ATW Daily News

China Southern, China Eastern ground aircraft, cut flights

Friday November 14, 2008

China Southern Airlines and China Eastern Airlines have started to ground aircraft and cut flights as there is little sign of a recovery in the slumping domestic market.

According to CAAC, Chinese carriers again suffered from falling demand last month despite the "golden week" travel period surrounding Oct. 1 National Day. Passenger load factor fell 2.2 points year-over-year to 76.9% while daily aircraft utilization was down 2.1% to 9.2 hr (ATWOnline, Sept. 17).

CZ President Liu Shaoyong said the company has grounded 12 MD-82s and reconfigured both its domestic and international schedules. He predicted that the "domestic market will recover in the second half of next year while the international market will turn for the better in 2010."

CEA President Li Fenghua agreed with Liu and blamed the global economic downturn for the domestic decline. "Nowadays almost all the big carriers are cutting flights, especially international flights," Li noted. Earlier, CEA Board Secretary Luo Zhuping told foreign media that the carrier has cut some "unprofitable" routes and grounded about 20 aircraft in secondary domestic markets.

The difficulty facing Chinese carriers again has raised the possibility of consolidation (ATWOnline, Oct. 31). CAAC Minister Li Jiaxiang said the regulator would support any move that would benefit the airline industry, claiming that it is necessary to "huddle together to get warmth against the cold." But Liu pointed out that China's "big three" will continue to limit their cooperation to business areas that do not involve stakes.

by Katie Cantle

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