||CHINA SOUTHERN AIRLINES
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GUN-2003-02 - DESTINATIONS
GUN-2005-01 2004 STATS
GUN-2011-11 FIRST A380 DELIVERY
GUN-2012-11 - 1ST 787
GUN-2013-07 - 787-8
GUN-2014-01-TOP 2013 WORLD AIRLINES-A
GUN-2014-01-TOP 2013 WORLD AIRLINES-B
GUN-2014-02-777-300ER PREMIUM ECONOMY
GUN-2014-07-TOP 12 AIRPORTS
GUN-2015-04 - TOP 25 WORLD TRAFFIC.jpg
GUN-2015-07 - Lanzhou to St Petersburg.jph
GUN-2015-08 - CGO to Tokyo Narita.jpg
GUN-2015-08 - GAMEC.jpg
GUN-2015-08 - Guangzhou to Nairobi.jpg
GUN-2015-12 - 737NG 737 MAX.jpg
GUN-2016-01 - Shenzhen to Sydney.jpg
GUN-2016-12 - Airlines with 100 Plus Airplanes.jpg
GUN-2017-11 Trinh Cha - Ba Hai - Da Nang.jpg
GUN-2018-05 Wuhan to LHR.jpg
GUN-2018-06 Top 12 Airports 2018 vs 2017.jpg
GUN-2018-06 Top Country Markets 2018 vs 2017.jpg
GUN-2018-06 Yearly Traffic Growth.jpg
GUN-2018-07 Sanya (SYX) to LHR.jpg
GUN-AIRPORT BAIYUN-A 2004-06
GUN-AIRPORT BAIYUN-B 2004-06
GUN-AIRPORT-BAIYUN - 2004-08
GUN-Cabin Attendants - 2016-10.jpg
GUN-F PASSENGER SEAT 2005-01
GUN-MAP MAJOR AIRLINES LOCATION
GUN-SKYTEAM ALLIANCE - 2007-11
GUN-SKYTEAM ALLIANCE-A 2004-10
GUN-SKYTEAM ALLIANCE-B 2004-10
FORMED IN 1991 AND STARTED OPERATIONS IN 1995. SCHEDULED, DOMESTIC, REGIONAL & INTERNATIONAL, PASSENGER & CARGO, JET AIRPLANE SERVICES.
278 AIRPORT ROAD
510405 GUANGZHOU, (GUANGDONG), CHINA
China (People's Republic of China) was established in 1949, it covers an area of 9,560,980 sq km, its population is 1,265 million, its capital city is Beijing, and its official language is Chinese.
NOVEMBER 1992: ACCDT: (GUN) 737-3Y0 (2052-24913, /91, B-2523) CRASHED AT YANETI, CHINA, = 8 (FC)-(CA)/113 PASSENGER FATALITIES .
DECEMBER 1992: 6/0 ORDERS 777-200, 380 PASSENGERS (PAX), 2 CLASS. IN 1993, TO WET-LEASE 3 IL-86'S & 2 TU-154'S (SHORT OF PILOTS).
JANUARY 1993: 1992 = +44.5% PASSENGERS. 737-349 (PS631), EX-(AML), C ITOH LEASED.
MARCH TO DECEMBER 1993: 737-31B (PM541), 2 737-3Q8 (PQ479, PQ480), 3 737-3YO'S (PM415 - 7) (CFM56-3B1), 4 737-5YO'S (PT061 - 4), (GUI) LEASED & 3 757-21B'S (NB265 - 7).
JULY 1993: TO LEASE 5 737-300'S, 4 757'S, 2 767-300ER'S IN 1993, +10 BOEING AIRPLANES IN 1994.
SEPTEMBER 1993: 2 767-300ER'S, 7 YEAR (ILF) LEASED. 1 767-300ER, EX-CANADIAN (CDI), BOULLIOUN (BOU) LEASED.
DECEMBER 1993: 1 737-300 DELIVERY.
MARCH 1994: CHINA SOUTHERN (GUN) ACCUSES (CAC) OF WITHHOLDING APPROVAL OF LONG HAUL FLIGHTS TO EUROPE, UNLESS (GUN) ACCEPTS 6 A340'S THEY DON'T WANT.
2 737-300'S, 2 737-500'S & 1 767-31B (VL701) DELIVERIES.
JUNE 1994: 737-300, 757 & 767 DELIVERIES.
AUGUST 1994: NEW AIRPORT FOR CHINA SOUTHERN (GUN) AT HUADU CITY, 35 KM NORTH, TO BE COMPLETED IN 2003.
AGREEMENT SIGNED RE-2 747-400'S, EX-VARIG (VAR), (ILF) LEASED FOR SAN FRANCISCO (SFO) ROUTE (1995) (STATED DOES NOT WANT A340'S).
DECEMBER 1994: 1 737-300, 7TH DELIVERY IN 1994.
JANUARY 1995: CHINA SOUTHERN (GUN) "BRANCH" AIRLINES SUBSIDIARIES ARE: XIAMEN AIRLINES (XIA), SHENZHEN AIRLINES (SHZ), HAINAN AIRLINES (HNA), AND GUANXI AIRLINES (GUX).
THE LOGO OF (GUN) IS THE RED KAPOK, A LARGE RED FLOWER OF THE KAPOK TREE, A SYMBOL OF INDEPENDENT & NOBLE MINDED PERSONALITY, FRANKNESS AND CORDIALITY, IN A MORAL CHARACTER. THE 3 STAMENS OF THE FLOWER CORRESPOND TO THE NUMBER "3" WHOSE PRONUNCIATION IN CHINESE IS IN HARMONY WITH "VIGOR," DEVELOPMENT AND PROSPERITY.
APRIL 1995: JOINT VENTURE WITH ZHUHAI CITY GOVERNMENT TO START ZHUHAI AIRLINES (ZHU) WITH 3 737-31B'S AIRPLANES, EX-(CAC).
JUNE 1995: STILL TRYING TO WET-LEASE 2 747-400'S EX-AIR FRANCE (AFA).
SEPTEMBER 1995: SCHEDULES 767 TO OSAKA, JAPAN, RECIPROCAL WITH JAPAN AIR SYSTEM (JAS).
NOVEMBER 1995: PLANS TO LEASE 2 747-400'S FOR 2 YEARS IN 3/96 AS INTERIM, AS 6 777'S ARE DELIVERED THROUGH 1998.
DECEMBER 1995: (GAMECO) CONTRACT FOR 2 ROYAL NEPAL AIRLINES (RNA) 757'S.
1 737-500 (CFM56-3C1), EX-(TAESA) (TES). 1ST 777 TO FLY GUANGZHOU TO BEIJING, SHANGHAI & HANGZHOU. TO WET-LEASE 2 MD-11'S FROM WORLD AIRWAYS (WLD) NEXT APRIL PENDING FORCED ACCEPTANCE OF A340'S, IN 1997 & 1998.
JANUARY 1996: 1995 = 14.28 MILLION PASSENGERS. CARRIED 28% OF ALL CHINA AIR CARGO.
1ST 777-21B (GE90) DELIVERY.
MARCH 1996: RELIABILITY PROGRAM IS 1ST TO BE APPROVED BY (CAAC) (INCLUDING 9 BRANCH AIRLINES).
1 737-300 DELIVERY. 767 (VN813) RETURNED TO LESSOR & LEASED TO AIR NEW ZEALAND (ANZ). +3 ORDERS (11/97 TO 2/98) 777-200'S (GE90), (ILF) LEASED.
JUNE 1996: (GAMECO) OPENS MAINTENANCE BRANCH AT WUHAN. PLANS TO OPEN ANOTHER AT CHANGSA IN 1/97.
777 (AOG) AT KUALA LUMPUR FOR 4 DAYS, DUE TO RH HYDRAULIC SYSTEM FAILURE. 777 FLIES TO BEIJING, SHANGHAI, KUALA LUMPUR, HONG KONG AND SINGAPORE.
GOVERNMENT REQUIRED (GUN) TO ORDER (1997) 10 A320'S (V2500).
JULY 1996: TO FLY TO SHARJAH, (UAE) STARTING IN 9/96 WITH A 757 AND MAY SWITCH TO A 767 LATER. ROUTE IS VIA BEIJING, URUMQI AND SHARJAH.
(CAAC) AND (FAA) AUDITS FOUND (GAMECO) OK.
CAPTAIN YU-YAN EN PRESIDENT REPORTED TO BE "VERY INTERESTED IN 747-500X AIRPLANES."
(GAMECO) JOINT VENTURE EXTENDED FROM 20 TO 30 YEARS. NOW EMPLOYS 1,300 EMPLOYEES. HALF OF (GAMECO)'S INCOME IS DERIVED FROM HANGAR CHECK OF MANY CHINESE AIRLINES & ROYAL NEPAL (RNA), WHO JUST SIGNED 2 YEAR FLEET MAINTENANCE CONTRACT FOR ITS 757'S.
AUGUST 1996: DELTA AIRLINES (DAL) AUDIT OF (GAMECO) MAINTENANCE FACILITIES. POSSIBLE CODE SHARE WITH (DAL) TO USA WEST COAST.
SEPTEMBER 1996: FUTURE PLANS INCLUDE +30 757-300'S.
OCTOBER 1996: HONG KONG APPROVAL AS TRANSIT STOP TO BRISBANE.
STARTED TO RETURN 767'S TO LESSOR (2 BY 11/96).
NOVEMBER 1996: GUANGZHOU TO BEIJING TO AMSTERDAM, 9,500 KM. TO KUALA LUMPUR (757), 4,100 KM, 5 HOURS 10 MINUTES FROM SHANGHAI.
180 MINUTES (ETOPS) TO LOS ANGELES (LAX) IN 4/97 USING 777 (IGW).
(CASC) ALLOCATED 7 + 10 ORDERS A320'S (V2500) TO CHINA SOUTHERN (GUN).
DECEMBER 1996: 4TH 777 DELIVERY. TO START 777 LOS ANGELES (LAX) SERVICE IN 3/97.
MARCH 1997: 1ST 777-200 (GE90-90B) (IGW), FOR ROUTE TO LOS ANGELES (LAX), 7,800 MILES.
APRIL 1997: 6TH 777 DELIVERY. 1ST FLIGHT TO AMSTERDAM. (FAA) & (CAAC) AUDITS OF 777 OPERATION.
(GUN) IS AWAITING APPROVAL, TO FLY TO USA WEST COAST. APPLIED FOR ROUTES TO AUSTRALIA.
(GAMECO) CONTRACT FOR XINHUA AIRLINES (XIN) 757 MAINTENANCE.
AIRBUS DEPUTY VP ENGINEERING, & TEAM, CONDUCTED AUDIT FOR A320.
MAY 1997: 777-200 (IGW), 380 PASSENGERS (PAX) FOR SHENZHEN TO SHANGHAI & BEIJING. TO TAKE +3 A320'S FOR TOTAL 20 (LARGEST NUMBER OF AIRBUS AIRPLANES IN CHINA).
ACCDT: 737-31B (27288) CRASHED IN RAINSTORM ON LANDING AT SHENZHEN = 2/33 FATALITIES OF 9/65. OPERATED BY CHINA SOUTHERN (GUN) SUBSIDIARY, GUANGXI AIRLINES (GUX).
JUNE 1997: JIANGSU BRANCH FLYING NANJING TO ZHANGJIAJIE (POPULAR SUMMER TOURIST DESTINATION). ALSO JIAMUSI TO SHENYANG & DALIAN.
SHEN TAI RAN, GENERAL MANAGER MAINTENANCE & ENGINEERING. MRS WEI GUI LAN, VICE GENERAL MANAGER MAINTENANCE & ENGINEERING & DIRECTOR ENGINEERING. YUAN XIN AN, VICE GENERAL MANAGER PLANNING & AIRWORTHINESS & DIRECTOR PLANNING & AIRWORTHINESS.
1ST A320 DELIVERY.
JULY 1997: 1ST TRANSPACIFIC FLIGHT BY 777-200 (IGW) (ETOPS), TO LOS ANGELES (LAX), 7,800 STATUTE MILES.
PLANS TO POSITION ALL 737'S AT BRANCH AIRLINES BY END OF 1997 WITH A320'S, 757'S, 767'S, & 777'S BASED AT GUANGZHOU.
SEPTEMBER 1997: TO MELBOURNE AND TO BRISBANE (777). 1ST CHINESE CARRIER TO OPERATE INTERNATIONAL FROM HONG KONG SINCE CHINA TAKEOVER WITH SERVICE TO KUALA LUMPUR.
NOW HAS 6 A320'S.
OCTOBER 1997: 16,400 EMPLOYEES.
(GAMECO) TO BUILD NEW $108 MILLION ENGINE-TEST CENTER BY 2000. ALSO, $28 MILLION AIRCRAFT MAINTENANCE HANGAR AT WUHAN TO START EARLY 1998, SINGLE BAY FOR 1 757, OR 2 737'S, PRIMARILY FOR "A" & "C" CHECKS. 18 MONTHS TO COMPLETE. LONG TERM AT NEW GUANGZHOU AIRPORT. CONSTRUCTION BY 2002 OF $70 MILLION 3-BAY WIDE BODY HANGAR WITH SHOPS AND STORES. 2ND HANGAR BY 2005, & 3RD FOR 2010. (GAMECO) HAS (FAR) 145 APPROVAL. (JAR) 145 IS IN PROCESS.
TO BRISBANE (767-300/777-200).
10TH A320 DELIVERY.
NOVEMBER 1997: HONG KONG TO KUALA LUMPUR (757).
DECEMBER 1997: 1ST CHARTER FLIGHT TO FUKUOKA, JAPAN (A320).
APPLIED TO INCREASE (ETOPS) APPROVAL FROM 120 TO 180 MINUTES FOR 777'S.
BESIDES GUANGZHOU, CHINA SOUTHERN (GUN) HAS HUBS IN WUHAN, HUBEI; HAIKOU, HAINAN; CHANGSA, HUNAN; ZHENGZHOU, HENAN, AND SHENZHEN. ONLY 71 OF ITS 317 ROUTES ARE FROM GUANGZHOU, ALTHOUGH HAS 50% OF ALL TRAFFIC.
(GUN) OWNS 60% OF 5 SUBSIDIARY AIRLINES: FUJIAN AIRLINES, FUZHOU, FUJIAN PROVINCE; GUANGXI AIRLINES (GUX), GUILIN, GUANGXI; SHANTOU AIRLINES (SHT), SHANTOU, GUANGDONG; XIAMEN AIRLINES (XIA), XIAMEN, FUJIAN; AND ZHUHAI AIRLINES (ZHU), ZHUHAI, GUANGDONG.
