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airDFW
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Crazy Quilt Of Chinese Airline Structures

Wed Apr 10, 2013 2:52 pm

CAPA has some excellent articles on Chinese airline Industry and looking at their list of airlines and the hubs, my head aches. There are so many airlines in China and each city seems to have its namesake. Granted they all owned by govt but still doesn't having all these city airlines have additional cost on the big 3?

Is the proliferation of airlines is due to Local sensitives? Or just me too mentality of Local bosses? Any insight on why?

A partial list

Uni Airways
Xiamen airlines
Shenzhen airlines
Shanghai airlines
Shandong airlines
Sichuan airlines
Joy air
China United airlines
Dalian airlines
Chongqing airlines
Grand china airlines
 
rutankrd
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RE: Crazy Quilt Of Chinese Airline Structures

Wed Apr 10, 2013 3:41 pm

Keeps lots of good party members and regional governors and politburo guys bank balances full !

The CAAC still controls aviation infrastructure.
 
Cerecl
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RE: Crazy Quilt Of Chinese Airline Structures

Thu Apr 11, 2013 1:18 am

You will find many of these airlines are actually either wholly owned by the Big 3 or are JV of the Big 3 and the local government/industries.
Fokker-100 SAAB 340 Q400 E190 717 737 738 763ER 787-8 772 77E 773 77W 747-400 747-400ER A319 A320 A321 A332 A333 A343 A346 A359 A380
 
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BreninTW
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RE: Crazy Quilt Of Chinese Airline Structures

Thu Apr 11, 2013 1:20 am

And you'll also notice you included a Taiwan airline in there: Uni Air (which is a subsidiary of BR).
 
davidho1985
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RE: Crazy Quilt Of Chinese Airline Structures

Thu Apr 11, 2013 2:11 am

Basically those airlines are under the umberlla of Big 4 (CA; MU; CZ & HU) families.
Many local governments have interest in their "local" airlines. In addition, many of them will provide subsidies / favibale policies to them. As most of them share everythings (the same products; same planes; and some time same liveries) etc with the Big 4....The additional costs are insignificant. So from the Big4's view, it is better for them to establish those subsidiaries instead of operating under their own brand.
 
airways1
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RE: Crazy Quilt Of Chinese Airline Structures

Thu Apr 11, 2013 4:42 am

I think it's not so surprising in a regulated market. In the days when the US was regulated, there were many many more airlines than there have ever been in China.
 
winglets747
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 7:04 am

From CAPA's Airline Leader journal/magazine. There have been some changes since, but you get the picture.
http://www.airlineleader.com/this-mo...s-power-change-and-airline-impacts
Stay hungry. Stay foolish.
 
justinlee
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 7:53 am

Quoting davidho1985 (Reply 4):
Basically those airlines are under the umberlla of Big 4 (CA; MU; CZ & HU) families.
Many local governments have interest in their "local" airlines. In addition, many of them will provide subsidies / favibale policies to them. As most of them share everythings (the same products; same planes; and some time same liveries) etc with the Big 4....The additional costs are insignificant. So from the Big4's view, it is better for them to establish those subsidiaries instead of operating under their own brand.

Excellent explanation.

Quoting airways1 (Reply 5):
I think it's not so surprising in a regulated market. In the days when the US was regulated, there were many many more airlines than there have ever been in China.

Yes...for example, when China Southern (with main hub in CAN) can't established a hub in CTU, they just open a new company...(Sichuan Airlines)

Quoting rutankrd (Reply 1):
The CAAC still controls aviation infrastructure.

Infrastructure? No...if so, airlines in China would be much happier. Airports are owned...by different parties...some are public company (major airports such as PEK, CAN, SHA, PVG, SZX, XMN), some are JV (for example, my homebase HGH is a JV of Hong Kong Airport Admin and local government), small airports are solely owned by local government, some are even owned by the PLA. It's very hard for airlines to negotiate with airports to gain slots if they are not the shareholder.

[Edited 2013-04-23 00:57:23]
 
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Coal
Posts: 2591
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 10:12 am

Quoting airdfw (Thread starter):
Uni Airways
Xiamen airlines
Shenzhen airlines
Shanghai airlines
Shandong airlines
Sichuan airlines
Joy air
China United airlines
Dalian airlines
Chongqing airlines
Grand china airlines

How is this different from:

American
United
Delta
jetBlue
Frontier
Southwest
Virgin America
Alaska
Hawaiian
Spirit
Allegiant
US Airways
Horizon
Sun Country
Etc

Cheers
Coal
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rutankrd
Posts: 3025
Joined: Mon Sep 08, 2003 6:08 am

RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 10:21 am

Quoting Coal (Reply 8):
How is this different from:

Its about as different as it gets the US companies a true independent private stock companies - the chinese carriers are really no more than state and regional publicly owned bodies (Cue socialism at work )

Quoting justinlee (Reply 7):
Infrastructure? No...if so, airlines in China would be much happier. Airports are owned...by different parties...some are public company (major airports such as PEK, CAN, SHA, PVG, SZX, XMN), some are JV (for example, my homebase HGH is a JV of Hong Kong Airport Admin and local government), small airports are solely owned by local government, some are even owned by the PLA. It's very hard for airlines to negotiate with airports to gain slots if they are not the shareholder.

