China Southern, China Eastern plan further expansion to compete with Air China
After building new bases in Beijing, China Southern and China Eastern plan further expansion, posing competition for rival Air China.
A new airport in Beijing's southern Daxing district is about to break the balance of China's three biggest airlines, as China Eastern Airlines and China Southern Airlines are seeking to expand their turfs in the national capital, competing head-to-head with Beijing-based Air China.
On Tuesday, China Southern unveiled a new travel base at the soon-to-be-opened airport in Daxing.
The new mega airport, scheduled to open in 2019, is being built to divert traffic from the overly saturated Beijing Capital International Airport (BCIA) in northern Beijing and has also been designated as the hub for members of the SkyTeam alliance, a group of global airlines that includes China Eastern and China Southern.
Meanwhile, Air China will stay at the existing airport in the capital's north.
Following its groundbreaking move Tuesday, China Southern said that it will now oversee three project phases to help with meeting its operation aims at the new airport in Daxing.
By 2025, the carrier said it expects to have inputted 250 aircraft, 20,000 employees and 900 daily flights at the airport in Daxing.
With Beijing-based Air China currently holding absolute privilege of flight slots, international air traffic rights and land as well as asset resources at BCIA, industry insiders say that the use of the new airport is a "game-changer" for China Eastern and China Southern.
According to data published by industry website feichangzhun.com on Tuesday, Air China leads passenger capacity at BCIA - which handled 94 million passengers overall in 2016 - with a market share of 38.12 percent, while that of China Southern and China Eastern stood at 12.46 percent and 11.22 percent, respectively.
Its dominating capacity allows Air China to be the largest Chinese carrier of flights to the US and Europe, especially as China Eastern currently does not have any direct long-haul services out of Beijing, data from UK-based industry website FlightGlobal shows.
However, the new airport, which is estimated to manage a capacity of 72 million passengers a year in its initial stage, will help China Southern and China Eastern acquire coveted time slots of lucrative flight routes to the US and Europe, posing strong competition for Air China.
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