1996 = +8.8% RPK (TRAFFIC): +8.2% DOMESTIC, +19.3% INTERNATIONAL.
JANUARY 1998: 2 777-200'S (IDG) (WB122; WB123) DELIVERIES.
6 777'S FLYING 26 NORTH PACIFIC 120 MINUTES (ETOPS) FLIGHTS/MONTH.
FEBRUARY 1998: CODE SHARE WITH JAPAN AIR SYSTEM (JAS) OSAKA KANSAI TO GUANGZHOU.
757'S (NA392 & NA393) TO BE RETURNED TO LESSOR IN 7 & 8/98. 8TH 777-200 (IDG) (WB124) DELIVERY. (CASC) ALLOCATES +3 777-200 (IDG)'S (PW4077) TO (GUN).
MARCH 1998: LAUNCHES GUANGZHOU TO HONG KONG TO KUALA LUMPUR.
APRIL 1998: 1997 = +$137 MILLION (+57%): 17.8 BILLION RPK (TRAFFIC) (+6.4%), +15% ASK (CAPACITY), 15.24 MILLION PASSENGERS (PAX). INTERNATIONAL 1.71 BILLION RPK (+50.5%). 273 ROUTES WITHIN CHINA: 27.1% MARKET SHARE. DOMESTIC 14.2 BILLION RPK (+.9%). 7,820 EMPLOYEES.
MAY 1998: TO ACQUIRE 60% OF GUIZHOU AIRLINES (GIZ) LOCATED IN CITY OF GUIYANG, WHO CURRENTLY HAS 6 XIAN MADE YUNSHU-7 Y-7 AIRPLANES. CHINA SOUTHERN (GUN) WILL PROVIDE 3 737-300'S.
(GAMECO)'S KEN RUSSELL, DIRECTOR OF QUALITY ASSURANCE RETIRES AND IS REPLACED BY FLOYD GERING WHO IS ALSO DIRECTOR PROPULSION CENTER. (GAMECO) RECEIVES (JAR)-145 APPROVAL.
TO RETURN 767-300ER (VN062) TO LESSOR TOMBO AVIATION (TOM) AND ONTO CANADIAN INTERNATIONAL (CDI).
JUNE 1998: (CAAC) REQUIRES OPERATORS TO HAVE 75% LF (LOAD FACTOR) BEFORE ALLOWING ANY ADDING OF FREQUENCIES ON DOMESTIC ROUTES. ON INTERNATIONAL ROUTES, OTHER COMPETING CARRIERS ARE ONLY ALLOWED, PROVIDED THEY HAVE 100K PASSENGERS/YEAR, AND 68 TO 80% LF, WITH <4 WEEKLY FLIGHTS.
JULY 1998: PLANS TO CUT 3,300 TEMPORARY WORKFORCE >10%. TOTAL WORKFORCE IS 16,000 EMPLOYEES.
CAPTAIN YU YAN EN, CHAIRMAN. YAM ZHI QING, PRESIDENT.
SERVICE WUHAN - FUKUOKA, JAPAN (737-300).
DELIVERED 1 737-31B TO NEW SUBSIDIARY GUIZHOU AIRLINES (GIZ) (25895, /93 12 09). PLANS TO SELL 2 757'S AND LEASE BACK. RETURNS 757-200 (NA392) TO BABCOCK & BROWN (BBB). WILL RETURN 2 767-300ER'S (VL701, 2) TO (ILFC) (ILF) IN 10 & 11/98. MAY WET-LEASE 2 777-200'S (IGW) TO VASP (VSP).
1997 TOP WORLD AIRLINES COMPARISONS:
EMPLOYEES (K): 20 ACN 22; 21 TII 22; 22 PIA 21; 23 AIN 19; 24 ALI 19; 25 VAR 18; 26 JAL 17; 27 KAL 17; 28 ANS 17; 29 SWS 17; 30 GUN 16; 31 MAS 15.8.
NET ($MILLION): 17 CINTRA 244 (273); 18 SWS 223 (343); 19 CAT 219 (493); 20 QAN 198 (186); 21 GUN 137 (87); 22 ASA 127 (75).
PASSENGERS (PAX) (MILLION): 14 TWA 24; 15 SAS 21; 16 QAN 19; 17 AMW 18; 18 JAS 17; 19 IBE 15.4; 20 GUN 15.2; 21 TII 15.0; 22 KLM 14.5.
REGIONAL 1997 COMPARISONS TRAFFIC (RPK) (BILLION):
1 JAL 79 (+2%); 2 QAN 59 (+8.4%); 3 SIA 55 (-.1%); 4 ANA 52 (+8.5%); 5 KAL 40 (+5.2%); 6 CAT 39 (-3%); 7 TII 31 (+7.1%); 8 MAS 29 (+2.8%);
9 ANZ 18 (+6.4%); 10 GUN 18 (+6.4%); 11 CEA 10 (+16.4%).
(ETOPS) 120 MINUTES FLIGHTS/MONTH (TOTAL): 9 777'S = 25 (296) PACIFIC.
AUGUST 1998: 2 A320-232 (849; 859) DELIVERIES.
SEPTEMBER 1998: CURRENTLY OPERATES 2,578 FLIGHTS/WEEK WITH 81 BOEING & 10 AIRBUS AIRPLANES.
777 SERVICE NONSTOP TO LOS ANGELES (LAX), TO HAVE 18F, 60 INS "PREMIUM BUSINESS," 67C @ 40 INS "PREMIUM ECONOMY."
BY END OF 1998 WILL TAKE DELIVERY OF 2 737-700'S & 5 A320'S. 2 757-200ER'S (24118; 24119) RETURNED TO BABCOCK (BBB), LEASED TO ROYAL AIRLINES (ROY). PLANS TO LET 2 757'S LEASES EXPIRE AND TERMINATE EARLY LEASES ON 2 767-300'S, ALL USED ON DOMESTIC ROUTES. 2 767-300ER'S (25170; 26259) RETURNED TO (ILF) LEASED TO ALITALIA (ALI).
OCTOBER 1998: 9 777 120 MINUTES (ETOPS) FLIGHTS/MONTH (TOTAL FLIGHTS) OVER PACIFIC = 25 (375).
A320-232 (881; 895) DELIVERIES.
NOVEMBER 1998: (GAMECO) (MOU) WITH (MTU) PROPOSAL FOR JOINT ENGINE OVERHAUL VENTURE TO SUPPORT CHINA SOUTHERN (GUN)'S INTERNATIONAL AERO (V2500) TURBOFANS, (CFM56)'S & (RR) (RB211)'S.
POSSIBLE ALLIANCE WITH DELTA AIRLINES (DAL).
757-200 RETURNED, LEASED TO ROYAL (ROY). A320-232 (900) DELIVERY.
DECEMBER 1998: NEW FREQUENT FLYER PROGRAM CALLED "SKY PEARL CLUB."
YUAN XIN, (GAMECO) DEPUTY GENERAL MANAGER REPLACES CHEN REN DE WHO RETIRED. DONG SU GUANG, VICE GENERAL MANAGER PLANNING & AIRWORTHINESS.
(GAMECO) PLANS TO BUILD A NEW 3-BAY WIDE BODY HANGAR AT BAIYUN INTERNATIONAL AIRPORT, GUANGZHOU AND LAND HAS BEEN ALLOCATED FOR +2 SIMILAR HANGARS IN NEAR FUTURE. ALSO, PLANS A 2-BAY 737/757 HANGAR, AND PAINT HANGAR AT WUHAN. PROPOSAL FOR AN AIRPLANE MAINTENANCE TRAINING SCHOOL.
JANUARY 1999: 1998 = 15.05 MILLION PASSENGERS, HIGHEST IN CHINA, FOR 20TH CONSECUTIVE YEAR (27% OF ALL PASSENGERS CARRIED BY CHINESE OPERATORS). ALSO, LEADS IN TOTAL NUMBER OF AIRPLANES (96), FLIGHTS OPERATED AND MARKETS SERVED.
76% LOAD FACTOR (LF) ON ROUTE TO LOS ANGELES (LAX) LAST MONTH (777). CODE SHARE WITH DELTA AIRLINES (DAL) TO (LAX).
CONTRACT WITH (IBM) FOR TECHNICAL DATA MANAGEMENT SYSTEM (TDMS).
PLANS TO RECEIVE +5 A320'S IN 1999.
FEBRUARY 1999: WORKING WITH AIRBUS TO CONFIGURE AND GAIN (ETOPS) APPROVAL FOR A320'S. 16TH A320 DELIVERY.
MARCH 1999: 2 777-200'S (WA117; WA119) WET-LEASED TO BIMAN BANGLADESH (BNG) FOR HADJ UNTIL END OF 4/99. 17TH A320 DELIVERY.
APRIL 1999: 13,000 EMPLOYEES. (http://www.cs-air.com).
1998 = -$65.7 MILLION (+$138 MILLION). 2/3 OF LOSS, DUE TO FOREIGN EXCHANGE LOSSES. IS THE ONLY CHINESE AIRLINE LISTED ON THE NEW YORK STOCK EXCHANGE. +21.4% MAINTENANCE COSTS. +2.5% RPK, +10.6% ASK, 60.6% LF (-4.7). INTERNATIONAL 52.4% LF (-2.7); HONG KONG REGIONAL 58.1% (-4.4); DOMESTIC -6% RPK (TRAFFIC), +1.1% ASK (CAPACITY), 62.5% LF (LOAD FACTOR) (-5.6).
COST SAVING STEPS, INCLUDING TERMINATION OF LEASES ON 2 757-200'S AND 3 767-300'S, BUT DELIVERIES CONTINUE OF 4 737-700'S, 3 777-200'S, AND 5 A320'S.
MAY 1999: MALAYSIAN CIVIL AVIATION APPROVES (GAMECO) MAINTENANCE & TRANSMILE (TML) SENDS 737-200 FOR "C" CHECK.
1998 FISCAL YEAR (FY) = -$65.7 MILLION.
NEW YORK INVESTOR GOLDMAN SACHS TAKES 5% (GUN).
2 A320'S LEASED TO AIR EUROPE (ARE) FOR 10 MONTHS. A320-214 (1005), (GECAS) (GEH) LEASED.
JUNE 1999: PLANS TO WET-LEASE 1 777-200 TO CATHAY PACIFIC (CAT) FOR CHARTER OPERATIONS.
INCDT: 737-3YO (2087-24918, /91 19 15, B-2525) DAMAGED BEYOND REPAIR WRITTEN OFF (W/O) ON LANDING AT ZHANGJIANG.
JULY 1999: PRELIMINARY DISCUSSIONS OF POSSIBLE MERGER OR PARTNERSHIP WITH AIR CHINA (BEJ).
(GUN) AND ITS SUBSIDIARIES: FUJIAN, GUANGXI, SHANTOU, XIAMEN AND ZHUHAI (COMBINED FOR 28.6% OF /97 (GUN) REVENUE). OPERATES TO 67 CHINESE CITIES.
AUGUST 1999: CIVIL AVIATION ADMINISTRATION CHINA (CAAC) APPROVES MERGER WITH AIR CHINA (BEJ) FOR LARGEST AIRLINE IN ASIA/PACIFIC REGION WITH 154 AIRPLANES, INCLUDING 46 WIDE BODIES, > QANTAS (QAN) 146, AND ALL NIPPON (ANA) 143. IN 1998, CHINA SOUTHERN (GUN) LOST -$66 MILLION AND AIR CHINA (BEJ) LOST -$100 MILLION. (GUN) MANAGEMENT IS ACKNOWLEDGED TO BE BETTER AND IS EXPECTED TO LEAD MERGED AIRLINES.
RUMORS ALSO OF MERGER OF CHINA EASTERN (CEA) WITH CHINA NORTHERN (SHY) AND CHINA NORTHWEST (CNW) AS WELL AS CHINA SOUTHWEST (XIN) WITH YUNNAN (YUN) AND SICHUAN (SIC).
SERVICE TO PHNOM PENH (737-500).
20TH AND LAST A320 DELIVERY.
SEPTEMBER 1999: 2 777-200'S LEASED TO BANGLADESH BIMAN AIRLINES (BNG).
OCTOBER 1999: 10 YEAR ANNIVERSARY OF (GAMECO)! EXPANDING TO NEW FACILITY AT WUHAN.
TOTAL 120 MINUTES NORTH PACIFIC (ETOPS) FLIGHTS (FLIGHTS/MONTH): 9 777'S = 687 (26).
DECEMBER 1999: CHINA SOUTHWEST CHONGQING (CHO) HEAVY MAINTENANCE END-OF-LEASE CONTRACT, FOR 6 737-300'S, & "C" CHECK CONTRACTS FOR (HNA) 1 737-300 & 1 737-400, AND ZHEJIANG (ZHE) 2 A320'S TO (GAMECO). 1ST A321 "C" CHECK FOR SICHUAN (SIC).
JANUARY 2000: 38TH INTERNATIONAL ROUTE, GUILIN TO SEOUL STARTED.
11 737-3YO'S (26068), EX-YUNNAN (YUN), BABCOCK & BROWN (BBB) LEASED, ASSIGNED TO SHANTOU BRANCH. 747-200F (CF6-50), ATLAS (TLS) WET-LEASED FOR 1 YEAR FOR SERVICE TO CHICAGO (ORD).
FEBRUARY 2000: IN 3/00, WILL USE (TLS) 747-200F WET-LEASED FOR SHENZHEN TO CHICAGO.
(GAMECO)'S 1ST 737NG MAINTENANCE CONTRACT WITH "C" CHECK FOR SHENZHEN (SHZ) 737-700, IN 3/00.
FOR 2ND YEAR, (GUN) WET-LEASES 2 777-200'S TO BANGLADESH BIMAN (BNG) FOR 7 WEEK HADJ UNTIL END OF 4/00.
MARCH 2000: 1999 = +$9.96 MILLION (-$62.2 MILLION): 16.66B RPK, 655.81 MILLION FTK, 14.50 MILLION PAX.
(CAAC) SAYS CHINA SOUTHERN (GUN) WILL NOT NOW BE FORCED TO MERGE WITH AIR CHINA (BEJ).
DEPARTMENT OF TRANSPORT (DOT) OK'S CARGO SERVICE, SHENZHEN TO ANCHORAGE AND CHICAGO (747-200, (TLS) WET-LEASED, 3X-WEEKLY).
NEW WEBSITE (http://www.cs-air.com), CHINESE-ONLY STARTS INTRA-CHINA E-TICKETING TO 3 CITIES (1ST IN CHINA): GUANGZHOU, BEIJING AND CHANGSHA. CURRENTLY, THERE ARE 12 MILLION INTERNET USERS IN CHINA, WHICH IS EXPECTED TO MUSHROOM TO 100 MILLION BY 2010.
