China Eastern Sets up Guangdong Airline Hub to Capture Southern China Market Share from Rivals
Yicai Global
/SOURCE : Yicai
China Eastern Sets up Guangdong Airline Hub to Capture Southern China Market Share from Rivals

(Yicai Global) Oct. 17 -- China's three largest state-owned airlines, by fleet size, Beijing-based China Southern Airlines Co. [HKG:1055], the country's biggest carrier with a fleet of 507 China Eastern Airlines Corp. [SHA:600115] in Shanghai with 407 and Guangzhou's Air China Ltd. [SHA:601111] with 348 aircraft are now penetrating into the key markets of their rivals.

China Eastern recently set up a branch in Guangdong province in a bid to establish a stronger presence in the southern China market. The new company will increase the number of flights from Guangzhou to Shanghai, Kunming and Xi'an as well as making investments and exploring markets in neighboring cities like Shantou, Zhuhai and Zhanjiang, Yicai Global found.

Internationally, China Eastern's Guangdong branch plans to offer flights from Guangzhou and Shenzhen to Cambodia, Vietnam and Malaysia and will also offer long-haul international flights from Guangzhou to Australia and the Americas when appropriate.

The branch will mainly operate Boeing series aircraft and expand its fleet at a rate of five to eight new planes annually. It plans to base nearly 60 new aircraft in Guangdong by the end of the 13th five-year period.

After establishing the hub, China Eastern will consolidate its resources and increase flights in southern China to improve and optimize its aviation networks both nationwide and globally, Mr. Zhai Zhigang, the airline's Guangdong branch general manager told Yicai Global.

As major airlines penetrate into the traditional key markets of their rivals, they will face increasing competition, while customers may have access to more competitive ticket prices and services, Mr. Lin Zhijie, an insider from the civil aviation industry, told Yicai Global.

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