to migrate on over here  Smile

But looka, there's really no point in mystifying all this, spinning like a dervish, and so on. A380 ain't going to be a 2000-passenger cruise liner or anything, in terms of capacity it's only : a 744, and 73G, rolled into one. Or a 744 with the upper-deck extended all the way back, if you prefer. There! Mystification gone  Smile


Sure the launch phase of a craft like this is political --but then that`s commercial aviation for ya, when is it not, when airliners are just getting introduced to the marketplace. But after the first 100 of these things are delivered, if it`s a good plane with good economics, reliability and customer and client satisfaction then you're going to see a whole bunch of them flying, down the road (and yes you`re going to see them at ATL, you'll see them at ORD, and LAX, and JFK/EWR, SFO, MIA, likely even DEN and SEA as well!) And of course, if they work well you're going to see them elsewhere, too, South Africa and Brazil and Japan and of course China too. So there y'go, strap in and wait and see what the next several years bring.
 
Rai
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RE: China Plans A380 Order

Mon Sep 09, 2002 3:28 am

And who exactely are the top 6 airlines? American, Delta, United, are these
some of the airlines you call 'top 6 airlines'? Well you're right if you talking about number of passengers carried or the size of their fleets. it takes more than that to be called a top airline.


First of all, there is no need for petty, immature remarks like that. That seems to be all you know how to do on this forum.  Insane

As far as Asian airport expansion, most of the new airports that have been built were built with future expansion in mind. ICN, KIX, CLK, KIA, PVG, etc. While many Asian airports are quite crowded, they are not too busy in terms of aircraft movements (not necessarily a bad thing). To my knowledge, there is not one airport in Asia that handles more that 250,000 aircraft movements per year; they can easily accommodate more traffic. CLK, ICN, PVG have been designed with this sort of expansion in mind.

Furthermore, there is already evidence of fragmentation within Asia. This is even the case with intercontinental routes. LH already flies to Asia (Bangkok and I'm sure a few other routes) from MUC. Many Asian airlines fly to MAN. Even within China, other cities have already started intercontinental routes (Guangzhou being one of them). Carnoc brought up the example of many more flights being offered within China for the sake of convenience. This demand will grow even further as China develops more. I believe the airports currently have the capacity to accommodate these increases. Also, more cities in China will demand more services as their economies grow and investment goes there. Chongquing, Chengdu, Wuhan, Shenzhen, Tianjin, to name a few, are all large cities with huge economic potential. They are going to want to get into action as well, including getting more commercial airline flights. And while an A380 maybe justified on routes from Shanghai and Beijing to JFK, LAX, LHR, SFO and FRA, routes from Chongquing, Wuhan, Shenzhen and Guangzhou do not justify such a large plane. And I don’t think business leaders from those cities or anyone going to them would want to funnel through Shanghai, Hong Kong or Beijing to make those connections. To further elaborate, LH recently said that they would like to fly to at least ten cities in China within the next ten years. If that isn’t fragmentation, then I don’t know what is. I seriously doubt that all those cities will get a plane of even the 747’s size.
 
roguetrader
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RE: China Plans A380 Order

Mon Sep 09, 2002 3:42 am

Manni,

I never cease to be amazed at how much wishful thinking influences the views of some who have an agenda and seek to promote it.

Manni says:

And who exactly are the top 6 airlines?

I use the world standard in ranking airlines: RPKs. If you can get any major authority to change to whatever ranking promotes your agenda, feel free, and perhaps I'll take your ranking more seriously.


Lufthansa, Qantas, Singapore Airlines, Air France all posted profits even after the difficult times they had in the months after 9/11 and all have the A380 on order.

The facts, however, indicate:

Air France was the only major European airline to earn money last year, with net income of 153 millions euros ($152 million).... While Lufthansa had a record loss of 591 million euros.
---Bloomberg News September 4, 2002, Wednesday

Anyone else care to offer facts instead of stuff they overheard or imaginary visions of the truth?