APRIL 2000: INVESTS $418.5 MILLION TO CONSTRUCT ENGINE AND AIRPLANE MAINTENANCE SHOP CATERING AND CARGO FACILITIES AT ITS HQ AT NEW GUANGZHOU, BAIYUN INTERNATIONAL AIRPORT TO BE COMPLETED BY THE END OF 2003.
(GAMECO) TO DO ITS 1ST "C" CHECK, ON AN A321 OF SICHUAN (SIC). ALSO END-OF-LEASE CHECKS ON 7 CHINA SOUTHWEST (XIN) 737'S, "C" CHECKS ON HAINAN (HNA) 2 737'S, & "C" CHECKS ON 2 A320 OF (CNAC) (CAC).
SERVES 273 DOMESTIC AND 55 REGIONAL & INTERNATIONAL DESTINATIONS.
1 747-400F, ATLAS (TLS) WET-LEASED TO REPLACE 747-200F FOR CARGO OPERATIONS SHENZHEN TO CHICAGO (ORD). SELLS AND LEASES BACK 4 757-200'S, PEGASUS (PSS) LEASED.
MAY 2000: 1999 = DOMESTIC MARKET 25% PAX, 23% CARGO; +2.3% RPK, +4.6% FTK.
(CAAC) ANNOUNCES THAT ALL DOMESTIC AIRLINES WILL HAVE TO HAND OVER 80% OF THEIR TICKET SALES, REVENUE FROM 108 KEY ROUTES FOR REDISTRIBUTION BY A SPECIAL AIRLINES COMMITTEE UNDER (CAAC).
HONG KONG TO WUHAN, CAPITAL OF HUBEI PROVINCE, 567 MILES FLIGHT (737-300, DAILY).
2 757-200'S, WET-LEASED TO ANGEL (ANE).
JUNE 2000: $180 MILLION INVESTMENT BY (GUN) IN JOINT VENTURE, WITH (MTU) MUNICH TO ESTABLISH (MTU) MAINTENANCE ZHUHAI FOR ENGINE OVERHAUL, MAINLY (V2500) FOR ASIAN OPERATORS STARTING IN 2002 TO HANDLE 150 ENGINES/YEAR, BY 2006.
CHINA SOUTHERN (GUN) USES (http://www.et-china.com), CHINA'S NUMBER 1 E-COMMERCE TRAVEL WEBSITE.
GOVERNMENT OK'S SALE OF <49% STOCK TO FOREIGN INVESTORS.
1 737-300 (1815, PP510), TOMBO (TOM) LEASED.
JULY 2000: CODE SHARE WITH VIETNAM AIRLINES (VIE) TO HO CHI MINH CITY (3/WEEK). IN 12/00, TO SYDNEY (777, 2X-WEEKLY, 1 NONSTOP, 1 VIA MELBOURNE.
1999 = +$9.95 MILLION (-$65.7 MILLION): 18.69 BILLION RPK (+2.3%) 58.7% LF; 616 MILLION FTK (+10.4%); 15.11 MILLION PAX (+.4%); 15,902 EMPLOYEES.
CARGO WEBSITES (ONLY ONLINE AIRLINE CARGO SERVICE IN CHINA) IN ENGLISH & CHINESE, LAUNCHED A YEAR AGO ARE NOW GENERATING $6 MILLION/MONTH CARGO SALES. ANNIVERSARY OF 3RD YEAR FLIGHTS TO USA.
(GAMECO) CONDUCTED "C" CHECKS ON AIRPLANES OF AIR GREAT WALL (GWA), HAINAN AIRLINES (HNA), WUHAN AIRLINES (WUH), ZHONGYUAN AIRLINES (ZHO) & "D" CHECK ON CHINA SOUTHWEST (XIN).
AUGUST 2000: (CAAC) OK'S MERGER WITH ZHONGYUAN AIRLINES (ZHO). WILL TAKE APPROXIMATELY 6 MONTHS FOR MERGER.
CHINA SOUTHERN (GUN) JOINT VENTURE WITH AN AUSTRALIAN E-COMMERCE INVESTMENT COMPANY IN NEW et-china.com, AND JUST ENTERED INTO A STRATEGIC ALLIANCE WITH JITONG COMMUNICATIONS, CHINA'S 4TH LARGEST TELEPHONE COMPANY TO DEVELOP E-COMMERCE IN THE MAINLAND.
et-china.com SIGNS AGREEMENT WITH GUANGDONG MOBILE TO BECOME 1ST CHINESE TRAVEL SITE TO OFFER WIRELESS, REAL-TIME, AIRLINE TICKET ENQUIRIES AND FLIGHT INFO FOR BAIYUN INTERNATIONAL AIRPORT, GUANGZHOU.
(GUN) 777 180 MINUTES (ETOPS) APPROVAL RECEIVED.
CODE SHARE WITH ASIANA (AAR) FOR GUILIN TO SEOUL (4X-WEEKLY).
PLANS 25,000 SQ M, CARGO CENTER AT SHENZHEN INTERNATIONAL AIRPORT TO BE COMPLETED BY 2001.
WILL SWITCH FROM WET-LEASE ATLAS (TLS) 747-400F'S TO OWN AIRPLANES. EXPECTS TO ACQUIRE 3 747-400F'S IN NEXT 2 YEARS.
4 737-37K, (ZHO) WET-LEASED AT $2.42 MILLION/MONTH.
SEPTEMBER 2000: WESTBOUND CHICAGO TO SHENZHEN, FREIGHTER ROUTE WILL STOP AT SHANGHAI (PUDONG) ON ITS WAY. SHENZHEN TO CHICAGO 747-400F HAS HAD NEAR 100% LF (LOAD FACTOR) SINCE 4/00.
CODE SHARE WITH JAPAN AIR SYSTEM (JAS) TO OSAKA. IN 12/00 TO SYDNEY AND MELBOURNE (777-200, 3X-WEEKLY).
(CAAC) OK'S (GUN)'S NEW, TECHNICAL DOCUMENT, MANAGEMENT SYSTEM (TDMS), WHICH CORRECTS INADEQUACY OF TECHNICAL DATA DUE TO MANUAL PROCESSING AND TRANSLATION. "PRINT IS DEAD" IN NEW SYSTEM, JOINTLY DEVELOPED WITH (IBM), WHICH COST $2.7 MILLION AND IS FOCUSED ON ENGINEERING AND MAINTENANCE DIVISION.
OCTOBER 2000: IN 1 MONTH SINCE MERGER WITH ZHONGYUAN (ZHO), CHINA MARKET SHARE HAS GROWN FROM 60% TO 65.6% AND INCREASED ITS CARGO, LUGGAGE AND MAIL TRANSPORTATION BY +33%.
URGES ITS AFFILIATED AIRLINES: GUIZHOU (GIZ), SHANTOU (SHT), XIAMEN (XIA), AND ZHUHAI (ZHU) TO APPLY CHINA SOUTHERN (GUN) LOGO AND COLORS TO THEIR AIRPLANE FLEETS. ALL 4 AIRLINES' MANAGEMENT WILL SOON BE CENTRALIZED BY (GUN).
(GAMECO) RECEIVES "3C" CHECK CONTRACT FROM AIR MACAU (MCU) FOR 1 A321.
STARTS GUANGZHOU TO HONG KONG TO SINGAPORE, AND GUANGZHOU TO BANGKOK TO KUALA LUMPUR (3X-WEEKLY).
1ST 6 MONTHS TOP WORLD AIRLINES TRAFFIC RPK (BILLION):
15 AMW 15.02; 16 VAR 12.59; 17 SAS 11.16; 18 GUN 10.79; 19 AAT 9.47
20 ASA 9.43; 21 SAB 9.27; 22 BEJ 8.26; 23 FIN 7.35.
NOVEMBER 2000: 16,886 EMPLOYEES (INCLUDING 1,509 FLIGHT CREW (FC), 2,119 CABIN ATTENDANTS (CA), AND 3,380 MAINTENANCE TECHNICIANS (MT) (+6.2%).
WANG CHANG SHUN, PRESIDENT, 43 YEARS REPLACES YAN ZHI QING, NOW PRESIDENT, CHINA SOUTHERN AIRLINES GROUP.
DECEMBER 2000: TAKES STEPS TO ACQUIRE CHINA NORTHERN (SHY) AND CHINA XINJIANG (XIJ).
STARTS GUANGZHOU BAIYUN INTERNATIONAL TO MELBOURNE AND CONTINUING SERVICE TO SYDNEY ("AN AIR BRIDGE BETWEEN THE 2 COUNTRIES, UPON WHICH TO BUILD ECONOMIC, TRADE, AND CULTURAL EXCHANGES.)"
HU YUN QI, VP MAINTENANCE AND ENGINEERING RETIRES BUT REMAINS CHAIRMAN, (GAMECO).
FEBRUARY 2001: UPGRADES ITS USER-FRIENDLY INTERNET PLATFORMS IN CHINESE: (http://www.cs-air.com), AND ITS NEW ENGLISH SITE AT:
OUTBOARD LOADS TO AUSTRALIA = 65% IN 01/01, +16% OVER 12/00.
MARCH 2001: 1ST CHINESE DOMESTIC CODE SHARE WITH YUNNAN (YUN) TO KUNMING.
APRIL 2001: 2000 = +$60.6 MILLION, DUE TO ECONOMIC RECOVERY IN ASIA AND CHINA: 16.8 MILLION PASSENGERS (+11%).
HUBS AT ZHENGZHOU, CHANGSA, HAIKOU, GUIYANG, GUILIN, SHANTOU, SHENZHEN, WUHAN, XIAMEN AND ZHUHAI.
(GAMECO) PLANS ACQUISITION OF CHENGDU SOUTHWEST AIRCRAFT MAINTENANCE CO (CSAMC), SICHUAN PROVINCE. WITH COMPLETION OF NEW GUANGZHOU BAIYUN INTERNATIONAL AIRPORT IN 2003, (GAMECO) WILL MAKE THE BIG SHIFT TO ITS NEW $100 MILLION FACILITY, INCLUDING 3 MAINTENANCE HANGARS AND A DEDICATED BAY FOR STRIPPING AND PAINTING.
CODE SHARE WITH CHINA NORTHERN (SHY) TO SHENYANG.
CHINA SOUTHERN (GUN) VOTED "BEST AIRLINE IN THE PEOPLE'S REPUBLIC OF CHINA" BY SKYTRAX RESEARCH. INTRODUCES NEW FLIGHT CREW (FC) AND CABIN ATTENDANT (CA) CREW UNIFORMS.
MAY 2001: 2 ORDERS (6/02) 747-400F'S.
JUNE 2001: (GAMECO) HAS 2,300 MAINTENANCE TECHNICIANS (MT) EMPLOYEES. 2 HANGARS WITH 1 WIDE BODY BAY AND 4 NARROW BODY BAYS. 12,712 SQ M FACILITIES. "B," "C," & "D" CHECKS FOR 737, 757, 767, 777, A320 & A321'S.
JULY 2001: CODE SHARE WITH (KLM) FROM BEIJING AND SHANGHAI TO AMSTERDAM.
MULTI-MILLION-DOLLAR AGREEMENT WITH (IBM) FOR TECHNICAL DOCUMENT MANAGEMENT SYSTEM (TDMS) TO MAKE ALL CHINA SOUTHERN (GUN)'S, AIRPLANE MAINTENANCE DOCUMENTATION ELECTRONIC AND "PAPERLESS," TO BRING (GUN) UP TO THE SAME ELECTRONIC STANDARD AS ALL OTHER MAJOR WORLD AIRLINES.
COMPLETES 777 POLAR VALIDATION FLIGHT FROM NEW YORK (JFK) TO BEIJING.
20/10 ORDERS EMBRAER ERJ-145.
AUGUST 2001: TO FUKUOKA, JAPAN (WEEKLY).
PLANS TO ACQUIRE 20 737-800'S & 2 747-400F'S.
OCTOBER 2001: CODE SHARE WITH JAPAN AIR SYSTEM (JAS) TO TOKYO.
20 ORDERS (2/02) 737-800'S.
NOVEMBER 2001: NOW FLYING TO >80 CITIES AROUND THE GLOBE, HAS E-TICKET, AIRPORT CHECK-IN COUNTERS IN BEIJING, WUHAN, SHANGHAI AND GUANGZHOU. CONSEQUENTLY, ITS E-TICKETING PROGRAM HAS GENERATED SUBSTANTIAL SALES, SINCE IT WAS STARTED 1 YEAR AGO: 4TH Q GENERATED $24.1 MILLION IN REVENUES. GROWING FROM $12,000 IN INITIAL MONTH TO $3.6 MILLION IN 9/01, CURRENT DAILY SALES TOP OUT AT >$362,000.
CHINE SOUTHERN (GUN) STATED IT WILL "CONTINUOUSLY ENHANCE HIGH TECHNOLOGY IN ITS MARKETING TO FURTHER STRENGTHEN ITS SERVICE QUALITY FOR OPTIMAL ECONOMIC RESULTS."
TO LAOAG CITY (ILOCOS NORTE, PHILIPPINES) (3X-WEEKLY).
STARTS CONSTRUCTION OF 4-BAY, HANGAR ($100 MILLION) TO CATER FOR 7 AIRPLANES SIMULTANEOUSLY TO OPEN IN 10/03 AT NEW BAIYUN INTERNATIONAL AIRPORT.
DECEMBER 2001: CODE SHARE WITH GARUDA INDONESIA (GIA) TO JAKARTA (2X-WEEKLY).
JANUARY 2002: 2001 = 22.77 BILLION RPK (TRAFFIC); 747.62 MILLION FTK (FREIGHT TRAFFIC); 18.83 MILLION PASSENGERS (PAX).
FEBRUARY 2002: GOVERNMENT FINALLY OK'S CONSOLIDATION OF CHINA'S AVIATION WITH MERGER OF 9 (CAAC) CONTROLLED OPERATORS INTO 3 GROUPS, UNDER CHINA SOUTHERN (GUN), AIR CHINA (BEJ) AND CHINA EASTERN (CEA), WHO HAVE 80% OF DOMESTIC MARKET: (GUN), INCLUDING CHINA NORTHERN (SHY) & XINJIANG, TO FORM THE LARGEST FLEET OF 180 AIRPLANES, #50.1 BILLION YUAN ($6.05 BILLION) ASSETS, AND >34,000 EMPLOYEES; (BEJ), INCLUDING CHINA SOUTHWEST (XIN) & CHINA NATIONAL WITH 118 AIRPLANES, #56.05 BILLION ASSETS, & >20,300 EMPLOYEES; & (CEA), INCLUDING CHINA NORTHWEST (CNW) & YUNNAN (YUN) WITH 118 AIRPLANES, #47.3 BILLION ASSETS, 118 AIRPLANES & >25,000 EMPLOYEES.
