WPvsMW
Topic Author
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SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sat Apr 21, 2018 5:14 am

There are four Tier 1 cities , and three Tier 1 airports, in China.

CA in PEK, CZ in CAN, MU in PVG. HU would like to make the CN3 into the CN4, but lacks a Tier 1 hub.

My premise: SZX, not CTU or WUH, will be the next Tier 1 airport. SZX is seaboard, but CTU and WUH are inland. UPS chose SZX, not HKG, for its second China hub (after PVG). Fedex' China hub is CAN. Looking at the cargo and pax numbers below, and the high-tech design and manufacturing, modern rail and metro systems, and runway expansion availability in Shenzhen (Guangzhou pales in comparison), I think HU should make SZX its hub. HAK (Haikou, HU's "home") is never going to be a Tier 1 airport.

Now, for a spooky note... you've heard a "ghost cities" in China. We may see "ghost airports".
http://www.scmp.com/business/china-busi ... ights-city

For the last 3 years with full (public) data:

The cargo trend ... PEK stagnant, HKG slowing, SZC and CAN gaining.
https://en.wikipedia.org/wiki/List_of_b ... go_traffic

2016 figures, millions of metric tons
HKG 4.5
PVG 3.4
PEK 1.8
CAN 1.7
SZX 1.1

2015 figures, millions of metric tons
HKG 4.4
PVG 3.3
PEK 1.9
CAN 1.5
SZX 1.0

2014 figures, millions of metric tons
HKG 4.4
PVG 3.1
PEK 1.8
CAN 1.45
SZX 0.96


The pax trend ...
https://en.wikipedia.org/wiki/List_of_b ... er_traffic

2017 figures, in millions
HKG 72.7
PVG 70.0
PEK 95.8
CAN 65.9
SZX 45.6

2016 figures, in millions
HKG 70.3
PVG 66.0
PEK 94.4
CAN 59.7
SZX 42.0

2015 figures, in millions
HKG 68.2
PVG 60.0
PEK 89.9
CAN 55.2
SZX 39.7
 
eamondzhang
Posts: 925
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sat Apr 21, 2018 10:17 am

I'm not quite sure where you'd get the point and combine with HU's future. Keep in mind HU's largest hub right now is PEK and will be PEK for the foreseeable future (they're not moving to the new airport). With CZ and a lot of fellow heading south, there will be quite a few slots up for grab. Indeed I've heard rumours that HU plans to make the entirety of T2 to themselves.

And Tier 1 airport only applies to flights to/from USA. No other countries I believe are having such limitations. In CAAC's definition, the current four main "hub" airports that they're focusing are PEK, SHA/PVG, CAN and CTU, with KMG being a distant unofficial fifth. SZX is nowhere near this for now.

Michael
 
WPvsMW
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sat Apr 21, 2018 7:56 pm

Yet, Shenzhen is a Tier 1 city, and Chengdu and Kunming are not. Slots may open at Beijing-Capital, but CA and Star Alliance will remain there... substantial competition. http://english.cri.cn/12394/2016/07/30/3521s936025.htm ("The statement did not mention whether Hainan Airlines, the country's fourth-largest airline, will remain at the capital airport or move.")

Neither CTU nor KMG are in the top 30 for cargo or pax, and neither are growing like SZX. To stay in the game, HU must continue to serve Beijing at either Capital or Daxing, but that is like serving LAX while having ATL, DFW, or ORD as a "home hub". HU's strategy should be to use its considerable influence to make SZX its "home hub".
 
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UPlog
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sat Apr 21, 2018 8:58 pm

I dont quite get the view that HU must somehow hub at SZX.

Not only does SZX have a decent sized home carrier already (owned by Air China), but as other mentioned HU has a hub at PEK plus one at Xian in addition to half a dozen focus cities across China.

Also as one that regularly visit the region, the overlap of 4 airports within short distance hardly makes SZX as the sole gateway. Already many access SZX via other airports which will become even easier now with HSR rail and 20 min travel time.
 
eamondzhang
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:50 am

WPvsMW wrote:
Yet, Shenzhen is a Tier 1 city, and Chengdu and Kunming are not. Slots may open at Beijing-Capital, but CA and Star Alliance will remain there... substantial competition. http://english.cri.cn/12394/2016/07/30/3521s936025.htm ("The statement did not mention whether Hainan Airlines, the country's fourth-largest airline, will remain at the capital airport or move.")