American/European Aviation situation/history:

-large domestic travel on narrow bodies
-transatlantic traffic dominated by twins, fragmented
-an ever increasing number of international gateways
-Asian travel on the 747 for RANGE, not capacity

Supposed version of Asian/Chinese travel envisioned by thread contributors above
-Asia will skip the narrowbody stage and somehow jump straight into needing a mega jumbo on domestic routes - this is in fact contrary to Airbus views
-Asia will maintain Heathrow style reliance on one international gateway per country, instead of opening up an ever increasing number of Asian cities to the rest of the world
-Reliance on the A380 for capacity, not range

The primary place for the passenger A380 is Asia to Europe, and that's only if no new routes are created. One common bit of evidence given as to why the A380 is needed is by showing the few routes where the 747 flies longhaul more than once a day. As if this longhaul route is the only route between the countries and regions that can ever occur. People want and will fly from an ever increasing number of cities on longhaul routes, they will not simply continue to get on bigger and bigger airplanes flying only the routes that exist today.

kind regards,

RogueTrader

 
manni
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RE: China Plans A380 Order

Mon Sep 09, 2002 4:39 am

Rogue Trader, Rai

If you read my post without looking for a possibility to start bitching  Nuts(again), you might want to admit that I actually asked what for you a top airline means. If you mean RPK, you could have mentioned that in you previous post and I did not had to ask this question.

Sure the Asian airports have been build for expansion, but you need more than a big airport. Restrictions on landing or take off from the origin airport could influence the use of some airports a lot, NRT and it's night curfew for example.

Cathay Pacific, Qantas and Malaysian (correct me if they opened up again), have ceased operations to MAN and are now only flying to LHR. So much about the Asian carriers flying to secondary airports.
LH is the home carrier for 80 million people, no surprise they have a second hub.

One more thing Rogue Trader,
It more looks that you're the one who is wishful thinking, wishful thinking that the A380 wont be a commercial succes. If so, I will not loose one night sleep over it, but if it will, you might have some big nightmares coming up. Big grin

Goodnight,  Big grin
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PHXinterrupted
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RE: China Plans A380 Order

Mon Sep 09, 2002 4:51 am

Manni, thanks for going to sleep! Your anti-American posts have become quite boring.
Keepin' it real.
 
manni
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RE: China Plans A380 Order

Mon Sep 09, 2002 5:03 am

Are you feeling sorry for yourself again?
Where in the previous posts did I come over as Anti-American?  Innocent
Get a life buddy. I've got more on my mind than continously writing about your nation.  Nuts

Goodnight,
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Rai
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RE: China Plans A380 Order

Mon Sep 09, 2002 5:11 am

Manni: It was assumed by pretty much everyone else on here that by "top airlines", RPK was assumed. You, of course, want to start an argument and insult others because that's all you seem to know how to do.

Now,

Sure the Asian airports have been build for expansion, but you need more than a big airport. Restrictions on landing or take off from the origin airport could influence the use of some airports a lot, NRT and it's night curfew for example.

First of all, Narita has a curfew because of greedy farmers. The airport is too far away from any major population base to cause noise concern. Incheon, Chek Lap Kok and Kansai are all operational 24 hours a day. No airport in China, to my knowledge, has a nighttime flying ban either. Even with a night time flying ban, these airports don’t have too many operations. If you bothered to read my entire post, you would have noticed that. I will repeat it again in bold and in caps so you get the message: NO AIRPORT IN ASIA HANDLES MORE THAN 250 000 AIRCRAFT MOVEMENTS PER YEAR! Not a single one. All of these airports are capable of handling more aircraft than the currently do. And to tell you the truth, aside from Narita, which is constrained for political reasons, none of the other airports are all that congested and are UNDER capacity. Bangkok is building another airport, but this is to replace the antiquated facilities of the present one. The new airport will be more than capable of handling more passengers and more aircraft.

