Friday, September 23, 2016

China: Boom, Sleep, and Dreamliners

China's economic boom has successfully come to rest without a complete global airline expansion. It lags behind what happened in China during its last decade of business. The Chinese market place is in a deep slumber soon to awaken. It has sweet dreams of buying the 787 Dreamliner as the new wealth left behind during its current nap are still traveling everywhere. Plans are in place for global expansion via the Dreamliner. It dreams of wide bodies filling the Chinese sky with 787-9's. There are a bevy of subsidiary airlines in hot pursuit before the next economic expansion arrives. 

CAPA report:

"Hainan Airlines Group reported (18-Sep-2016) the following traffic* highlights in Aug-2016:

  • Passenger numbers: 4.3 million, +28.7% year-on-year;·        
    • Domestic: 4.0 million, +27.9%;
    • International: 256,530, +46.8%;
    • Regional: 25,260, +4.5%;
  • Passenger load factor: 89.8%, -0.9 ppt;·     
    • Domestic: 91.2%, -0.3 ppt;
    • International: 85.9%, -2.7 ppts;
    • Regional: 77.0%, -8.6 ppts;
  • Cargo volume: 31,070 tonnes, +6.0% 
    • Domestic: 25,800 tonnes, +1.0%;
    • International: 5220 tonnes, +39.8%;
    • Regional: 50 tonnes, +18.8%. [more - original PR]

*Includes traffic for Hainan AirlinesChina , Xinhua AirlinesChang’an AirlinesShanxi AirlinesLucky Air Company LimitedFuzhou Airlines and Urumqi Airlines."

Hainan is the test bed for Lucky Air’s march forward in the wide body market with its 787's currently moving passengers to and fro across continents. The plethora of airlines above is just scratching the Chinese commercial aviation surface and only coming from just one airline group! Boeing currently leads the Hainan pack.

Then of course there is a Chinese rebuttal to Hainan's aggressive 787 behavior.

Aviation Week:

Even though Boeing is bemoaning a difficult 787 sales year showing only nineteen 787 yet booked for 2016, it will announce many more sales before year's end, principally coming from China. The potential for Boeing is a strong upside as players are lining up for a market move towards the 787. The pilot hole is exampled by the above statistic is from the Hainan "Airline Group".

The group is but a smaller player for China's wide body aspirations. The question before them at this time is to go wide or narrow as the above link will indicate. The airlines, Ruili and Donghai are actively pursuing Boeing 787's over the 737. This has been a back and forth debate for those airlines and it sounds like they have settled in on wide body aircraft for its final decision as reported in the link above.

Boeing should make forty 787 orders by year's end, judging by the on-the-surface Sales-in-progress currently reported since the first of the year.