Neither CTU nor KMG are in the top 30 for cargo or pax, and neither are growing like SZX. To stay in the game, HU must continue to serve Beijing at either Capital or Daxing, but that is like serving LAX while having ATL, DFW, or ORD as a "home hub". HU's strategy should be to use its considerable influence to make SZX its "home hub".

Firstly SZX is home hub for CZ AND ZH, taking up the vast majority of domestic routes and international ones. Secondly SZX's cargo movement are largely contributed by UPS and other all-cargo carriers. For internationals the more justifiable ones are already being taken care of, all it's left for HU is bits and pieces like BRU.

Michael
 
WPvsMW
Topic Author
Posts: 1490
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 4:46 am

eamondzhang wrote:
Firstly SZX is home hub for CZ AND ZH, taking up the vast majority of domestic routes and international ones.


Disagree that "SZX is home hub for CZ". CZ's home hub is CAN. SZX is one of many domestic focus cities for CZ.
http://www.csair.com/en/about/gongsijianjie/index.shtml
https://en.wikipedia.org/wiki/China_Southern_Airlines

Agree that ZH's home hub is SZX (and also for DZ, which has five 787s on order), but ZH only has three wide-bodies (A333s, and three more on order). HU is much bigger.
https://en.wikipedia.org/wiki/Shenzhen_ ... al_Airport
https://en.wikipedia.org/wiki/Shenzhen_Airlines

I think the key to HU international growth is making SZX its home hub. HU has 43 WBs, and 9 on order. HU has a better international face: it is one of ten airlines worldwide rated as five-star by Skytrax, a list on which CA, CZ, and MU are absent.
https://skytraxratings.com/worlds-5-star-airlines
Last edited by WPvsMW on Sun Apr 22, 2018 5:09 am, edited 1 time in total.
 
eamondzhang
Posts: 925
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 5:04 am

WPvsMW wrote:
eamondzhang wrote:
Firstly SZX is home hub for CZ AND ZH, taking up the vast majority of domestic routes and international ones.


Disagree that "SZX is home hub for CZ". CZ's home hub is CAN. SZX is one of many domestic focus cities for CZ.
http://www.csair.com/en/about/gongsijianjie/index.shtml
https://en.wikipedia.org/wiki/China_Southern_Airlines

Agree that ZH's home hub is SZX (and also for DZ, which has five 787s on order), but ZH only has three wide-bodies (A333s, and three more on order). HU is much bigger.
https://en.wikipedia.org/wiki/Shenzhen_ ... al_Airport
https://en.wikipedia.org/wiki/Shenzhen_Airlines

I think the keys to HU's growth are: 1) making SZX its home hub, and 2) subway service to the terminal at SZX. HU has 43 WBs, and 9 on order. HU has a better international face: it is one of ten airlines worldwide rated as five-star by Skytrax, a list on which CA, CZ, and MU are absent.
https://skytraxratings.com/worlds-5-star-airlines

CZ has a SZX subsidiary operating 8 A333s in addition to 21 A320 and 22 A321. I would never say basing 50 of your planes at an airport and you can call it "focus city", when CZ themselves defines SZX as a hub and promotes them heavily for transfer pax (especially in Australia). Although ZH only has 3 A333s, the long-hauls are being done by parent company CA with 789. You can't just deny these facts and claim HU is bigger when the two operates just about more flights with more planes from SZX.

Also, it's not like HU has a main focus on SZX for long-haul. They already operate a LOT of them from outside SZX. As a matter of fact, they are building up XIY and CSX rather than SZX as you've suggested. Unfortunately for you, HU has disagreed with your "facts" that makes SZX an "appealing" base and instead building up the base elsewhere (partially because of higher subsidies from elsewhere as well). It's not like their 787 fleet is sitting around doing nothing, get your facts right.

Michael
 
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chunhimlai
Posts: 279
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 5:17 am

Shenzhen government provides great subsides on the international route
but it seems not working well
 
WPvsMW
Topic Author
Posts: 1490
Joined: Thu Mar 23, 2017 7:30 pm

Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 5:21 am

eamondzhang wrote:
"...get your facts right."


??? Where is the error in my facts?

CZ's home hub is not SZX, it is CAN.

What sudsidiary of CZ is based in SZX?
CZ's subsidiary MF is based in Xiamen (XMN) and its subsidiary OQ is based in Chongqing (CKG).
CZ has a minority interest in 3U, whose home hub is CTU.
CZ and its subsidiaries may serve SZX, but none have a home hub at SZX. My facts are right.
Our opinions about HU's strategy are different.
 