IN 4/02, TO TOKYO NARITA (777, DAILY) AFTER NARITA 2ND RUNWAY OPENS. ALSO TO OSAKA (DAILY).
(GAMECO) COMPLETES 1ST "4C/5Y" STRUCTURES CHECK ON A320. OPENS 9,689 SQ M HANGAR AT XINZHENG INTERNATIONAL AIRPORT, ZHENGZHOU, HENAN PROVINCE, FOR USE BY (GAMECO); HANGAR CAN HANDLE 3 737'S AT SAME TIME.
MARCH 2002: HAS IMPLEMENTED REQUIREMENTS OF THE (ISO) 9001 INTERNATIONAL QUALITY MANAGEMENT SYSTEM.
APRIL 2002: 15,837 EMPLOYEES (INCLUDING 1,509 FC; 2,119 CA; & 1,944 MT).
GUANGZHOU AIRCRAFT MAINTENANCE ENGINEERING COMPANY (GAMECO) HAS 25% STAKE, WHICH WAS HELD BY LOCKHEED MARTIN AERONAUTICS SERVICE INTERNATIONAL, AND ACQUIRED BY SINGAPORE (SIA) ENGINEERING COMPANY.
TO SYDNEY, MELBOURNE (3X-WEEKLY).
2001 TOP WORLD AIRLINES (PAX TRAFFIC - BILLION (RPK):
18 KAL 37.95; 19 ALI 36.52; 20 AMW 30.69; 21 VAR 26.01; 22 CHI 25.06; 23 SAS 23.30; 24 EAD 23.13; 25 GUN 22.77.
JUNE 2002: Visit by Alan Mullaly, President, Boeing Commercial Airplanes.
(GUN) acquires 49% of China Postal Airlines, Shanghai (operates 6 Y-8F's) for $18 Million. Has separated its Passenger and Cargo divisions.
1st 747-41BF (32803, B-2473) delivery. To be used for Shenzhen to Chicago (ORD) to Shanghai to Shenzhen route. 2nd 747-400F to be delivered in 9/02 to be used for european and middle eastern routes. Will return current wet-leased 747F's.
July 2002: China Southern (GUN) is expected to take a 39% stake in Sichuan Airlines (SIC) for <150 Million Yuan (US$1=CNY8.28). The deal would strengthen (GUN)'s presence in the strategically important, western provinces, complementing its strong base in China's southern region.
2001 = +$41.03 Million (+$60.58 Million): 25.06 Billion (RPK); 62.5% LF; 19.12 Million PAX (+13.5%); 993.78 Million (FTK); 15,827 employees (+23.7%).
August 2002: Bob Watson, General Manager (GAMECO) replaced Dean Lange, who retired.
Guangzhou (Baiyun International Airport) to Dali, Lijiang and Xi'shuangbanna in Yunnan Province.
Air China (BEJ) applies to (CAAC) to start China's 3rd all-freight airline by end of 2002. The as-yet unnamed carrier, is to begin operations with (BEJ)'s existing 747-200F's and acquire 2 additional airplanes next year. A booming domestic freight market and opportunities abroad, prompted (BEJ) to challenge the existing all-freight carriers, China Cargo Airlines (60% owned by Shanghai-based (CEA)) and China Postal Airlines (49% owned by (GUN)). (BEJ) will own 60% of the new carrier, with the rest of the stock split between Beijing Capital International Airport and Citic Pacific, the Hong Kong representative of China's largest foreign investment firm.
2 737-81B's (32921, B-32693; 32922) deliveries.
September 2002: 2nd 747-41BF (32804, B-2461) delivery, which will be used on the (LAX), Shanghai and Shenzhen triangle route.
October 2002: (CAAC) announces the formation of 6 aviation groups: Air China Group (China National Aviation Holding Company); China Eastern; China Southern; China Aviation Oil Group; China Aviation Information Group; and China Aviation Equipment Group. These groups will operate independently. The (CAAC) no longer owns the state-owned assets of these groups and will not take responsibility for their operating losses. The (CAAC) cuts its economic ties with these companies and retreats to functioning only as an industry regulator. The assets of the 3 consolidated airline groups comprise 80% of the industry's total assets. Their strength and ability to compete internationally has been significantly enhanced through this restructuring.
China Southern (GUN)'s 737 maintenance, repair & overhaul (MRO) operations is moving from (GAMECO) to a dedicated engineering facility at Xinzheng Airport in Zhenzhou, a city in Henan Province in north China. 18 737 "C" checks will be moved to this new base by the end of 2003. Joe Lo, Director of Business Development stated "The Henan facility provides (GAMECO) with more hangar space for 3rd party work."
(GUN) Cargo, code share with (TNT) Airways (TNB), Shenzhen to Shanghai to Liege (weekly), by 747-400F Atlas (TLS) wet-leased.
2 737-81B's (1213-32923, B-2695; 1230-32924) deliveries. 1 order (2004-03) 777-200ER (GE-90), (ILF) leased, and 4 orders (2003-05) A319's (V2524-A5), (ILF) leased. 1 747-47UF (29253), Atlas (TLS) wet-leased.
November 2002: Baiyun International Airport, Guangzhou is 60% complete and remains on schedule for opening in 10/03.
(GAMECO) has a maintenance contract with Zhejiang (ZHE) to provide "4C"/"5Y" checks on 2 A320's.
Hutchison Whompoa now has 50% stake in (GAMECO) (previously only 25%), taking over the 25% shares owned by Lockheed. Hutchison also owns 8% of (GUN). (GAMECO) is now referred to as "GAMECOCK." Immediate management changes include: Thomas Tsiang, General Manager; John Tracci, Director Maintenance & Engineering; William Shen, Director Quality Assurance/Quality Control; & Zhou Bao Ping, Director Spares, ex-Cathay (CAT).
4th 737-81B (32924, B-2696) delivery. 3rd 747-400F in 2002, wet-leased from Atlas (TLS) for shipments Shenzhen and Shanghai to Liege, Belgium.
December 2002: Projects it will have carried 21.3 Million passengers in 2002.
In 2003-01, Zhengzhou to Seoul (2x-weekly).
(MTU) Maintenance, Zhuhai, a 50-50 venture between China Southern (GUN) and (MTU) Aero Engines, completed its $189 Million maintenance complex, heralding launch of operations this month.
1 737-81B (32925, B-2697) delivery.
January 2003: Joint venture with Et-China (49%) for new e-business (http://www.et-china.com)
6th 737-81B (32926, B-5020) delivery.
February 2003: $23 Million for 23 Performance Improvement Program upgrade kits for the (GE90)'s powering its 777's.
737-81B (32927, B-5021) delivery.
March 2003: Code share with Shandong Airlines (SHG) on 15 domestic routes from Beijing, Guangzhou, Jinan, Qingdao, and Shanghai. Expands code share with (KLM), Amsterdam - Beijing.
2002 = +YUAN 575.8 Million/+$69.6 Million (+69%) (+Y 340.2 Million/+$41.09 Million): 28.94 Billion (RPK) (+15.5%); 21.49 Million PAX (+12.4%); 1.01 Billion (FTK) (+28.6%). Flight Operations expenses which account for 42.1% of total operating expenses, decreased 2.5%, mainly due to a drop in fuel costs and operating lease rentals.
April 2003: (GAMECO) signed a maintenance contract with Air China Zhejiang Airlines (ZHE) to perform "4C"/"5Y" checks for 3 A320's starting in 2003-09.
Cooperative marketing agreement with Sichuan Airlines (SIC) to unify their varied classes of service for the upcoming summer and fall travel seasons, and exchange of frequent-flier miles.
Guangzhou - Lhasa (757, 2/week).
May 2003: 737-81B (32928, B-5022) delivery & A319-132 (1971, B-6018), (ILF) leased.
June 2003: China Southern (GUN) suffered a -85% drop in passenger numbers in 2003-05, due to the devastating effect of the Severe Acute Respiratory Syndrome (SARS) virus epidemic that broke out in China last November.
A319-132 (1986, B-6019) (ILF) leased.
July 2003: 13,000 employees.
Started Guangzhou - Shangri-la, - Lhasa (3/week). In 10/03, (KLM) code share services with China Southern (GUN) from Amsterdam to Beijing and Shanghai, will be extended to Guangzhou, Shenzen, Wuhan, Changsa, and Guilin. Changsa to Seoul (2/week).
August 2003: +6 orders (2004-02) 747-400F's.
1st 6 months = -1.23 Billion Yuan/-$149 Million (+123.2 Million Y), severely impacted by the (SARS) outbreak.
2 737-800's & 1 A319 delivery.
September 2003: Beijing - Urumqi - Dubai (weekly). In 12/03, code share with Japan Air Lines (JAL) Group, Osaka - Guangzhou (5/week), Tokyo - Beijing (2/day), Tokyo - Shanghai (3/week), and Osaka - Shenyang (3/week).
Next month, new joint long-haul 747F service with (KLM) Cargo between Shanghai Pudong and Amsterdam Schiphol.
2002 = +$69.6 Million (+$41.1 Million): 28.94 Billion (RPK) (+15.5%); +10.4% (ASK); 65.4% LF (+2.9); 21.5 Million PAX (+12.4%); 1.03 Billion (FTK) (+28.9%); 17,031 employees (+4.1%).
2002 TOP WORLD AIRLINES TRAFFIC RPK (Billion):
20 (IBE) 40.47; 21 (MAS) 37.65; 22 (AMW) 32.00; 23 (EAD) 31.66; 24 (ALI) 30.03; 25 (GUN) 28.94; 26 (VAA) 27.00; 27 (CHI) 26.81; 28 (VAR) 26.12; 29 (BEJ) 24.00; 30 (SAS) 23.21.
3 737-81B's (32929, B-5040; 32930, B-5041; 32931, B-5042) deliveries. Assigns its 10th 737-800 to subsidiary, Guizhou Airlines(GIZ) based at Longdongbao. 2 A319-132's (2004, B-6020; 2008, B-6021) (ILF) leased. 4 orders (2005-02) A330-200's (Trent 700), 276 PAX.
October 2003: Beijing to Dubai via Urumqi (757, weekly).
China Southern (GUN) may acquire >10 747-400F's.
November 2003: Guangzhou - Fukuoka (2/week). Code share with Dragonair (DRG), Guangzhou - Hong Kong. In 2004-01, code share with Air France (AFA), Guangzhou - Paris (5/week).
1st of 4 737-300QC's, converted by Pemco, GECAS (GEF) leased, to be used jointly with China Postal Airlines (CYZ) (in which (GUN) has a 49% share). The 1st 2 conversions will be quick-change (QC) and the 2nd 2 will be all-cargo airplanes.
(GAMECO) has a contract with Asiana (AAR) to perform lease-return checks on 5 737-400's starting this month and the rest being completed within the next 18 months. Has provided component repair and line maintenance services in the past.
December 2003: 2 737-341QC's (24278, B-5047; 24279, B-5072), (GEH) leased, wet-leased to China Postal Airlines (CYZ).
January 2004: 1st 737-71B (32933, B-5068) delivery.
February 2004: Launched the 1st and only all-English in-flight magazine in China, called Nihao (a Mandarin word that translates as "Hello").
Selects Rockwell Collins avionics for 6 orders A319's, 15 A320's, & 4 A330's.
(MOU) for 6 orders A319's & 15 orders A320's. 4 orders A330's transferred from CASC (CSC).
March 2004: 737-341F (24276, B-5046) & 2 737-341QC's (24277, B-5071; 73-24279, B-5072) deliveries. (737-71B (32934, B-5069) & 10th 777-21BER (IGW) (32703, B-2070) deliveries, latter for service to Los Angeles.
April 2004: 2003 = -358.3 Million yuan/-$43.3 Million (+575.8 Million Y/+$69.6 Million): significantly impacted by the (SARS) outbreak in the 1st half. Last 6 months 2003 = +CNY 872 Million/+105.3 Million (+93%): +14.8% (RPK); 63% LF.
Ho Chi Minh City to Guangzhou (A320, daily). Changchun - Tokyo.
May 2004: Shanghai Pudong - Saipan (757, 2/week). Nanchang - Guangzhou - Singapore (757, 3/week). Urumqui - Dushanbe (weekly). Shenyang - Pyongyang (MD-90, 2/week).
737-71B (32935, B-5070), delivery. 2 A319-132's (2200, B-6039; 2203, B-6040), (ILF) leased.
June 2004: Guangzhou - Beijing - Dubai (2/week); - Paris (CDG) (777, 4/week). Code share with Korean Airlines (KAL), Seoul Incheon - Shenyang. Code share with (KLM), Shanghai (Pudong) - Beijing - Amsterdam (777, 3/week).
Opens its 1st Paris sales & marketing office.
USA and China have signed a landmark air services agreement that will more than double the number of USA airlines that may serve China and will permit a nearly 5-fold increase in weekly flights between the 2 countries over the next 6 years.
The agreement allows for +5 airlines from each country, the USA may name +1 additional all-cargo carrier, while China may name either a passenger or cargo carrier, to start service later in 2004. The other 4 new-entrant airlines may be either passenger or cargo carriers, with 1 new carrier entering the market in each of the years 2005, 2006, 2008, & 2010. United Airlines (UAL), Northwest Airlines (NWA), FedEx (FED), & United Parcel Services (UPS) currently serve China.
The agreement allows +195 weekly flights for each side, +111 by all-cargo carriers, & +84 by passenger airlines, resulting in a total of +249 weekly flights at the end of a 6-year phase-in period. A total of +14 of these flights will be available for new passenger services later in 2004.
Each country's carriers are now allowed to serve any city in the other country. Currently, Chinese carriers are limited to 12 US cities, and USA passenger carriers may fly to only 5 Chinese cities. The agreement allows unlimited code sharing between USA and Chinese carriers, thus expanding the current agreement which only allows code-sharing only to a limited number of cities.
The agreement also provides that when carriers establish cargo hubs in the other country, they will be afforded a high degree of operating flexibility, and expands charter opportunities beyond those provided by the existing agreement.
Trade between the countries has grown dramatically from $4.8 Billion in 1980 to >$170 Billion in 2003. The USA is China's largest export destination, and China is the USA's fastest-growing market.
