After becoming the largest aviation market in the world, China aviation and its major players are continuing to expand.
Major airlines
Up until 1988, all China’s airlines were centrally organized and known as the Civil Aviation Administration of China (or CAAC) airline. CAAC started flying in 1949, eventually expanding its fleet and opening international routes to Europe, the Middle East, the United States, and Australia.
In 1988, the CAAC airline was split into six separate airlines: Air China, China Eastern, China Southern, China Northern, China Southwest, and China Northwest. Most of them were named after the regions they were to be based in, for example, China Southern’s base is in Guangzhou (CAN), and China Eastern is based in Shanghai (now PVG).
Since then, a few consolidations took place. In 2003, Air China absorbed China Southwest, China Southern got China Northern, and, in 2002, China Easter consolidated China Northwest. Currently, Air China, China Eastern Airlines (CIAH) (CEA), China Southern Airlines (ZNH), and Hainan Airlines are the “Big Four” of China. CAAC now serves as China’s Civil Aviation Authority regulating the industry.
Air China is headquartered in Beijing and operates flights to 68 international destinations. China Southern, based in Beijing and Guangzhou, flies to 193 international destinations in 35 countries. China Easter, based in Shanghai, has 40 international routes. In 1993, Hainan Airlines was founded. Headquartered in Haikou, it is the fourth largest airline in terms of fleet size in China.
In October 2020, China Southern airlines became the largest airline in the world, as it managed to return to its pre-COVID levels of operating capacity.
China’s aviation has seen a significant recovery despite being the first one hit by the coronavirus pandemic. Since March 2020, domestic air transport has recovered to 94.5% of the previous year’s levels. In 2020, a total of 420 million passengers were transported, or 61.7% of the number in 2019.
“Airlines based in China have already seen a full recovery of domestic air travel, and in fact Chinese airlines have probably seen a return to profitability already,” said IATA chief economist Brian Pearce in January 2021.
Major Airports
In 1978, around 2 million people flew in China. The number went up to 660 million in 2019. At the end of 2019, China had 39 mega airports, capable of serving more than 10 million people yearly, according to the CAAC. By the end of 2019, the total number of civil airports in China reached 238, while the government officials estimate around 450 airports will be needed across the country by 2035.
China now has the world’s biggest airport in Beijing Daxing International Airport (PKX). The airport was opened in 2019, and has become the main aviation hub for three major Chinese airlines – Air China, China Southern Airlines (ZNH) and China Eastern Airlines (CIAH) (CEA). In January 2021, China’s Guangzhou Baiyun International Airport (CAN) became the busiest airport in the world. In 2020, the airport carried 43.8 million passengers.
China’s government has embarked on an airport building program that led to 43 newly built or relocated airports and 241 newly certified airports in the last five years, according to the data from the annual civil aviation conference, held on January 12, 2021. In addition, 41 new runways, 5.88 million square meters of terminal buildings and 2300 aircraft parking spaces have been added. The new facilities increase the capability to serve 400 million people more, with a total capacity to serve 1.4 billion people.
Aircraft manufacturing
In an effort to enter the competition with such manufacturing giants as Airbus and Boeing, China has been developing its own aircraft. The State-backed Commercial Aircraft Corporation of China (COMAC) has built the ARJ21 and the C919, and is working on the CR929 model with Russia.
COMAC ARJ21 was China’s first domestically produced regional aircraft. The development of the jet began in 2002, while the maiden flight was operated in 2008. Currently, the proportion of Chinese-built civil aircraft in use for regional aviation has reached 33% and is expected to keep growing as the ARJ21 will slowly replace the retiring Embraer E190 and Bombardier CRJ models, according to a conference report released by the Civil Aviation Administration of China on January 12, 2021.
The C919 aircraft is comparable to the Airbus A320 Family and Boeing 737 narrow-body jets. COMAC is reportedly set to make the first commercial delivery of the new C919 passenger plane by the end of 2021. It is expected that China Eastern Airlines (CIAH) (CEA) would become the first Chinese air carrier to add the newly built C919 to its fleet.
The CR929 is going to be a wide-body aircraft in competition with the Boeing 787 and the Airbus A330. The CR929-600 model will seat 280 passengers and have a range of at least 12,000 kilometers (7,500 miles). In December 2020, chief designer of COMAC Chen Yingchun revealed that the company hoped to start delivering new aircraft to airlines in 2023.
As of 2021, COMAC aircraft were certified to fly only by China’s aviation regulator, meaning it can operate in China and in parts of Asia, Africa and South America that recognise Chinese certification. To expand its operations, COMAC will need to receive the US Federal Aviation Administration (FAA) and the European Aviation Safety Agency (EASA) approvals.
In September 2020, the agreement signed by the EASA and the CAAC went into effect. The bilateral agreement would pave the road for an easier certification process and “ensure high safety and environment standards will continue to be met.”
COMAC might be targeting emerging markets in Africa and Asia, as it aims to offer a more affordable aircraft. The C919 list price is reportedly about $50 million, which is roughly half the price of the Airbus A320neo.
Roadblocks
The ongoing trade conflict between China and the United States began under the US president Trump’s administration in 2008. The US has imposed tariffs on more than $360 billion of Chinese goods, including aircraft parts, and China in return imposed tariffs on more than $110 billion of US products.
On January 14, 2021, the Trump administration imposed an investment ban on COMAC, due to the alleged ties to the Chinese military. The sanctions could potentially bar United States-based suppliers from supplying the company thus halting the manufacturer’s production. The C919 still relies on American and European imports for such components as the engine, avionics, and landing gear. The engines, onboard electric systems, and other components for the CR929 also need to be sourced from foreign suppliers.
COMAC’s website lists a number of US companies as main suppliers of key component systems, such as Honeywell, B/E Aerospace, Donaldson, Moog and Parker Hannifin.