WPvsMW
Topic Author
Posts: 1490
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 5:40 am

chunhimlai wrote:
Shenzhen government provides great subsides on the international route but it seems not working well


The subsidies had an effect: SZX has gone from having no international destinations about 3 years ago to currently having 27 international destinations. What will happen when the subsidies end is a different question.
https://centreforaviation.com/insights/ ... ong-273819
http://www.szairport.com/szairportyw/thcs/list_tt.shtml
 
patrickw421
Posts: 27
Joined: Sun Apr 23, 2017 6:49 pm

Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 6:02 am

WPvsMW wrote:
eamondzhang wrote:
"...get your facts right."


??? Where is the error in my facts?

CZ's home hub is not SZX, it is CAN.

What sudsidiary of CZ is based in SZX?
CZ's subsidiary MF is based in Xiamen (XMN) and its subsidiary OQ is based in Chongqing (CKG).
CZ has a minority interest in 3U, whose home hub is CTU.
CZ and its subsidiaries may serve SZX, but none have a home hub at SZX. My facts are right.
Our opinions about HU's strategy are different.



I think branch company is what eamondzhang means, CZ have quite a few of them actually like Xinjiang, Heilongjiang, Dalian, Henan, Hubei and some others besides the Shenzhen branch. Unlike MU I think they donn't really put the branch name on the livery and they all operate as CZ. SZX is base for the Shenzhen branch and a focus city of CZ
 
WPvsMW
Topic Author
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 6:45 am

But do CZ's branch companies have their own IATA codes? I'm trying to clarify, rather than argue. Basing CZ-owned frames that operate under a CZ's IATA code at SZX doesn't make SZX the "home hub" of CZ, "home hub" being the operative word in the thread. Today, all of the CN4 have PEK as a hub, but PEK is the home hub of CA only (among the CN4).

In fact, SZX is not even considered a "secondary hub" for CZ, just a focus city. CZ's secondary hubs are CKG, PVG, and URC (Ürümqi).
https://en.wikipedia.org/wiki/China_Southern_Airlines
 
planemanofnz
Posts: 4198
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 8:34 am

UPlog wrote:
... the overlap of 4 airports within short distance hardly makes SZX as the sole gateway.

Purely from a customs / immigration perspective, HKG and MFM can't really serve as gateways to SZX - particularly for premium traffic (think Huawei etc) - it's too administrative and logistically burdensome to be cross borders.

IMHO, it'd be effective for HU to build up its SZX hub as a response to CA at PEK, MU at PVG and CZ at CAN - it has a big population, big wealth, growth, and no competition from the top-tier long-haul carriers in Greater China.

Cheers,

C.
 
WPvsMW
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 11:29 am

planemanofnz, thank you for seeing my point. Shenzhen is a special case... 90% of electronics today are made in or go through Shenzhen. https://www.weforum.org/agenda/2017/11/ ... t-capital/

As the newest Tier 1 city, and the "hardware Silicon Valley" of the world, Shenzhen's metro infrastructure has one big gap... international air service. Tier 1 city but Tier 2 air service. The CN3 are now fully occupied elsewhere, esp. trying to sort out Daxing. If HU doesn't act, another carrier will "claim" SZX.

To expand upon the "claim SZX" idea. UPS built its "International Hub" (UPS' term) at PVG. Recently, UPS built its "Asia-Pacific Hub" (UPS' term) at SZX. UPS saw a business case for SZX that I think is very similar to the one I propose for HU.

Although Hong Kong is a free port (except for tobacco, hydrocarbon oil, alcoholic beverages and methyl alcohol, and therefore exports from Shenzen via HKG don't create Hong Kong customs duties), logistics are far better exporting from ... Shenzhen itself, rather than CAN or HKG. That's why UPS built its "Asia-Pacific hub" at SZX and flies SZX / ANC / and onward, and v.v.
 
planemanofnz
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:04 pm

WPvsMW wrote:
planemanofnz, thank you for seeing my point. Shenzhen is a special case.

I definitely see your point - I mean, by the end of this year, SZX's economy will be larger than CAN's and HKG's, so there is definitely demand to tap (passenger or cargo).

Image

It's also noteworthy that the Chinese government upgraded SZX to an “international aviation hub” under its five-year plan in 2016, matching the status of PEK, PVG and CAN.

See: https://www.reuters.com/article/us-chin ... SKBN1D147Y.