Actually, MH has started flying to Manchester again. PIA also flies there too. There are other Asian carriers that fly there as well. Check this out. If service was cut, it was because of a slowdown in the industry as a result of the terrorist attacks and the global recession. Has nothing to do with Manchester being an undesirable airport…especially with over six million people living within a hundred mile radius.
 
manni
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RE: China Plans A380 Order

Mon Sep 09, 2002 5:34 am

Rai,

Dont assume to much. Pretty everyone else? You mean you and Rogue Trader? Dont be so egocentric.

Chep Lap Kok and Kansai operate 24 hours a day. Good, but wasn't it mentioned earlier on that people would want to fly on convinient times? How convinient is it to arrive at 2 o clock in the morning in Kansai from Europe? You would not only arrive at 2 in the morning but also have to leave at 7 in the morning from the origin. Now on most intercontinental flights there is a significant number of transit passengers, an aircraft leaving at 7 in the morning wont be able to carry these, unless the transit passengers came in the night before, Very convinient indeed.
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Joni
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RE: China Plans A380 Order

Mon Sep 09, 2002 6:02 am


10 destinations in China is about 120 million people per destination. The population of Germany is about 80-90 million, for comparison.

 
ryu2
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RE: China Plans A380 Order

Mon Sep 09, 2002 6:12 am

Not only for the Olympics, if and when China and Taiwan re-open direct air routes again, you BET there will be need for A380 on those routes, for both pax and cargo!

Especially routes like Taipei-Shanghai, or Taipei-Guangzhou, with all the Taiwanese investment there in high tech manufacturing. Right now, 2/3 of traffic Taiwan-HKG connects to China.
 
SInGAPORE_AIR
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RE: China Plans A380 Order

Mon Sep 09, 2002 3:48 pm

"So much about the Asian carriers flying to secondary airports."

Singapore Airlines flies to Manchester.
Anyone can fly, only the best Soar.
 
manni
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RE: China Plans A380 Order

Mon Sep 09, 2002 9:30 pm

I'm aware of that Singapore_Air, in fact they fly to MAN in combination with BRU.
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Guest

RE: China Plans A380 Order

Mon Sep 09, 2002 10:39 pm

If China wants to impress the world by flying everybody else's planes I think they should build there own. That would be much more impressive to me. They have the capability.
 
Rai
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RE: China Plans A380 Order

Mon Sep 09, 2002 11:00 pm

If China wants to impress the world by flying everybody else's planes I think they should build there own. That would be much more impressive to me. They have the capability.

Very true. I'd like to see if they'd get the same flak building their own plane instead instead of ordering one or the other.  Insane
 
N79969
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RE: China Plans A380 Order

Mon Sep 09, 2002 11:17 pm

Nice job again Rogue Trader.

China has built its own planes and they aren't that good. They assembled MD-80s in Shanghai (some of which were flown by TWA) and they had some issues with quality.

I think China's geography and population distribution (very) roughly mirrors the US. There are larger concentrations in the East and coastal areas than in the West. They have space and the government has the power to kick people off their land to build runways or anything else deemed necessary. I don't think the slot constraints that make the A380 attractive are present in China. Once China's bureaucracy finally quits fighting market forces wholesale, I think point-to-point flying will flourish. With respect to Chinese international service, I think the fact that China Southern and China Eastern fly 777 and 340 respectively are harbingers. Either carrier could have purchased 747-400s but did not. Both carriers are hubbed in very densely populated cities but opted for lower-capacity, long-range aircraft.

Airplanes are high-profile, high-tech machines that are symbolic to countries. This is the nature of the business. I am not surprised that China will purchase the 380 for its carriers.
 
manni
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RE: China Plans A380 Order

Tue Sep 10, 2002 3:16 am

Anyone else care to offer facts...?

(from aviation week and space technology/august 26, 2002)

The australian carrier (Qantas) reported a net profit of A$428 million for the fiscal year ending June 30.


And now Lufthansa... http://www.pressi.com/de/release/47440.html


kind regards,

manni

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N79969
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RE: China Plans A380 Order

Tue Sep 10, 2002 5:13 am

10 destinations in China is about 120 million people per destination. The population of Germany is about 80-90 million, for comparison.

