Airlines in China - Industry Report.pdf
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1、CONTENTS Error! No text of specified style in document. June 2012 | 1-800-330-3772 | IBISWorld Industry Report 5511 Airlines in China June 2012 About This Industry . 2 Industry Definition 2 Main Activities . 2 Similar Industries . 2 Additional Resources . 3 Industry Performance 4 Executive Summary
2、 . 4 Key External Drivers 4 Current Performance . 4 Industry Outlook 6 Industry Life Cycle . 7 Products while 60.5% of responders prefer to choose their member airlines. External competition External competition includes competition from competing industries, including rail (IBISWorld industry repor
3、ts 5110 and 5320), road and water transport. Rail transportation is the most common long-distance transportation method for passengers in China and is the major external competition for the industry. In 2009, railway transport accounted for about 32.8% of Chinas total passenger volumes, down from 36
4、.2% in 2001. However, in recent years, the Ministry of Railways has raised the general speed of railway transport six times to reduce travel times. In July 2011, the high-speed system between Beijing and Shanghai was officially put into practice, which halved the time it took previously. In December
5、 2009, China launched the worlds fastest train, which connects Guangzhou and Wuhan, and travels at 350 kilometers an hour. In 2007, Chinas D-Train Services were introduced, with speeds of 200 to 250 kilometers per hour. Such new train services will provide more intense competition for air transport
6、services, especially in long-distance transport. Rail transport is characterized by high security and low price, and, in view of the relatively low income level of Chinese people, railway transport still has a competitive advantage over air transport, especially in medium-to-long distance transport.
7、 Although road transport accounts for 50.0% of Chinas passenger volumes, competition from this sector is not major as road transport and air transport do not usually compete in the same market segment. Road transport of passengers usually covers short and medium distances, while air transport of pas
8、sengers usually covers medium and long distances. WWW.IBISWORLD.COM.CN Airlines in China June 2012 19 The only competition between the two methods is in the market of medium distance transport, where air transport has the advantages of high speed and comfort, while road transport has price and flexi
9、bility advantages. Competition from water transport of passengers is marginal; water transport only accounts for 0.4% passenger volumes and has been decreasing since 2001. Water transport of passengers is limited to coastal regions or river regions, and such transport is characterized by low speed,
10、large capacity and less flexibility. WWW.IBISWORLD.COM.CN Airlines in China June 2012 20 Barriers to Entry Barriers to entry are high and decreasing. Barriers to Entry checklist Level/Impact Industry Competition High Industry Concentration Medium Life Cycle Stage Growing Capital Intensity High Techn
11、ology Change High Regulation and Policy Heavy Industry Assistance Medium SOURCE: IBISWORLD Fixed costs The price of one Boeing 737 aircraft is about $70.0 million, which is a significant investment. Fixed investment in this industry is so large that small companies cannot enter the industry. Securit
12、y requirements As security requirements of air transport are very high, government entry admissions requirements are very strict to minimize accident rates. Flight scheduling limitations Flight schedules in airports are limited and strictly controlled. This is due to the limited capacity of airports
13、. Therefore, if airport flights are controlled by existing companies, it is very difficult for new entrants to operate their flights. Reputation Air passengers pay attention to airline security, reliability and safety, and well-known airline brands provide these. Therefore, new brands, especially do
14、mestic brands, are often not as easily accepted by some passengers. WWW.IBISWORLD.COM.CN Airlines in China June 2012 21 Industry Globalization The level of globalization is low and increasing. This industry has a low globalization level due to its ownership characteristics; however, the globalizatio
15、n level is expected to increase in future years. Foreign ownership accounted for about 20.0% of total industry assets in 2010. Many international airlines have also entered this industry in China, such as Deutsche Lufthansa AG, Dragonair, and Finnair. In addition, there have been increasing numbers
16、of alliances between domestic airlines and international airlines in recent years. Domestic flights have a much larger market share than international flights, including Hong Kong and Macau flights. For example, in 2010, over 80.0% of passenger volumes of China Southern Airlines Company, one of Chin
17、as largest airlines, were represented by domestic flights. The number of international flights operated by the industrys largest airlines is increasing. For example, in 2010, passenger volumes of international flights by Air China Limited accounted for around 25.0% of the companys total passenger vo
18、lumes. Increasing numbers of international flights lead to a higher globalization level. WWW.IBISWORLD.COM.CN Airlines in China June 2012 22 Major Companies Major Player Market Share Air China Limited 16.8% (2012) China Southern Airlines Company Limited 14.9% (2012) China Eastern Airlines Corporatio
19、n Limited 14.4% (2012) Hainan Airlines Co., Ltd. 5.2% (2012) Other 48.7% (2012) Air China Limited Market Share: 16.8% The predecessor of Air China was China International Airline Company, which was founded in 1988. In October 2002, China International Airline Company incorporated with China Airlines
20、 and China Southwest Airlines Company to establish China National Aviation Holding Company, the largest shareholder of Air China. Integrating resources of the three large airlines, China National Aviation Holding Company established a new China International Airlines Company. In September 2004, Air
21、China Limited was founded in Beijing. Headquartered in Beijing, the company has subsidiaries in Zhejiang, Chongqing, Inner Mongolia, Tianjin, Guizhou, Shanghai, Hubei and Tibet. In addition, Air China holds stocks of Shenzhen Airline, Cathay Pacific Airways and Air Macau. By November 2010, Air China
22、 had 280 passenger airplanes in operation, most of which were Boeing and Airbus. Air China has strong transport capacity and an extensive network, both national and international. Based on the national hub in Beijing, in recent years, Air China has established several hubs in Chengdu, Shanghai and G
23、uangzhou to develop markets in the Southwest, East and South China, respectively. 2011 Company revenue was reported as $ 15.2 billion in 2011, up 27.3% from 2010. Passenger transportation accounts orf 64.1% of its total revenue. In 2011, the company purchased 38 new airplanes, totaling a fleet of 30
24、8 airplanes. 2010 Air China reported revenue of $10.4 billion from the transportation of passengers, which accounted for 86.5% of total revenue, up 59.9% from 2009. The growth was supported by increasing domestic demand due to the Shanghai Expo and Asian Games. Air China opened three domestic flight
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