2 757-236's (29945, B-2860; 29946, B-2861), Pembroke (PEB) leased. A319-132 (2232, B-6041), (ILF) leased. EMB-145LI (755, B-3061) delivery.
July 2004: Launches a commuter network from Guangzhou Baiyun airport using its new fleet of 6 ERJ-145's to serve short-haul 7 medium-haul point-to-point routes. Short-haul routes will operate to destinations located "around the Guangzhou marketplace" including Beihai, Meixian, & Zhanjiang. Medium-haul destinations include Changzhi, Lianyungang, Luoyang, Nantong, Nanyang, Xiangfan, Xuzhou, Yichang, & Zhoushan. (GUN) had been operating 737's on the routes but it was unable to generate sufficient passenger loads.
August 2004: Guangzhou's $2.4 Billion New Baiyan Airport opens. It is expected to challenge Hong Kong for area dominance. It has 2 runways and can handle 25 Million passengers/year & 1.2 Million tonnes/year of freight. A 2nd phase due for completion in 2010, will lift capacity to 80 Million passengers/year & 2.5 Million tonnes/year of freight. The old airport opened in 1957 and is now hopelessly inadequate. Unisys Corp developed and integrated the core operational systems for the airport, including Central Integrated Info Management System, which integrates info flow from systems around the airport, collates & stores data in a central airport database and supplies info to the airport community. The system will also facilitate coordinated future planning, control of daily operations, and centralized accounting & reporting functions.
Appointed Global Air Cargo, Miami as its Miami general sales agent.
Is hoping to become by a Memo of Understanding (MOU) the next member of the SkyTeam (STM) alliance (as 1st Chinese airline to join a global alliance).
Maintenance contract to Iberia Airlines (IBE) to inspect and repair and major overhaul 757-200 (RB211-535E4) engines.
1st Chinese airline to enter global alliance when it signed an agreement for future membership in SkyTeam.
Liu Shaoyang, Chairman, ex-(CAAC) Vice Chairman and former General Manager, China Eastern (CEA), replaced Yhan Ziqin, who retired.
737-71B (32936, B-2169) delivery. EMB-145LI's (701, B-3060) delivery.
September 2004: Dalian - Ningbo - Singapore (2/week).
737-71B (32937, B-2620), & A319-132 (2273, B-6042) deliveries. 1 A320-232 (2275, B-2403), (CIT) (TCI) leased. EMB-145LI (781, B-3062), delivery.
October 2004: Xian Min, President, (currently party secretary of China Northern (SHY), replaced Wang Chang Shun, who resigned.
Launches a new Financial Budget Management system that was developed by its Financial & Info Technology (IT) departments.
November 2004: Purchases Xinjiang Airlines (XIJ) & Northern Airlines (SHY) from its parent company, China Southern Holding (assets 16.91 Billion yuan/$2.04 Billion) and will asssume # 15.09 Million yuan debt from the 2 airlines. (GUN)'s fleet will grow from 139 to 214 airplanes. This will allow (GUN) to expand further into northern China, minimize route overlap and optimize flight schedules, enhance its ticket sales network and reduce overhead, improve allocation of airplanes, engines, spare parts & crews, reduce maintenance costs and strengthen marketing efforts.
2 737-71B's (32938, B-2622; 32939, B-2916), deliveries.
December 2004: Will carry >40 Million passengers in 2004.
17,031 employees (including 1,243 FC, 3,614 CA, & 2,199 MT).
737-71B (1624-32940, B-2917) & 3 A320-214's (2334, B-2407; 2343, B-2405; 2345, B-2374) deliveries.
January 2005: +9 orders (2/06) 737-800's, (GEF) leased. (CAAC) (CAC), $7.2B, 60 orders (2/08) 787-8's, 223 pax: 13 787-8's to China Southern (GUN), including 3 787's for Xiamen Airlines (XIA); 15 787-8's to China Eastern Airlines (CEA); 8 787-8's to Hainan Airlines (HNA); 20 787-8's to go to Air China (BEJ); and 4 787-8's Shanghai Airlines (SHA). Confirmed $1.4B, 5 orders A380's.
A320-214 (2354) delivery.
February 2005: Provides daily flight information accessible by cell phones at Guangzhou Baiyun airport. Mobile phone messages service is available to members of its frequent flier program Sky Pearl Club at no charge until 6/05.
A320-214 (2361), delivery. 6th ERJ-145 delivery and final airplane assembled in Harbin.
March 2005: A319-132 (2408), (ILF) leased and A330-243 (652, B-6057) delivery.
April 2005: 17,569 employees.
Code share with Vietnam Airlines (VIE), Guangzhou to Ho Chi Minh City.
2004 = -# RMB 48 Million/-$6 Million (-# RMB 358 Million): 69.2% LF (+4.6). China Southern (GUN) acquired the core aviation business assets of China Northern (SHY) and Xinjiang Airlines (XIJ) last year.
3rd A330 delivery.
May 2005: 12 orders 737-700's and 18 orders 737-800's. A319-132 (2519, B-6200), delivery.
June 2005: A330-243 (664, B-6059), delivery.
July 2005: 2 A319-132's (2505, B-6205; 2519, B-6200), 2 A320-214's (2484, B-6251; 2511, B-6253), & A321-231 (2521, B-2417) deliveries.
August 2005: 18,221 employees (+3.7%).
China Southern Airlines (GUN) announced plans to invest at least 1 Billion yuan/$123.5 Million to construct a new cargo facility that would cover more than >100,000 sq m in an industrial zone adjacent to Beijing Capital Airport.
Launched new services from Guangzhou to Hailar, Manzhouli, and Xilinhot - - via Hohhot - - in Inner Mongolia, using Boeing 737-300s.
CAE received an order for a 737-800 full flight simulator from Zhuhai Flight Training Center, its joint venture with China Southern Airlines (GUN). At list prices, the contract's value is C$16 million. The order brings the number of (CAE)-built simulators that the facility operates to 10, making it the largest independent training facility in China, according to (CAE).
China Southern Airlines Group (GUN) reported a hefty first-half net loss under IFRS of -RMB907 million/-$112 million, reversing income of RMB266 million in the January - June 2004 period.
The results are the first since the full merger with China Northern Airlines (SHY) and Xinjiang Airlines (XIJ).
In a statement, Chairman Liu Shao Yong attributed the loss to rising fuel prices and intense domestic competition. He also said that the benefits of the merger with China Northern (SHY) and Xinjiang (XIJ) will take time to achieve.
4 A319-132's (2541, B-6201; 2546, B-6202; 2554, B-6203; 2558, B-6209), deliveries.
September 2005: China Southern Airlines (GUN) said it finalized an earlier commitment for 10 787s, part of a commitment from six Chinese airlines for 60 Dreamliners announced in January. The first 787 will be delivered to China Southern (GUN) in July 2008, one month prior to the start of the 2008 Summer Olympic Games in Beijing. The remaining airplanes will be delivered through 2010. Last month, China Eastern Airlines (CEA), Air China (BEJ), Shanghai Airlines (SHA) and Xiamen Airlines (XIA) said they had signed up for 42 787s, leaving only Hainan Airlines (HNA)to consummate an order for six. Interestingly, Boeing has yet to confirm any of the orders as firm on its website.
2 orders (2/07) A330-200's and 8 orders (2/07) A330-300's.
737-81B (34250, B-5113), (GEF) leased, & A319-132 (2555, B-6208), deliveries. 737-5YO (24899), returned to (GEF), leased to Aerolineas Argentinas (ARG).
October 2005: China Southern Airlines (GUN) added three weekly roundtrips between its hub at the new Baiyun International Airport in Guangzhou and Ho Chi Minh City, bringing the total to 10 weekly using A320s.
China Southern Airlines (GUN) and Taiwan's Far Eastern Air Transport (FAT) said they will jointly operate a new 4X weekly route linking Shenyang, the capital of northeast China's Liaoning Province, with South Korea's Jeju and Taipei. China Southern (GUN) also said it would boost its Ho Chi Minh City service to 10X weekly, using A320s.
Japan Airlines (JAL) on October 30, will begin code sharing with China Eastern Airlines (CEA) on three domestic routes: Shanghai - Chengdu, Shanghai - Chongqing, and Shanghai - Shenzhen, a total of 42 weekly flights. (JAL) already codeshares with Hainan Airlines (HNA) on seven weekly flights between Beijing and Chengdu. It also operates JAL China Express with Hainan Airlines (HNA) from Beijing to three Chinese cities and on six routes from Beijing in cooperation with China Southern Airlines (GUN).
(GUN) will increase the frequency of flights to Australia from November. On the Guangzhou to Melbourne there will be a 3rd weekly flight and on the Guangzhou to Sydney route there will be a 5th weekly flight.
China signed a deal for 70 Boeing 737-700/800s for delivery between 2006 and 2008. The airplanes are destined for: Air China (BEJ), China Southern Airlines (GUN), China Eastern Airlines (CEA), Shanghai Airlines (SHA), Xiamen Airlines (XIA), Shandong Airlines (SHG), Hainan Airlines (HNA) & Shenzhen Airlines (SHZ).
737-81B (34248, B-5112), (GEF) leased. 2 A319-132's (2574, B-6206; 2579, B-6207), (ILF) leased.
December 2005: China and Singapore agreed to an expanded air services deal lifting restrictions on routes, capacity and airplane type on flights between the countries. The contract was signed in Beijing, according to media reports.
China Southern Airlines (GUN) announced a $134 million upgrade to its operations at Beijing Capital International Airport (PEK), including a new international terminal equipped to handle the five A380s and 10 787s it has ordered. Those airplanes will begin arriving in 2007. It already owns and operates a domestic terminal at (PEK) from which it flies 43 routes and 9 million passengers annually.
Airbus's negotiations with Chinese authorities resulted in a blockbuster contract as the airframer reached a "general terms agreement" with Chinese Aviation Supplies Import and Export Group for the purchase of 150 A320 family airplanes.
The order comprises A319s, A320s and A321s – the largest single order Airbus has ever received since it entered the Chinese market 20 years ago.
The deal is worth nearly $10 billion and was signed in the presence of Prime Minister Dominique de Villepin and Premier Wen Jiabao during the latter's visit to France.
"Since it was first introduced into the Chinese market in 1995, the A320 family airplanes have been put in service by 10 Chinese operators with a total of 216 airplanes, accounting for two-thirds of all in-service Airbus airplanes, or nearly one-quarter of the total airplanes in operation in China,” said (CSC) President Li Hai. “The demand for this modern and cost-saving airplane family from Chinese airlines has been rapidly increasing in recent years."
The 150 airplanes will be delivered to six Chinese airlines, including Air China (BEJ), China Eastern Airlines (CEA), China Southern Airlines (GUN), Sichuan Airlines (SIC), Shenzhen Airlines (SHZ), and Hainan Airlines (HNA).
The agreement followed by one day the signing of a Memo of Understanding (MOU) between Airbus and the National Development & Reform Commission of China covering Chinese participation in Airbus programs including the possibility of establishing a final assembly line "for single-aisle airplanes in China."
Five Chinese companies currently produce parts for Airbus, which has committed to increase procurement volume to $60 million by 2007 and $120 million by 2010. It employs 54 Chinese engineers, soon to be 200, at its Beijing engineering center, which will be part of China's promised participation in the A350 program. Airbus and China Aviation Industry Corporation signed a $500 million extension last month to a contract for A320 family wing boxes.
China Southern Airlines (GUN) signed an agreement with Singapore Aircraft Leasing Enterprise (SALE) (SIL) for the lease of five new A320s. The carrier already counts 58 A320s among its fleet of 257 airplanes. The new A320s will be delivered directly from Airbus in the first half of 2006 and will be leased for 12 years each. The deal is the largest bulk placement by SALE (SIL) to date. The 158-seat, two-class airplanes will be powered by IAE (V2500)s.
A320-214 (2637, B-6255), delivery.
January 2006: Chinese airlines reported robust growth in passengers and cargo for 2005 thanks to surging traffic, and in the case of China Eastern (CEA) and China Southern (GUN) the gains from mergers completed last year. Air China (BEJ) reported a +13% increase in passengers to 27.7 million while cargo jumped +10.2% to 732,818 tonnes. China Eastern (CEA) saw a +37% leap in passengers to 24.3 million and a +14% rise in cargo to 755,010 tonnes. China Southern (GUN) also had impressive numbers as passenger totals jumped +56.4% to 44.10 million and cargo climbed +42.1% to 774,550 tonnes. In Hong Kong, Cathay Pacific (CAT) reported +13% annual growth in passengers to 15.4 million while cargo rose +15% to a record 1.1 million tonnes. Dragonair (DRG) handled 5 million passengers, up +9.9%, and 385,000 tonnes of cargo, a rise of +12.5%.
(KLM) will launch a 2x-weekly Amsterdam - Chengdu service from May 28 using 777-200ERs in cooperation with China Southern Airlines (GUN). Chengdu is (KLM)'s fourth Chinese destination.
Chinese domestic airlines flew a record 138 million passengers in 2005, a rise of +15% over 2004 and double the number of 2000. The figure is expected to double again in the next five years, according to Gao Geng, the vice minister of the General Administration of Civil Aviation in China. Cargo and airmail throughput rose +14% to 3.04 million tons in 2005 and also is expected to double in the next five years. However, profit margins will remain tight within the sector. He noted revenues in the sector had grown to CNY170 billion/$21.09 billion at the end of 2005, but profits in the past five years had amounted to only CNY10 billion.
737-86N (34252, B-5133), (GEF) leased. 737-81B A319-132 (2667, B-6219), (ILF) leased delivery. A320-214 (2680, B-6275), delivery.
February 2006: B/E Aerospace was contracted by China Southern Airlines (GUN) to convert six A300-600s from passenger airplanes to freighters. Deliveries will begin in the latter part of 2007. B/E's Flight Structures arm will develop the engineering and certification packages and manufacture required components while China Southern (GUN) affiliate Guangzhou Aircraft Maintenance Engineering Company (GAMECO) will perform the conversions.
737-71B (29366, B-5221), (ILF) leased. A320-214 (2689, B-), SALE (SIL) leased.
March 2006: China Southern Airlines (GUN) selected Rolls-Royce (RRC) (Trent 700s) to power 10 A330s in a $600 million deal that includes a support package. Delivery of the new airplanes will occur in 2007 and 2008 and will add to the carrier's fleet of four Trent-powered A330s. Rolls said the (Trent 700) has won a 42% share of the combined firm and option A330 business, and holds the entire market in mainland China and Hong Kong.