I think population is certainly important. But it is only one factor. Germany is in the heart of Europe. Lufthansa carries a lot of people from behind its MUC and FRA to points beyond the hubs and vice-versa. In other words, many of its customers are not German. Mainland China probably will not be a major transit point for people in the Americas or Europe traveling elsewhere. Mainland China is sort of a hinterland. Besides the competition is already intense in east Asia.

Lufthansa's home market is very wealthy compared to China. Travel is a discretionary good and the population must have some disposable income for travel to take off. Further, Germans travel quite a bit even when compared to their industrialized peers.

Bottom line: the existence of large population centers may not neccessarily translate into big A380 sales.
 
Spaceman
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RE: China Plans A380 Order

Tue Sep 10, 2002 11:11 am

If you can say Germany is the heart of Europe you can also say safely say that China is the heart of East Asia. However you can not compare Germany as a major transit point for travelers traveling through Europe to China who has just started to build their airport system.

China is now developing its airport system so in the future it will grow to be major hub in east Asia. People from America can in the future transit through China to Southeast Asia, instead of going through Korea, Japan or Taiwan.

Off course Germany is relatively rich compare with China as it is a developed nation, but once China becomes a developed nation thing might start to look differently.
 
ScottB
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RE: China Plans A380 Order

Tue Sep 10, 2002 12:15 pm

Well, if profits are the measure of a "top" airline, then the top airline in the world flies no international routes. In the period quoted for Qantas (July '01-June '02), Southwest posted a net profit of US$338.2 million (roughly equivalent to A$675 million). In the first quarter of 2002, Southwest posted a net profit of US$21.4 million -- nearly double Lufthansa's profit of 12 million euros. And even Ryanair posted a larger profit than Lufthansa.
 
varig md-11
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RE: China Plans A380 Order

Tue Sep 10, 2002 3:56 pm

hi there

let me allow a couple of comments about the following

" American/European Aviation situation/history:

-large domestic travel on narrow bodies
-transatlantic traffic dominated by twins, fragmented
-an ever increasing number of international gateways
-Asian travel on the 747 for RANGE, not capacity "

if most flights originating from the US to EC are with 767 or 777 and coming from multiple gateways, it's not that much the case in the other way : biggest EC airports LHR-FRA-CDG-AMS send 747 daily to many points in the US.

there can be fragmentation from the US but it's limited in the EC
In the EC the population meant to fly transoceanic (I mean pop. having enough € and/or business need) is concentratred in the LHR-FRA-CDG-AMS area already !

direct flights from BERLIN to the US failed ; direct flights from LYON (2nd town in France by its economy) to JFK failed also ; AZ is having tremendous problems with its fragmented MXP-FCO transoceanic flights

to my mind the example of LH at MUC to BKK isn't relevant: BKK has so much success at the moment in the EC that we have some days 2 TG 744 and 1 AF A340 flights A DAY from CDG to BKK

plus if it's true MH or KE are flying a 772 to AMS both are flying crowded 744 to CDG for example

so the A380 might not be good for US airlines but quite interesting for EC airlines as well as for some asians
AF TW AA NW DL UA CO BA U2 TP UX LH SK AZ MP KL SN VY HV LS SS TK SQ PC RG IW SE LI TN
 
manni
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RE: China Plans A380 Order

Tue Sep 10, 2002 4:24 pm

Scottb,

Thank you for that  Big grin. My point whoever was the show that Rogue Trader was either misinformed about Lufthansa or either had put the wrong numbers their on purpose. For who knows whatever reason.
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roguetrader
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RE: China Plans A380 Order

Tue Sep 10, 2002 10:03 pm

Manni,

I am rarely misinformed about my own job and never post the 'wrong numbers' on purpose merely to intimidate an airline "admirer" like yourself. When I post factual information, it is accurate and comes from reliable world respected sources. I never quote flight attendants I talked to or the number of 747s I see flying overhead to determine figures that are readily available and incontrovertible.