However, what I'm not so sure of is HU's ability to be the one to build up SZX long-haul traffic - its finances are poor, and it's kind of lost the first-mover advantage to CZ / CX.

What I do think is that the Chinese government should liberalise SZX's traffic rights, to allow for the likes of presently-restricted ME3 carriers to serve SZX (which they would).

Cheers,

C.
 
usssla
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:22 pm

planemanofnz wrote:
WPvsMW wrote:
planemanofnz, thank you for seeing my point. Shenzhen is a special case.

I definitely see your point - I mean, by the end of this year, SZX's economy will be larger than CAN's and HKG's, so there is definitely demand to tap (passenger or cargo).

Image

It's also noteworthy that the Chinese government upgraded SZX to an “international aviation hub” under its five-year plan in 2016, matching the status of PEK, PVG and CAN.

See: https://www.reuters.com/article/us-chin ... SKBN1D147Y.

However, what I'm not so sure of is HU's ability to be the one to build up SZX long-haul traffic - its finances are poor, and it's kind of lost the first-mover advantage to CZ / CX.

What I do think is that the Chinese government should liberalise SZX's traffic rights, to allow for the likes of presently-restricted ME3 carriers to serve SZX (which they would).

Cheers,

C.


Why Chinese government should liberalise SZX's traffic rights but not PEK, PVG, CAN, CTU?
 
planemanofnz
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:34 pm

usssla wrote:
Why Chinese government should liberalise SZX's traffic rights but not PEK, PVG, CAN, CTU?

A couple of reasons - not least of which because there is precedence (SZX was a free trade zone and a 'testing ground' for Chinese economic reforms before elsewhere, and worked) - but also because unlike at PEK, PVG and CAN, SZX is not the dedicated base of one of the major state-owned carriers, so there is less 'need' for protectionism there.

Cheers,

C.
 
usssla
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:43 pm

planemanofnz wrote:
usssla wrote:
Why Chinese government should liberalise SZX's traffic rights but not PEK, PVG, CAN, CTU?

A couple of reasons - not least of which because there is precedence (SZX was a free trade zone and a 'testing ground' for Chinese economic reforms before elsewhere, and worked) - but also because unlike at PEK, PVG and CAN, SZX is not the dedicated base of one of the major state-owned carriers, so there is less 'need' for protectionism there.

Cheers,

C.


SZX is not the only free trade zone in China. Hainan province may be somehow more "free" than Shenzhen.
Also, CN3 can have more than one hubs like US3.
 
planemanofnz
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 12:48 pm

usssla wrote:
planemanofnz wrote:
usssla wrote:
Why Chinese government should liberalise SZX's traffic rights but not PEK, PVG, CAN, CTU?

A couple of reasons - not least of which because there is precedence (SZX was a free trade zone and a 'testing ground' for Chinese economic reforms before elsewhere, and worked) - but also because unlike at PEK, PVG and CAN, SZX is not the dedicated base of one of the major state-owned carriers, so there is less 'need' for protectionism there.

Cheers,

C.


SZX is not the only free trade zone in China. Hainan province may be somehow more "free" than Shenzhen.
Also, CN3 can have more than one hubs like US3.

Those secondary hubs aren't at top-tier cities - you're talking about places like URC (among others), which are not developed enough economically to support foreign services at the level that SZX is, hence why SZX should be the testing ground for China's air rights liberalization (also because of the fact that, AFAIK, SZX is not a major hub for any of the CN3, and so doesn't need as much protectionism as those other cities likely do).

Cheers,

C.
 
rutankrd
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 1:27 pm

WPvsMW you are applying market logic in an environment where it doesn’t actually exist !

The Chinese aviation market is dominated by political expedient and remains centralist controlled . Its a pawn of the Communist parties global aspirations more rather than a simple commercial Profit and Loss based business model.

The CAAC determines where and whom operates what and is charged with maintaining the Air China Beijing, Shanghai Chine Eastern and Guangzhou China Southern triopoly.

You realise there is only one none as you put it tier 1 route from Beijing operated by any one other than Air China and that is the China Southern flight to Amsterdam and thats only because they were originally awarded a Guangzhou-Beijing stop - Amsterdam routing as originally they didn't have aircraft with sufficient performance for none stop operations.

Other regionals need support of the local parties and must not step on Air China’s toes.

And even Air China themselves are subject to some political in fighting particularly out of Shanghai, where the locals are blocking slots for several route awards in preference to China Eastern.