China Southern Airlines (GUN) began 3x-weekly Guangzhou - Shanghai Pudong - Kitakyushu service aboard A319s and 757s in addition to flights from Guangzhou to Sydney, Melbourne and Singapore. It also plans to increase its Shanghai - Tokyo service.
737-71B (29367, B-5222) & A320-214 (2708, B-6263), (ILF) leased, 2 737-83N's (32610, B-5122; 32611, B-5123), (GEF) leased, and 3 A320-232's (2689, B-6276; 2701, B-6277; 2714, B-6278), SALE (SIL) leased.
April 2006: China Southern Airlines (GUN) will increase its Los Angeles - Guangzhou service to daily on June 22. China Southern Airlines (GUN) and (KLM) expanded their code share agreement to include 2x-weekly 777 service between Chengdu and Amsterdam operated by (KLM).
China Southern Airlines (GUN) will operate a nonstop service between Beijing and Pyongyang, April 26th through October 30th. The airline will operate 3x-weekly, on Mondays, Wednesdays & Fridays, using a 737-300 or 737-800.
China Southern (GUN) signed Carlson Marketing China to renovate and upgrade its Sky Pearl Club loyalty program. The airline said it now is selling at least 20% of its tickets on its website at a rate of 570,000 per month. It sold more than >600,000 tickets in March worth in excess of >$41 million.
Expenses surpassed revenues in a year in which Guangzhou-based China Southern Airlines (GUN) continued to absorb China Northern Airlines (SHY) and Xinjiang Airlines (XIJ), leading to an annual loss of -CNY1.85 billion/-$229.8 million compared to a +CNY155 million profit in 2004.
"Although the Company recorded a significant increase in traffic revenue during the year, the prices of jet fuel in the global market have been on the rise, and competition on domestic and international routes has intensified," the carrier said in a statement. "Moreover, the businesses that the Group has acquired from China Northern Airlines Company (SHY) and Xinjiang Airlines Company (XIJ) are still undergoing integration and adjustments. Operating synergies of the integration could not be realized in such a short time. All of these factors have exerted strong pressure on the Company's operation during the year."
Revenue increased +59.7% to CNY38.29 billion and expenses surged +71.6% to CNY39.6 billion, turning a +CNY909 million operating profit in 2004 into a -CNY1.31 billion operating loss last year. The addition of China Northern (SHY) and Xinjiang (XIJ) contributed to a +66.5% increase in (RPK)s passenger traffic to 61.92 billion and a +56.4% lift in the number of passengers carried to 44.12 million. The airline did not provide capacity, yield or unit revenue/cost figures. As of December 31, it operated a fleet of 251 airplanes on 559 routes serving 142 destinations.
China Southern (GUN)'s board approved expansion of its secondary base in Beijing with the addition of wide body airplanes starting this summer, facilitating its "strategic transition from a city-pair operation model to a hubbing network operation model" ahead of the 2008 Beijing Olympics. The airline said the transition is key to maintaining its market position during a period of increased competition and high fuel prices.
(CAAC) (CAC) and the National Development and Reform Commission announced an increase in fuel surcharges on domestic routes of less than 800 km to CNY30/$3.74 from CNY20 and on routes greater than 800 km to CNY60 from CNY40. Increases went into effect April 10 and will last until October 10.
Boeing is expected to sign contracts shortly with Chinese airlines for 80 737s. The deal is the second part of an order announced late last year for 70 737s. Hainan Airlines (HNA) will take 15, China Southern Airlines (GUN) 10, Xiaman Airlines (XIA) five, and Shandong Airlines (SHG) six, with the balance taken by Air China (BEJ), China Eastern Airlines (CEA), Shanghai Airlines (SHA), and Shenzhen Airlines (SHZ). Airbus secured a similar commitment for 150 A320s last year but apparently signed a contract with the (CAAC) (CAC), listing the orders as part of the year's record-breaking sales.
737-81B (30697, B-5147), A320-214 (2743, B-6269), & 2 A321-231's (2713, B-6265; 2741, B-6267), all (ILF) leased.
May 2006: China Southern Airlines (GUN) launched a 3x-weekly Beijing - Pyongyang service aboard 737s, a 4x-weekly Urumqi - Moscow service (resumption of a route suspended in 2003) and a 6x-weekly Guilin - Macau flight aboard newly delivered 737-800s. It also announced it will increase to daily its 4x-weekly Guangzhou - Beijing - Amsterdam 777 service. Flights will be 5x-weekly from June 24 and daily from August 14. Additionally, it expanded its code share agreement with (KLM) to cover the Dutch carrier's 2x-weekly 777 service between Amsterdam and Chengdu. China Southern Airlines (GUN) launched 2x-weekly 737 service between Haikou and Singapore and weekly Urumqi - Baku flights aboard a 757.
The Chinese government is expected to invest a further CNY140 billion/$17.43 billion in aviation over the next five years, more than the country spent in the previous 15, according to local media reports. The (CAAC) (CAC) said the spending would be focused on the construction of 42 new airports, in addition to upgrading existing infrastructure.
The (CAAC) (CAC) expects the number of Chinese airports to increase from the current 142, to at least 220 by 2020, as the number of airplanes rises from 863 to 1,580 in 2010 and to about 4,000 in 2020.
Top of the regulator's agenda is to reinforce the status of Beijing Capital, Shanghai Pudong and Guangzhou Baiyun as key international hubs, and to upgrade Chengdu, Kunming, Xi'an, Wuhan and Shenyang airports to the status of major regional hubs. Yunnan Province in the southwest of the country will account for nearly one-seventh of the planned spending, as it adds another five airports by 2010.
The (CAAC) (CAC) expects overall passenger and cargo traffic to grow at an average of +14% annually through 2010, with growth slowing to +11% per year from 2011 to 2020. Last year, domestic airlines carried 138 million passengers, an increase of +15.5% from the previous year. Cargo traffic increased at +13.8% to 3.4 million tons over the same period.
(UATP) added China Southern (GUN) as its newest (UATP) Merchant. It will accept all (UATP) corporate cards.
737-81B (30699, B-5149), A320-214 (2770, B-6272), & A321-231 (2759, B-6270), all (ILF) leased. A320-214 (2772, B-6279), (SALE) (SIL) leased.
June 2006: China Southern Airlines (GUN) inaugurated nonstop service from Urumqi to Baku (Azerbaijan). The route is operated once a week on Fridays using a 757-200. The airline also inaugurated nonstop service from Haikou to Singapore. This route is operated 2x-weekly with a 737.
China and Taiwan continued to relax air transport restrictions with the decision to allow more direct flights during holiday periods and cargo charters for the first time. Flights operated between the countries during the Chinese New Year proved popular and led to calls for increased service. Passenger flights could take place as early as October's Mid-Autumn Festival, Taiwan Mainland Affairs Council Chairman Joseph Wu said. Cargo flights will be allowed on a case-by-case basis. Six airlines from each country will be allowed to operate a combined 168 roundtrip flights per year during four select holiday periods.
SkyTeam took another step toward adding China Southern Airlines (GUN), signing a Global Airline Alliance Adherence Agreement in Guangzhou that outlines the carrier's "commitment to meet the stringent set of standards to be officially recognized as a member of SkyTeam." It is expected to join in 2007.
737-81B (30709, B-5165), (ILF) leased, A319-132 (2815, B-6220), (ILF) leased, A320-214 (2796, B-6281), delivery, and A321-231 (2767, B-6271), (ILF) leased.
July 2006: China and Japan reached an air services agreement that provides for a +20% increase in the number of passenger flights between the countries and a doubling of cargo services, Reuters reported. Thirteen carriers from each country will have access, up from the current six. The number of permitted flights will rise to 547 per week, with Chinese carriers operating 300.
China Southern Airlines (GUN) has confirmed it will be getting 50 A320 family airplanes. The deal is part of the 150 A320s ordered by China in December 2006. China Southern (GUN) is expecting delivery of the airplanes in 2009 and 2010. The third carrier to announce its allotment, China Southern (GUN)'s order is valued at $3.3 billion. It will take delivery in 2009 and 2010. Air China (BEJ) will take 24 A320s and China Eastern Airlines (CEA) will take 30. A total of 46 remain to be allocated to three more airlines.
737-81B (33006, B-5166), 2 A320-214's (2824, B-6282; 2834, B-6283), and A231 (2809, B-6273), deliveries.
August 2006: China Southern Airlines (GUN) reported a -CNY784 million /-$98 million net loss for the first half of 2006, narrowed from a -CNY964 million loss in the first half of 2006. "As jet fuel prices kept rising and the interest rates of US dollar-denominated loans climbed up during the period, the cost pressure that [China Southern (GUN] faced in its business operations did not ease, resulting in a net loss," the airline said. Revenues increased +15.7% to CNY20.6 billion as expenses climbed +13.7% to CNY20.8 billion, producing an operating loss of -CNY243 million for the six months, narrowed from a -CNY416 million operating loss last year. China Southern (GUN) did carry +12% more passengers during the period and said the "favorable macroeconomic environment" in China portends well for its future. It added that "the most difficult time of an enterprise is also a special time of which it can take advantage for reorganizing and strengthening itself" and promised "to maintain a strict control on its costs" going forward.
China Southern Airlines (GUN) will operate daily Guangzhou - Lhasa service via Shangri-La through the summer schedule, with 757s and A319s. It also began a 3x-weekly Guangzhou - Manila service.
China Southern Airlines (GUN) said yesterday that passengers now can check in for flights and print boarding passes electronically from its website.
Guangzhou Aircraft Maintenance Engineering (GAMECO), a joint venture between China Southern Airlines (GUN) and Hutchinson Whampoa, became the 15th member of the Airbus Maintenance Repair & Overhaul (MRO) Network.
China Southern Airlines (GUN) ordered (GEnx) engines to power its 10 787s to be delivered beginning in 2008. Value of the order is estimated at $240 million.
2 A320-214's (2855, B-6288; 2861, B-6289), deliveries.
September 2006: China Southern Airlines (GUN) is the leading air transport enterprise on China, serving domestic, international and regional destinations.
Employees = 18,221.
(IATA) Code: CZ - 784. (ICAO) Code: CSN (Callsign - CHINA SOUTHERN).
Parent organization/shareholders: China Southern Air Holding Company (50.3%); private Hong Kong and H share holders (26.84%); & private A share holders (22.86%).
Owns: China Postal Airlines (CYZ) (49%); Guangxi Airlines (GUX) (60%); Guizhou Airlines (GIZ) (60%); Shantou Airlines (SHT) (60%); Sichuan Airlines (SIC) (39%); Xiamen Airlines (XIA) (60%); & Zhuhai Airlines (ZHU) (60%).
Alliances: Air France (AFA); Asiana Airlines (AAR); Delta Airlines (DAL); Dragonair (DRG); Garuda Indonesia (GIA); Japan Airlines International (JAL); (KLM); Korean Air (KAL); & Vietnam Airlines (VIE).
Main Base: Guangzhou Baiyun Airport (CAN).
Hubs: Shenzhen Baoan International (SZX); Zhuhai (ZUH); Shantou (SWA); Wuhan Nanhu (WUH); Xiamen-Gaoqi International (XMN); Guiyang (KWE); Guilin (KWL); Haikou (HAK); Zhengzhou (CGO); & Changsha (CSX).
Domestic, Scheduled Destinations: Aksu; An Shun; Baoshan; Beihai; Beijing; Changchun; Changde; Changsha; Changzhi; Changzhou; Chengdu; Chongqing; Dali City; Dalian; Dandong; Dayong; Diqing; Enshi; Fuzhou; Ganzhou; Guangzhou; Guilin; Guiyang; Haikou; Hangzhou; Harbin; Hefei; Hotan; Jiamusi; Jinan; Jinghong; Jinjiang; Juzhou, Zhejiang Province; Kashi; Korla; Kunming; Lanzhou; Lhasa; Lianyungang; Lijiang; Ling Ling; Liuzhou; Luoyang; Mei Xian; Mudanjiang; Nanchang; Nanchong; Nanking; Nanning; Nantong; Nanyang; Ningbo; Qiemo; Qingdao; Qiqihar; Sanya; Shanghai; Shantou; Shenyang; Shenzhen; Shijiazhuang; Taiyuan; Tianjin; Tongren; Tunxi; Urumqi; Wenzhou; Wuhan; Wuxi; Xi'An; Xiamen; Xiangfan; Xingyi; Xining; Xuzhou; Yancheng; Yanji; Yantai; Yichang; Yinchuan; Yining; Yiwu; Zhanjiang; Zhengzhou; Zhi Jiang; & Zhuhai.
International, Scheduled Destinations: Almaty; Amsterdam; Baku; Bangkok; Barcelona; Berlin; Bishkek; Busan; Cheongju; Copenhagen; Daegu; Dubai; Dushambe; Frankfurt; Fukuoka; Hanoi; Hanover; Hiroshima; Ho Chi Minh City; Hong Kong; Islamabad; Jakarta; Jeju; Johannesburg; Kuala Lumpur; Laoag; Lisbon; London; Los Angeles; Madrid; Manila; Melbourne; Milan; Munich; Nagoya; Niigata; Novosibirsk; Osaka; Paris; Penang; Phnom Penh; Rome; Saipan; Sapporo; Sendai; Seoul; Singapore; Stockholm; Sydney; Tashkent; Tokyo; & Toyama.
China Southern Airlines (GUN) will discontinue charter service from Guangzhou to Saipan this month. The airline has been operating the route since 2002 and was currently flying twice a week using a 757-200.
China Southern (GUN) inaugurated nonstop service from Shanghai Pudong to Seoul. The airline now operates a daily flight using an A320. China Southern (GUN) inaugurated nonstop service from Beijing to Seoul. The airline now operates a daily flight using a 757-200.
China Southern Airlines (GUN) launched daily flights from Beijing to Shanghai Hongqiao and Chengdu aboard 777s and to Hangzhou aboard A330s.
Air France (AFA)/(KLM) (CEO), Jean-Cyril Spinetta said that "(KLM) has started to discuss a cargo joint venture with China Southern (GUN)" but cautioned that "the talks are in the initial stage," according to Reuters. Beijing is encouraging foreign airlines to set up cargo Joint Ventures (JV)s with Chinese companies, in order to meet the nation's explosive growth in airfreight demand.
737-71B (35360, B-5232), and 2 A320-214's (2877, B-6290; 2899, B-6287, (ILF) leased, deliveries.
October 2006: China Southern Airlines (GUN) and China Eastern Airlines (CEA) each reported profitable third quarters yesterday, according to statements cited in press reports from Beijing. China Southern (GUN) posted a +CNY1.29 billion/+$163.1 million profit, up +51.4% from the +CNY852 million earned in the year-ago quarter. Revenue rose +21.8% to CNY13.89 billion and passenger numbers climbed +12.4% to 14.3 million. Through nine months, the carrier is +CNY453 million in the black compared to +CNY9 million in the year-ago period.