Do you know what 'operating profit' means? Which is what the link you posted discusses? Its purely an accounting term and at least 3 US majors likewise posted an 'operating profit' at some point in the last year. However, you can have the biggest 'operating profit' in the world, but if you are still losing money, you are an unprofitable airline.

Lufthansa saw a first-half net loss of Euro 27 million (Pounds 17 million) against a Euro 43 million deficit in the first six months of last year.
---The Times (London), August 22, 2002

Air France was the only major European airline to earn money last year, with net income of 153 millions euros ($152 million). British Airways had a record loss of 142 million pounds ($222 million), while Lufthansa had a record loss of 591 million euros.
---Bloomberg News September 4, 2002, Wednesday

Severe cost-cutting and capacity reduction allowed Lufthansa to post a net loss of 27 million euros ($ 26 million) for the first half, against a 43 million-euro loss a year before, and to more than triple its operating earnings to 332 million euros.
---Aviation Week and Space Technology, August 26, 2002

Lufthansa has seen first-half losses drop by more than one-third year on year. The German flag-carrier lost pounds 17.3 million between January and June, compared with a pounds 27.6 million loss in the same six months last year.
---Travel Trade Gazette UK & Ireland August 26, 2002

The bottom line of the group remains negative in the first half, with a net loss of EUR27 million, which is nevertheless an improvement on the net deficit of EUR43 million at the half-way stage last year
---Aviation Daily, August 22, 2002

Varig MD-11: thanks so much for your thoughtful opinion from 'watching planes on the runway' your view that the 747 is important in transatlantic service - by far the largest international air market in the world. Unfortunately, everyone in the business understands that the Atlantic is ruled by the twins and that fragmentation is the reason why.

At least 70% of all trans-Atlantic flights are on twin-engine jets such as the 767 and the Airbus Industrie A330, and this trend is expected to continue... It did continue...
---Aviation Daily, February 21, 1992

The perfect illustration of how consumer preferences drive fragmentation and aircraft choice:

In 1987, airline service between Chicago and Europe consisted
of one daily 747 flight to London on TWA. Now,...Airlines offer 21 daily flights to 11 European cities on 767s and the newer 777 twin-engine jet...

---USA TODAY, November 1, 1999

And finally:

The idea that four engines are better than two for hauling cargo internationally doesn't hold true anymore according to aircraft operators. [The twins] ... have given carriers more flexibility to put the aircraft on longer, thinner routes. Cargo divisions have gotten the kind of side benefit [from the A330]that buyers of Boeing's 777 found in the 1990s when they coupled that plane's twin-engine efficiency with a belly as big as that of a 747.
---Air Cargo World July 1, 2001

I enjoy a discussion about the differences in the European/Asian/American market and how the A380 might fit in here, but challenging my use of facts or their sources is almost pointless.

kind regards,

RogueTrader


 
N79969
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RE: China Plans A380 Order

Tue Sep 10, 2002 10:21 pm

I don't think China will replace Japan as a hub. Japan's location is like Britain's location. Travelers from either the east or west of Japan can transit their and avoid "backhaul." For instance for travelers going from the US to Japan, China would be a bad place to transit. You would have to double back from China. For travelers from the US to China, Japan works out well as a transit point. Even Seoul is disadvantaged in this regard. What lies behind ICN? China and SE Asia. Besides being in 2nd richest country, NRT and KIX have Korea, China, and SE Asia behind the gateway. China is not about to become a developed country anytime soon. The spectacular growth that makes news is concentrated near coastal cities (Hong Kong, Shanghai, Shenzen, Guangzhou, etc Big grin and has been slow to reach the vast inland. It will be long time before China reaches developed status.

That is my point with Lufthansa-- they are based in a large market and have large markets that lie to the east and west. This is also true for BA and AF. For travelers from the US to eastern/central Europe, Germany is as good a transit point as any. The only place where it is considerably disadvantaged is the significant US-UK market.
 