Hainan are left with the scraps and secondary routes in the main.

At Shenzhen the airport and airlines are really up against the wall unless the local party officials put some money and some tourists on the table to support one or other carriers expectations all compounded with Hong Kong and Goungzhou being so close.

Hainan and HNA Group carriers all pretty much rely on the tourist business from China for their existence as they don’t go after the business trade, indeed the way the CAAC operate the market they are pretty much excluded from it !

Chinese aviation is not the open and competing market it looks like !
 
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chunhimlai
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 2:21 pm

2017 stats

CAN
PAX : 65.80m ↑10.2%
CGO : 1.78mt ↑7.8%
MOV : 465k ↑6.9%

PVG
PAX : 70.00m ↑6.1%
CGO : 3.82mt ↑7.8%
MOV : 496k ↑3.5%

SZX
PAX : 45.61m ↑8.7%
CGO : 1.16mt ↑2.9%
MOV : 340k ↑6.8%

HKG
PAX : 72.86m ↑3.3%
CGO : 4.94mt ↑9.2%
MOV : 421k ↑4.2%
 
WPvsMW
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 8:31 pm

@rutankrd. I agree, China is not the "the open and competing market it looks like" .... in any sector, not just commercial aviation. But more important (in the future of SZX) than doctrinal conformity will be miànzi, the "face" of China in the "Pacific Century". I was not aware of Bloomberg's projection that Shenzhen's economy will eclipse that of Hong Kong (thanks p.nz) this year, but that reinforces the special case of SZX and the opportunity that is HU's to lose.

Shenzhen is essentially the PRC's internal "Hong Kong", a daring (in doctrinal terms) technocratic (let's build a "hardware S.V.") experiment that worked, but would not have worked without Hong Kong (the primary foreign investment source, along with Taipei). My point: although SZX is not even a "secondary hub", like CKG, KMG, XIY, and TAO among the CN3, Shenzhen has become "Hong Kong II". Whatever the provincial politics are in Guangdong, the national government will not risk miànzi and compromise the chance for SZX to surpass HKG (to continue the analogy, to become "HKG II"). The irony is that 5X, a wàiguó gōngsī (foreign company), led the way at SZX doesn't hurt HU, since it is a pax airline, but the CN3 would have a very different forecast trying to make SZX a secondary hub (a second for CA, third for CZ, and fourth for MU), much less a home hub, since the CN3 have large cargo operations.

https://en.wikipedia.org/wiki/China_Cargo_Airlines (which even as a 747-400ERF)
https://en.wikipedia.org/wiki/China_Sou ... ines#Cargo
https://en.wikipedia.org/wiki/Air_China_Cargo (why did CA order more Tu-104s?)
 
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sassiciai
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 8:44 pm

SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

I think it is quite arrogant to post a thread about "SZX" without taking the time to tell the vast majority on this forum what you are talking about

I think there is a post like at least once per week that complains about the same thing - use of ICAO 3-alpha codes to denote airports. Of course most will recognise JFK, LHR, FRA, SIN, HKG, etc .....but unheard-of airports close to unknown cities in China, that's not on! Yes, thousands of us can Google it, and find out. Cant the OP have a bit more common sense and take the extra 10 seconds to spell out the airport name!
 
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sassiciai
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 8:50 pm

sassiciai wrote:
SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

I think it is quite arrogant to post a thread title about "SZX" without taking the time to tell the vast majority on this forum what you are talking about

I think there is a post like at least once per week that complains about the same thing - use of ICAO 3-alpha codes to denote airports, especially in thread titles. Of course most will recognise JFK, LHR, FRA, SIN, HKG, etc .....but unheard-of airports close to unknown cities in China, that's not on! Yes, thousands of us can Google it, and find out. Can't the OP have a bit more common sense and take the extra 10 seconds to spell out the airport name!
 
WPvsMW
Topic Author
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Re: SZX: a Tier 2 airport in a Tier 1 city ... and HU's future

Sun Apr 22, 2018 9:01 pm

http://www.iata.org/publications/Pages/code-search.aspx is your friend.
Faster than Google on airline and airport codes.
I don't intend to be arrogant with codes and acronyms... I'm in the biz so I post like I write an email.
MIndful of an Anglophone audience, I have provided translations of Chinese terms.

Consider the collateral benefit of a Topic title that an a.nut regards as cryptic: don't care about SZX or HU, since I don't know what the codes mean, so I don't click the Topic. Time saved. :)

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