China Southern Airlines (GUN) will discontinue service from Beijing to Pyongyang next weekend. The airline operates 3 flights a week, on Mondays, Wednesdays, & Fridays, using a 737-300 and is the only foreign airline flying into the North Korean capital.
China Southern Airlines (GUN) launched daily Shenzhen - Shanghai Pudong - Nagoya service aboard an A320.
$1.84 Billion orders (11/08) for 6 777F freighters.
737-71B (29371, B-5230), 737-81B (30708, B-5163), & A319-132 (2901, B-6158), (ILF) leased, 2 737-71B's (35361, B-5233; 35363, B-5238), & A320-214 (2915, B-6291), deliveries.
November 2006: China Southern (GUN) will inaugurate direct service from Beijing to Lagos on December 30th. The airline will operate 3 flights a week, departing Beijing on Mondays, Wednesdays, & Saturdays, and Lagos on Tuesdays, Thursdays, & Sundays, using A330-200s, via Dubai. This will be a continuation of the already existing Beijing - Dubai service.
3 757-200s sold to Jet2 (JT2). A319-132 (2940, B-6160), & A320-214 (2950, B-6303), & A321-231 (2936, B-6302), (ILF) leased, and A320-214 (2960, B-6292), delivery.
December 2006: Boeing (TBC)'s Commercial Aviation Services unit reached agreement with Messier Services-Asia, SR Technics (SWS), and Guangzhou Aircraft Maintenance Engineering Co Ltd (GAMECO) (GUN) for provision of maintenance, repair and overhaul (MRO) services on 777 and 737NG landing gear in the Asia/Pacific region. Messier will perform 777 and 737NG landing gear work, while Guangzhou (GUN) and SR Technics (SWS) will support just 737NG landing gear. The agreements are part of the Boeing Component Repair Network Service Centre program, which has as its goal to "reduce overall repair costs and manage complex rotable programs by establishing additional (MRO) support in key global regions."
2 737-71Bs (29370, B-5235; 29372, B-5237), 2 A319-132s (2948, B-6161; 2969, B-6162), & A321-231 (2971, B-6305), all (ILF) leased and A320-214 (2986, B-6293), delivery.
January 2007: The Chinese government is considering an injection of up to $2 billion into the country's three major airlines to address balance sheet debt problems brought on by high fuel prices.
Sources in the government confirmed the existence of a financial injection plan, first revealed in the "Asian Wall Street Journal."
Beijing generally has tried to maintain a hands-off approach to the fiscal affairs of Air China (BEJ), China Southern Airlines (GUN), and China Eastern Airlines (CEA), but it now believes intervention may be necessary as the carriers have been hit hard by fuel prices that are higher in China due to various levies.
China Southern Airlines (GUN) told the Shanghai Stock Exchange it will return to profitability in 2006 following a -CNY1.79 billion/-$229.9 million loss in 2005, according to press reports. It will release its results in April. It said on its website that it will report CNY46.54 billion in revenue for 2006, of which more than 30% came from online sales.
China Southern Airlines (GUN) said it carried 49.21 million passengers last year, up +11.5% over 44.12 million carried in 2005. In addition, China's largest airline added 64 new airplanes in 2006, bringing its total fleet to 298 airplanes.
China Southern Airlines (GUN) launched 3x-weekly Beijing - Lagos service aboard an A330.
February 2007: China Southern Airlines (GUN) announced that it will launch international service to 10 destinations from its Guangzhou hub in 2007. New markets are Dubai, Luanda, Sendai, Sapporo, Kathmandu, Delhi, Siem Reap, Phuket, Yangon and Vientiane. Launch dates were not provided.
Starting March 26th, Guangzhou - Dubai, using 777-200s. Starting September 9th, Huangzhou - Delhi, using 757-200s.
China Southern Airlines (GUN) has received its (IATA) Operational Safety Audit (IOSA) certification.
The carrier plans to take delivery of 68 airplanes this year, increasing its fleet to 440.
737-71B (35364, B-5239) & 737-81B (35365, B-5189), deliveries.
March 2007: Oneworld (ONW) Alliance is discussing membership with China Eastern Airlines (CEA) alliance Managing Partner, John McCulloch announced in a briefing with reporters cited by Reuters. Oneworld has yet to recruit a member from mainline China, while SkyTeam is preparing to welcome China Southern Airlines (GUN), and Star Alliance will admit Air China (BEJ) and Shanghai Airlines (SHA).
China Southern Airlines (GUN) announced receipt of a CNY10 billion/$1.29 billion credit extension from the China Construction Bank.
China Southern Air Holding (CSAH) Co, parent of China Southern Airlines (GUN), announced its intention to launch a reform next month of the company's split-share structure, which comprises noncirculating and publicly traded shares. But it must overcome significant hurdles if it is to match Air China (BEJ) and China Eastern Airlines (CEA), which completed similar reforms at the end of 2006. The intention is to turn the state-owned noncirculating shares into circulating shares. China Southern (GUN) said its A shares suspended trading and it plans to release further details to shareholders on April 9. The parent has been unavailable for further comment. Noncirculating shares are either complimentary or purchased at a far cheaper price than their circulating counterparts. In order to secure approval for the stock transition, the company must satisfy holders of circulating shares either through an additional distribution of noncirculating shares or by paying them a special dividend. But late last year (CSAH) said neither alternative is possible. It cannot issue additional shares because Beijing must maintain a 50.3% holding, according to (CAAC) regulations governing state-owned carriers, and it does not have sufficient cash to pay a dividend. It rejected stock warrants as a possible solution, citing uncertainty in the carrier's management and the company's unfavorable financial position. The airline said in January it expects to report a profit for 2006 when it releases its results in April. It lost -CNY1.79 billion/-$231.2 million) in 2005.
737-81B (35366, B-5190) and A321-231 (3067, B-6306), (ILF) leased deliveries.
April 2007: China Southern Airlines (GUN) flew 6.53 billion (RPK)s passenger traffic in March, up +24.9% from the year-ago month. Capacity lifted +20.5% to 8.87 billion (ASK)s and load factor was up +2.6 points to 73.6% LF.
China Southern Airlines (GUN) returned to profit for the first time in four years in 2006, reporting +CNY188 million/+$24.3 million in net earnings under international accounting standards, a reversal from a loss of -CNY1.85 billion in 2005, according to a filing with the Shanghai Stock Exchange cited by press reports. A strengthened yuan and increased fuel surcharges were given some credit for the turnaround. "Bloomberg News" reported that the yuan grew +3.3% in 2006, and that the airline gained +CNY1.49 billion as a result. Its 2006 operating profit was +CNY312 million on a +20.5% increase in revenue to CNY47.05 billion. Passenger numbers rose +11.5% to 49.2 million and load factor climbed +1.6 points to 71.7% LF.
China Southern Airlines (GUN) reported a first-quarter net loss of -CNY188 million/-$24.3 million, narrowed from a -CNY665 million deficit in the year-ago quarter, on a +26.1% year-over-year lift in operating revenue to CNY11.89 billion. Operating expenses rose +24.3% to CNY10.58 billion. Industry analysts cited falling domestic oil prices and the appreciation of the yuan as key to (GUN)'s improved performance. UBS Asia-Pacific Chief Economist, Jonathan Anderson said Chinese carriers will benefit from a further 6% to 7% appreciation in the yuan in 2007, while CITIS Chief Aviation Analyst, Ma Xiaoli noted that the decline in domestic oil prices to CNY90 per ton will result in a +CNY130.4 million boost to (GUN)'s net income in 2007.
(GUN) unveiled details of its split share reform program, under which it will distribute 14 stock warrants per 10 circulating "A" shares, representing an additional 1.597 shares per 10 "A" shares. It committed not to sell or transfer its 50.3% holding for three years following conclusion of the split share reform.
Trading in (GUN) stock remains suspended, due to its share reform plan. The airline's summer schedule will include new international services from Guangzhou to Yangon (July 9), Phuket (July 10), Siem Reap (July 11), and Vientiane (July 12). In the fall, it will start flying to Delhi (September 9), Sendai and Sapporo (October 28). It also applied to serve Luanda and launched 3x-weekly 777 flights to Dubai last month. Its international capacity from Guangzhou will climb more than >30% this year. It will add seven domestic destinations to its Beijing schedule, and increase frequencies on a host of other domestic and international routes.
(GUN) announced a code share arrangement with Pakistan International Airlines (PIA) covering (PIA)'s Islamabad - Beijing service and (GUN)'s Urumqi - Islamabad service.
China Southern Airlines (GUN) started 2x-weekly Guangzhou - Kathmandu flights aboard 757s.
China Southern Airlines (GUN) plans to partner with Chongqing Investment Corp to create Chongqing Airlines, which is expected to launch operations in June with three A320s. The new carrier is expected to be approved by (CAAC) (CAC). (GUN) holds 60% with an investment of CNY720 million/$93 million, while Chongqing Investment has put in CNY480 million for the remaining stake. Chongqing Airlines aims to challenge Air China (BEJ) and China Eastern Airlines (CEA), the two dominant players in western China, for both passenger and cargo traffic. China Southern (GUN) cited its wish to "explore the western China air transport market" as the main reason for the venture, saying the region's market potential "is really big now." In December 2005, (HNA) Group signed a framework agreement with Chongqing Real Estate Group to start a Chongqing Airlines (CHO). (HNA) planned to hold 75% with an investment of CNY60 million with CREG investing CNY20 million for the remainder. That airline has not been approved by (CAAC) (CAC). (CAAC) (CAC) regulations prohibit two carriers operating under the same name. (HNA) now has said it would cede the name to (GUN) and call its new carrier "Western Airlines" (CHO) instead.
Chinese airlines remain interested in aligning with global alliances despite the difficulties associated with joining up or integrating. With Air China (BEJ) and Shanghai Airlines (SHA) committed to Star Alliance and China Southern Airlines (GUN) set to join SkyTeam, speculation has turned toward Oneworld and Hainan Airlines (HNA), which recently opened a new Beijing - Osaka service in cooperation with Japan Airlines (JAL). Hainan (HNA) parent (HNA) Group told "China Business" that it established a working group in January to start preparing the carrier to join an alliance. But Hainan Airlines (HNA) may be in an inferior negotiating position, according to industry analysts, because it is based at Haikou in the deep south, while alliances are targeting carriers in Beijing (Air China (BEJ)), Shanghai (Shanghai Airlines (SHA)) and Guangzhou (China Southern (GUN)). Oneworld (ONW) Alliance Managing Partner, John McCulloch told reporters last month that his group also was negotiating with China Eastern Airlines (CEA), which is based in Shanghai. Even if an alliance regards a Chinese carrier as a good fit, the hurdles that an airline must negotiate before meeting alliance standards can be significant. For example, Shanghai Airlines (SHA) has had to work on improving or restructuring its Information Technology (IT), safety management, loyalty program, sales and marketing, legal affairs and human resources departments to conform to Star requirements. The company has admitted that it has taken a long time to meet those requirements and that the price for its Star membership is "really high." Chinese airlines also may suffer when allying with foreign carriers, as they have incurred heavy losses on international routes and have been forced to open their own markets to more experienced foreign competitors, while being unable to tap into the potential offered by foreign markets. But Shanghai Airlines (SHA) Chairman, Zhou Chi said it was worth the effort. "One single airline can't establish a foothold in every part of the world due to limitations set by national air traffic rights," he explained. "But by joining airline alliances, we can expand our international route network and better utilize our existing capacity to improve efficiency without increasing investment and fleet expansion."
(ARINC)'s AviNet Airport global IP network service was chosen by China Southern Airlines (GUN) to connect its Beijing computer system to passenger systems in Australia, Korea and Japan.
Lufthansa (DLH) Systems signed a five-year deal with China Southern Airlines (GUN) to provide its NetLine network management tool. Implementation is scheduled for late this year.
737-81B (35367, B-5191), delivery, and A321-231 (3075, B-6307), (ILF) leased.
May 2007: Starting July 9th, Guangzhou - Yangon, using A319s. Starting July 10th, Guangzhou - Phuket, using A319s. Starting July 11th, Guangzhou - Siem Reap, using A319s. Starting July 12th, Guangzhou - Vientiane, using A319s. Starting September 7th, Guangzhou - Delhi, using 757-200s. Starting October 28th, Guangzhou - Sapporo, - Sendai.
China Southern Airlines (GUN) will join SkyTeam (STM) formally by year end, Group Managing Director & (GUN) Chairman, Liu Shaoyong announced at a summit between Chinese civil aviation leaders and the alliance in Sanya. "As we are accelerating the process of conformity to SkyTeam (STM) requirements, plus the dense domestic network we already have, China's air transport industry will certainly enhance service levels and operating standards, which in the meantime will also attract more foreign passengers to our airports and hence improve Chinese airports' international reputation," he noted in his speech at the event. China Southern (GUN) signed a letter of intent with SkyTeam (STM) in August 2004. Last year, it agreed to initiate improvement and restructuring of its Information Technology (IT), loyalty program, and sales & marketing procedures, as well as human resources training.
Lufthansa (DLH) Systems signed a five-year contract with China Southern Airlines (GUN) for its network planning solution to be implemented in late 2007, marking its first deal for the service with a Chinese carrier.
Goodrich (BFG) was selected by China Southern Airlines (GUN) to supply wheels and electronically actuated brakes for 10 787s on order.
China Southern Airlines (GUN) and Air France (AFA)/(KLM) have entered into exclusive talks to launch a joint venture (JV) cargo carrier in China, (AFA)/(KLM) Vice Chairman & (KLM) President & CEO, Leo van Wijk revealed recently in Beijing. China Southern (GUN) previously said it expects to launch a cargo (JV) by the end of 2007. The carriers currently are negotiating ownership share and where to base the (JV). Earlier this year, China Southern (GUN) Vice Managing Director, Xu Jiebo said a foreign airline would hold a 49% stake in a cargo (JV), the maximum allowable foreign investment under (CAAC) (CAC) regulations. "As an important member of SkyTeam (STM), Air France (AFA)/(KLM) is one of the Western carriers we are in talks with," he acknowledged at the time.
Beijing has been encouraging foreign airlines with worldwide networks to launch cargo ventures with Chinese carriers as the nation's production of export goods continues to accelerate rapidly. Air China (BEJ) last month unveiled details of a cargo airline it plans to operate in partnership with Cathay Pacific Airways (CAT); Lufthansa (DLH) and Shenzhen Airlines (SHZ) launched Jade Cargo International (JDC) last year, and Korean Air (KAL) intends to launch a (JV) cargo carrier with Chinese logistics firm Sinotrans this year.