Rai
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RE: China Plans A380 Order

Tue Sep 10, 2002 10:37 pm

don't think China will replace Japan as a hub. Japan's location is like Britain's location. Travelers from either the east or west of Japan can transit their and avoid "backhaul." For instance for travelers going from the US to Japan, China would be a bad place to transit. You would have to double back from China. For travelers from the US to China, Japan works out well as a transit point. Even Seoul is disadvantaged in this regard. What lies behind ICN? China and SE Asia. Besides being in 2nd richest country, NRT and KIX have Korea, China, and SE Asia behind the gateway. China is not about to become a developed country anytime soon. The spectacular growth that makes news is concentrated near coastal cities (Hong Kong, Shanghai, Shenzen, Guangzhou, etc and has been slow to reach the vast inland. It will be long time before China reaches developed status.

Wrong, wrong, wrong! I agree that China (for now) is not as good as a hub point as Japan, but Seoul makes an ideal hubbing point. Seoul is maybe only an hour longer flight across the Pacific than Tokyo. And don't forget that Seoul is closer to Europe than Japan. Furthermore, ICN is a brand new airport which is currently under capacity and has more than enough room to expand. NRT will never expand because of crony politics and greedy farmers. KIX will is physically constrained and will have a difficult time expanding at a decent cost. ICN is in an excellent location for flights all across Asia. Prior to the Asian flu, Seoul was already becoming a major transit point…and this is just with Kimpo! Many Japanese use Korean Air and Asiana when flying to the U.S. because it’s much cheaper than flying straight from Tokyo. Tokyo is a notoriously expensive place to fly in and out of. Korea’s only problem is marketing and exposure – few know it exists. I guess the fact that it lies between China and Japan doesn’t help that much! It is a country with vast potential. Thankfully, the government is getting the word out that Korea is around, it’s alive and more than ready to accept your business. It seems to be working.
 
Joni
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RE: China Plans A380 Order

Tue Sep 10, 2002 10:37 pm


RogueTrader,

"Twins" is a large category ranging from A318 to B773. A318 is a small plane, whereas the B773 is large. Virgin Atlantic and Air France, to name two examples, have already indicated they intend to operate the A380 over the Atlantic. I suspect that they have done market research in the matter and concluded that there are ways to use the A380 profitably in that market.

Customer preference is often for fragmented markets, but it is also for cheap tickets - this is increasingly true also for business travellers. The availability of efficient "twins" has been a factor driving fragmentation, and the eventual availability of new and efficient quads will also affect the market - toward consolidation.

There is room in the world for both kinds of music.

 
N79969
Posts: 6605
Joined: Tue Jan 29, 2002 1:43 am

RE: China Plans A380 Order

Tue Sep 10, 2002 11:00 pm

One "wrong" would have sufficed. Actually, I think I am correct. Yes, NRT and KIX are expensive and constrained. However if ICN were such a better transit point than Japan, I think UA and NW would have considered moving their hubs out of cramped NRT to ICN. They would certainly save a lot of money on landing fees, would not face time restrictions (NRT only), and could add flights. Neither has made that move. NWA has added flights and moved A320s to Narita. After all the US and Korea have open-skies which would allow US carriers to carry fifth-freedom traffic. The US-Japan agreement is more restrictive. Seoul is simply not as well positioned as NRT or KIX. It is about 90-120 minutes from ICN to most points in Japan plus transit time. Japan is probably still the most important O&D market in Asia.

The Japanese who travel through Korea are largely low-yield tourists and students. You are correct in pointing out that Japan's air travel system is pretty inefficient if Japanese are traveling to Korea to get better fares.
 
carnoc
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RE: China Plans A380 Order

Tue Sep 10, 2002 11:06 pm

So far, China tries so hard to develop three hubs into well-developed transit points, the three airports are Beijing Capital Int'l, Shanghai Pudong Int'l and the new Guangzhou Baiyun Int'l which has not been finished its construction, but already have good plans to push it as a good international transit airport.

Today, one of most well-known Chinese newspapers which is called Beijing Youth Daily reported that experts from Boeing advised Beijing Capital Int'l Airport and the Civil Aviation Administration of China (CAAC) that Beijing Capital Int'l Airport has the ability to increase as more as up to another 30% flights than the number of flights does the airport serve now. At current stage, Beijing Capital International Airport serves an average 700 flights each day.