Really still tools of the state as opposed to true free enterprise
 
justinlee
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 11:33 am

Quoting rutankrd (Reply 9):
Really still tools of the state as opposed to true free enterprise

Yes but what I mean is that government is not one entity, government includes a lot of interest groups, which makes Chinese airlines to operate almost as hard as airlines in a "truly" free economy.
 
rutankrd
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Joined: Mon Sep 08, 2003 6:08 am

RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 11:42 am

Quoting justinlee (Reply 10):
Yes but what I mean is that government is not one entity, government includes a lot of interest groups, which makes Chinese airlines to operate almost as hard as airlines in a "truly" free economy.

Total myth !

Oh and i am not a right wing neocon but socialist in the European sense and am far from deluded by the workings of China Corp !

It remains a managed economy end off.
 
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N14AZ
Posts: 4189
Joined: Sat Feb 24, 2007 10:19 pm

RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 2:28 pm

Quoting winglets747 (Reply 6):
From CAPA's Airline Leader journal/magazine. There have been some changes since, but you get the picture

Great overview. I think there are even more (well, as you said, there have been some changes since...), for example in Batou, Inner Mongolia, I always see some planes of Deer Air in basic HNA-cls (I think deer is kind of a symbol for Inner Mongolia?).
 
infinit
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 3:11 pm

Quoting airdfw (Thread starter):

Shouldn't Cathay Pacific be in there since Hong Kong is a part of China?
 
airDFW
Topic Author
Posts: 293
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RE: Crazy Quilt Of Chinese Airline Structures

Tue Apr 23, 2013 6:05 pm

Ok, so the explanation of that the Chinese govt does not let opening of the hubs as desired by established companies seems to be most logical to open a new airline company. Still don't they get additional costs associated with these new companies?

Quoting infinit (Reply 13):
Shouldn't Cathay Pacific be in there since Hong Kong is a part of China?

Only with CX and Air China's cross eyed relationship? Do they have something else cooking in mainland?
 
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huaiwei
Posts: 359
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RE: Crazy Quilt Of Chinese Airline Structures

Wed Apr 24, 2013 2:07 am

Quoting rutankrd (Reply 11):
Total myth !

So which part of Justinlee's comment is a myth?

That the Chinese government is one single entity with only one interest group?

That it is easy to operate an airline in the Chinese market?

How about some concrete facts to prove your case?

Quoting infinit (Reply 13):
Shouldn't Cathay Pacific be in there since Hong Kong is a part of China?

Aren't they already in the CAPA diagram?
It's huaiwei...not huawei. I have nothing to do with the PRC! :)
 
MaverickM11
Posts: 18246
Joined: Thu Apr 06, 2000 1:59 pm

RE: Crazy Quilt Of Chinese Airline Structures

Wed Apr 24, 2013 3:14 am

Quoting airdfw (Thread starter):
Is the proliferation of airlines is due to Local sensitives? Or just me too mentality of Local bosses? Any insight on why?

I think it's basically all of the above. Ultimately CAAC is running the entire show, and if they think a new carrier is going to boost a certain region's growth and/or appease some local boss, then one is started. There's little rhyme or reason to the Chinese aviation industry, which is frustrating since there is so much potential. What I don't get is that the CAAC actually went through a period of consolidation into three big carriers, so why the reversal?
I don't take responsibility at all
 
justinlee
Posts: 335
Joined: Wed Aug 29, 2012 3:08 pm

RE: Crazy Quilt Of Chinese Airline Structures

Wed Apr 24, 2013 3:28 am

Quoting MaverickM11 (Reply 16):
I think it's basically all of the above. Ultimately CAAC is running the entire show, and if they think a new carrier is going to boost a certain region's growth and/or appease some local boss, then one is started. There's little rhyme or reason to the Chinese aviation industry, which is frustrating since there is so much potential. What I don't get is that the CAAC actually went through a period of consolidation into three big carriers, so why the reversal?

Quite simple...one boss, one policy.

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