According to the report published by Beijing Youth Daily, it seems that the third runway of Beijing Capital International Airport will start construction from 2004. In addition, another news article was on the magazine called Aircraft & Aerospace (September issue) said that China is going to spend US$3.6 billion to expend Beijing Capital Int'l Airport and Shanghai Pudong Int'l Airport and Beijing may get the third terminal in the near future. Also, by the year of 2008, Beijing Capital Int'l Airport may take the capacity to 70 million passengers a year.
 
roguetrader
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RE: China Plans A380 Order

Tue Sep 10, 2002 11:19 pm

Joni,

I appreciate your calm words and review of the facts. As to whether the A380 can work across the Atlantic - it probably can for a very few routes right now, but as fragmentation continues, even less traffic will be between CDG and JFK (for example) on a percentage basis, more and more traffic will be between secondary cities.

I believe that virtually all the cities in Asia will follow the example of Chicago I have above - which went from 1 daily 747 service to London/Europe in 1987 to 21 daily flights to 11 European cities in 1999. Furthermore, while Chicago was expanding the number of Euro cities it served, other cities were getting their first ever European service. I feel the exact same pattern will happen in Asia.

Your view is that a new trend will emerge, that instead of an ever expanding network of new routes and new airports, passengers will want to simply fly the same routes they fly today in ever increasing numbers, with little to no need to add new internatinional destinations or nonstop city pairs.

So, I think we will just have to disagree. I see most growth in the expansion of the network, new routes connecting new cities, you see most growth coming in consolidation into a few hub cities. I guess we have stated most everything we can and will have to wait and see.

kind regards,

RogueTrader
 
Red Panda
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RE: Manni

Wed Sep 11, 2002 3:22 am

China PRC has only 1.25 billion people, not 1.5 billion.
Moreover, even there is a huge population there in China, the flying pop'n is just a very, very tiny part of the whole pop'n. For airlines, the flying pop'n means more than the whole pop'n.

Flying pop'n means those who can afford and are willing to fly.

r panda

P.S. however, non-flying pop'n may have potential to become the flying pop'n in the future. So the aviation market in China still has potential.

 
manni
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RE: China Plans A380 Order

Wed Sep 11, 2002 4:53 am

Red Panda,

You're right, well almost. According to the 'China Population Information and Research Center', the correct number stands at nearly 1.3 billion. But let's not forget the huge Chinese communities elsewhere in the world, who most likely visit their home country every once in a while.

RogueTrader,

An airline "admirer"? Altough using the term 'admirer' is a bit exagerated, aren't we all share a passion for aviation? Afterall, thats where this site was created for. Intimidate? Good grief, you take all this way to serious. Sheer up, and remember, always look at the bright side of live...
SUPPORT THE LEBANESE CIVILIANS
 
Rai
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RE: China Plans A380 Order

Wed Sep 11, 2002 5:05 am

But let's not forget the huge Chinese communities elsewhere in the world, who most likely visit their home country every once in a while.

There are 80 million Chinese living overseas. I can't speak for countries outside the U.S. and Canada, but here in North America, the VAST majority of the Chinese population hails from Taiwan or Hong Kong. If they visit their home countries, it's usually those two. There is a growing number that are coming from Mainland China (especially here in New York), but many of them come over for political (or economic) reasons and vow not to return until things change. Most travel to China is usually business or tourist related, not VFR traffic. This is why routes to China are usually the amongst the most profitable.
 
Joni
Posts: 2613
Joined: Thu Aug 10, 2000 11:05 pm

RE: China Plans A380 Order

Wed Sep 11, 2002 5:32 am


RogueTrader,

Even if the traffic between CDG and JFK would decrease percentagewise of total transatlantic traffic, the traffic in passenger numbers may well still increase. And with regard to planning what to operate over the route, the volume of traffic on that particular route is essentially more important than traffic on other routes.