China Southern (GUN) boasts an extensive network in Southeast Asia, which is why it likely would have little interest in launching a cargo entity with an Asia/Pacific airline, industry analysts point out. But a formidable Western carrier such as (AFA)/(KLM) would expand its cargo reach to Europe and the USA. "So far, no specific scheme has been fixed, but this joint venture will be launched most probably this year," a source familiar with the negotiations said.
(SITA) and China Southern Airlines (GUN) reached an agreement under which the carrier will employ the Information Technology (IT) service provider's integration platform to enhance its e-ticketing and global distribution capabilities. (GUN) Chief Information Officer (CIO), Hu Chenjie said SITA's solution can optimize the airline's (IT) capability and help it grow into one of the top carriers in Asia, noting the significance of SITA's worldwide Global Distribution System (GDS) reach. (GUN) will link (SITA)'s solution with the Chinese (GDS) monopoly run by Travelsky and other Chinese airlines. "This is a significant milestone for (SITA), as it is our first signed agreement with a Chinese carrier," (SITA) Regional VP, Paul Dalton said.
While USA airlines enthusiastically applauded the newly signed air services agreement with China, their Asian counterparts admit they are at a competitive disadvantage compared to the relatively strong carriers across the Pacific. While American airlines have been focusing more on international service and already are on the Public Relations (PR) offensive, in an attempt to win the extra routes to China, Chinese carriers are equating strength with domestic market share. They commonly launch fare wars in order to attract passengers, and industry analysts are concerned this tactic may be used to gain a competitive edge in the expanded USA - China market. As USA carriers aim to improve long-haul service, Chinese airlines are engaged in "wasteful competition" that degrades collective profits, analysts have said.
The country's big three - - Air China (BEJ), China Southern Airlines (GUN), and China Eastern Airlines (CEA), - - all are suffering losses on their USA routes. Air China (BEJ)'s investment in an upgraded first (F) and business class (C) product helped boost premium revenue last year to CNY3.79 billion/$494.6 million, up +19.8% from 2005, and may convince others to follow suit. It also has raised transpacific fares to match those charged by USA carriers.
But (BEJ) has said it has little interest in serving the USA from cities, other than Beijing and Shanghai, while China Eastern (CEA)'s admission that its new service to New York (JFK) launched late last year has fallen short of projections, may warn competitors to proceed with caution.
737-71B (35368, B-5240), 737-81B (35369, B-5192), deliveries and A321-231 (3112, B-6308), (ILF) leased.
June 2007: (HNA) Group subsidiary Lucky Air (LKY) will launch "West China Airlines," Hainan Airlines (HNA)'s new Low Cost Carrier (LCC), by June 18 in Chongqing, with three 737-300s transferred from the parent company (HNA).
The new carrier is expected to receive its operating license from the (CAAC) (CAC) soon. It will join (HNA)'s other western venture, "Western Airlines (CHO)," which it has been working on since December 2005 with the Chongqing Real Estate Group. That carrier has yet to be approved by (CAAC) (CAC). (HNA) Group is the parent of Hainan Airlines (HNA).
Lucky Air (LKY) and Jianying Investment Co each hold a 35% stake in the new West China Airlines, with identical investments of CNY28 million/$3.7 million, while Sichuan Three Star General Aviation Co, Shenzhen Guorui Investment Co, and Xinjiang Siweida Technology Co each contributed CNY8 million for the remaining stakes.
With the skies over eastern China nearing saturation, several airlines are adopting a "Go West" strategy. (HNA)'s Western Airlines (CHO) originally was slated to be called "Chongqing Airlines," but China Southern Airlines (GUN) had designs on its own western carrier and the same name. (HNA) had to rebrand to "Western Airlines (CHO)" because (GUN) recently received (CAAC) (CAC) approval for its new subsidiary, which also is scheduled to launch next month. Meanwhile, Shenzhen Airlines (SHZ) plans to base its regional joint venture with Mesa Air Group, "Kunpeng Airlines," in Xi'an at year end.
China's traditionally isolationist flag carriers are taking the initiative to ally with foreign counterparts in order to take advantage of increasing liberalization and maintain their competitive position. Among the three principal carriers, China Eastern Airlines (CEA) is the only one uncommitted to a global alliance, preferring to seal its partnership with Singapore Airlines (SIA) first. (CEA) President, Li Fenghua said that (SIA)'s investment does not tie his carrier to the Star Alliance (SAL), nor does the fact that Oneworld (ONW) has yet to secure a Chinese member, render that alliance the only option. "We are leaving all the options open, as the point is to identify which airline alliance is the most suitable for us to boost growth," he said.
Meanwhile, Air China (BEJ) and China Southern Airlines (GUN) are restructuring various departments to meet requirements established by Star Alliance (SAL) and SkyTeam (SKT), respectively. (BEJ) expects to join the Star Alliance (SAL) formally in December. "Our top priority is to join the Star Alliance (SAL), as we will be able to optimize our network through deeper cooperation with other Star Alliance (SAL) members to earn profit," Managing Director International Affairs & Cooperation, Lou Yongfeng said at the recent (IATA) (ITA) Annual General Meeting (AGM) in Vancouver. Lou said boosting airport infrastructure is key to meeting the Star (SAL) Alliance standards. To that end, (BEJ) convened a conference in Sichuan Province at which leaders from 33 domestic airports committed to supporting the carrier's effort.
China Southern Airlines (GUN) expects to join SkyTeam (SKT) this year as well, which domestic industry analysts predict will help shore up the carrier's thin international network. Chinese airlines also are keen to cooperate on cargo operations. Domestic carriers' share of the international cargo market plummeted from 65.6% in 1995 to the current 23.8%, and they are looking for foreign partnerships more frequently in order to reverse that trend. For example, Air China (BEJ) expects to launch a Shanghai-based cargo carrier with Cathay Pacific Airways (CAT) this year, while (GUN) has confirmed it is talking with Air France (AFA)/(KLM) about a cargo joint venture.
With China's big three committed to finding support abroad, industry analysts are indicating that smaller domestic carriers may be unable to compete unless they take similar steps.
China Southern (GUN) expects to join SkyTeam (SKT) by year end, which President, Liu Shaoyong noted will help to boost cargo capacity through deeper cooperation with members whose networks are concentrated in Europe and North America. (GUN) already is discussing a cargo joint venture with Air France (AFA)/(KLM).
Continental Airlines (CAL) and future SkyTeam (SKT) partner China Southern Airlines (GUN) unveiled a "strategic partnership" under which the carriers will offer loyalty program and lounge reciprocity and "extensive code sharing." Frequent-flier programs will be linked in September, with lounge access to become available when (GUN) joins SkyTeam (SKT) later this year. From November, (CAL) will place its code on (GUN) flights connecting to the USA carrier's daily Newark - Beijing service as well as (GUN)'s Guangzhou - Los Angeles (LAX) service. China Southern (GUN) will place its code on (CAL) flights from (LAX).
China Southern Airlines launched flights from Changsha to Cheongju (daily), Taeju (2x-weekly), and Gongju (2x-weekly) aboard A320s.
China Southern Airlines (GUN) has outlined its strategy to seize a greater share of the international cargo market. It will begin by converting six A330 passenger airplanes into freighters over the next two years in addition to taking delivery of six 777Fs in 2008 - 2010. It intends to add to its domestic network, but will commit most of the increased capacity to international routes. It aims to build a medium-haul network in the Asia/Pacific region with the reconfigured A330Fs and expand its long-haul network into Western countries with the 777Fs and the two 747Fs, that constitute its current freighter fleet. Dalian, Guangzhou and other cities in the Pearl River Delta region will serve as hubs for medium-haul flights, while Beijing, Shanghai and Shenzhen will operate as its global hubs. It expects to have 14 freighters in 2010, giving it the biggest cargo fleet among Chinese carriers.
737-71B (35372, B-5241), 2 737-81Bs (35370, B-5193; 35371, B-5195; ), & A319-132 (3144, B-6239), deliveries.
July 2007: China Southern Airlines (GUN) flew 6.19 billion (RPK)s passenger traffic in June, up +14.5% from the year-ago month. Capacity rose +11.3% to 8.66 billion (ASK)s and load factor increased +2 points to 71.5% LF.
China's big three airlines - - Air China (BEJ), China Southern Airlines (GUN), and China Eastern Airlines (CEA) - - expect to post first-half profits, thanks largely to "continuous growth of the domestic market" and the appreciation of the yuan. China Southern (GUN) said it expected a reversal from its -CNY835 million/-$110.4 million loss in the year-ago semester, while earlier, Air China (BEJ) said in a filing with the Shanghai Stock Exchange, that it expected to report a profit more than >20 times greater than the +CNY45.8 million earned in the first six months of 2006. China Eastern (CEA) is expecting to return to the black following a -CNY40 million loss in the 2006 first half.
The board of China Southern Airlines (GUN), which also is the parent of Xiamen Airlines (XIA), approved the purchase of 20 A320 family airplanes for (GUN) and 25 737-800s for Xiamen (XIA). The two orders will cost a combined CNY23.5 billion/$3.09 billion. China Southern (GUN) and Xiamen (XIA) will sign contracts with Airbus (EDS) and Boeing (TBC) separately. (GUN) noted it expects to take delivery of A320s from March 2009 to August 2010, while Xiamen (XIA) will introduce the 737s between July 2011 and November 2013.
Along with the 12 737-800s and six 777 freighters acquired in the past year, the new airplanes will boost group capacity (ATK)s by +19.5%, (GUN) said. The company boasts the largest fleet of any Chinese airline at more than 300 airplanes.
2 737-81Bs (35375, B-5300; 35376, B-5310), and A330-243 (840, B-6708)
August 2007: China Southern Airlines (GUN) flew 7.7 billion (RPK)s passenger traffic in July, up +14.7% from the year-ago month. Capacity climbed +13% to 10.05 billion (ASK)s, lifting load factor +1.1 points to 76.6% LF.
China Southern (GUN) announced it returned to a net profit in the first half of the year, helped by strong passenger demand and the Chinese yuan's appreciation against the USA dollar.
The airline's net profit for the six months ending June 30, was +308 million yuan/+US$41 million, compared to a net loss of -854 million yuan/-US$113 million in the same period last year. Revenue rose to 25.21 billion yuan/US$3.3 billion from 21.14 billion yuan/US$2.8 billion a year earlier. The figures were reported under Chinese accounting rules. Under international accounting rules, China Southern (GUN)'s first-half net profit totaled +168 million yuan/+US$22.1 million, the company said, without providing the year-earlier figure.
The company said it booked a foreign exchange gain of +1.27 billion yuan/+US$167 million in the first half from the yuan's appreciation.
The yuan has risen more than >5 percent against the dollar since the end of last June.
China Southern Airlines (GUN) enjoyed a significant turnaround in the first half of 2007, reporting net income of +CNY226 million/+$29.7 million under (IFRS), a reversal from a loss of -CNY784 million in the year-ago semester, on a +19.2% lift in operating revenue to CNY24.56 billion. The carrier attributed the improved performance in part to "its double-hub strategy of Beijing and Guangzhou" and cost control. The "fast-growing Chinese economy, rising domestic demands, and the appreciation of the yuan" also were credited for the result.
Operating expenses jumped +17.9% to CNY24.57 billion, and operating loss narrowed to -CNY18 million from -CNY243 million. A CNY1.27 billion exchange gain, compared to a +CNY279 million boost in the year-ago period, accounted for the final result. Passenger boardings climbed +16.6% to 26.4 million, while cargo traffic rose +7.2% to 403,500 (FTK)s. Passenger load factor improved +1.7 points to 71.9% LF.
Looking ahead, (GUN) is scheduled to join SkyTeam (SKT) by year end, which the company said will help boost cargo capacity through deeper cooperation with members whose networks are concentrated in Europe and North America. It already is discussing a cargo joint venture with Air France (AFA)/(KLM) and its first A300-600F converted freighter is expected to enter service by year end. It plans to open 10 international passenger routes this year, including Delhi, Sendai, Sapporo and Luanda this fall.
China Southern Airlines (GUN) reached a deal with majority investor China Southern Air Holding Co (CSAHC), a state enterprise owning 50.3% of the carrier, to purchase the entire equity interest in China Southern Airlines Group Air Catering Co, the assets of Guangzhou BiHuaYuan Training Centre, and the assets of Hong Kong-based Nan Lung Travel & Express (including its 51% stake in Nan Lung International Freight) for a combined CNY269.5 million/$35.5 million. In turn, (CSAHC) will purchase (GUN)'s 90% stake in the Guangzhou Aviation Hotel for CNY74.7 million.
In response to the increasing competition posed by railroads, (CAAC) (CAC) asked Air China (BEJ), China Southern Airlines (GUN), China Eastern Airlines (CEA), Shanghai Airlines (SHA), and Hainan Airlines (HNA) to cooperate on the Golden Route of Beijing - Shanghai, and help make transport more efficient. Launched August 6, the new "Air Express Service (AES)" has met with mixed reaction so far. Nearly 4.2 million passengers traveled on the route in 2006, accounting for 3% of China's total passenger traffic. (CAAC) (CAC) cited its desire to "facilitate business customers to enjoy faster air service" as the reason behind (AES). Of the 37 daily flights between the two cities, (BEJ) operates 14, and (CEA) 11. Average load factor exceeds >75%.
(AES) features a flight every half hour and all tickets are fully and freely endorsable. Average travel time has been cut by as much as 40% to 3 hours as the five carriers now offer unified ground handling operations, dedicated boarding and security areas and a unified billing and accounting system. While reports last week featured some support for the faster service, there also was widespread concern and speculation that (AES) was the front for an alliance that would allow the five airlines to manipulate ticket prices. The fare on the route indeed was raised while popular discounted tickets briefly disappeared. (CAAC) (CAC) denied the speculation, while (CEA) explained that the hike was due to the increased costs associated with the unified ground handling operation. Late last week, the discounted price was reintroduced as (CAAC) (CAC) clarified its antimonopoly position.
Industry analysts have noted their disapproval, arguing that market forces must dictate demand and fares and not a forced cooperation initiated by (CAAC) (CAC). The freely endorsable tickets mean that schedule and slots will determine each carrier's load. If one of the five promotes and sells a deeply discounted ticket, the other four could pay.
Despite the nascent controversy, (CAAC) (CAC) said it would consider promoting similar service on other important business trunk routes from Beijing to Guangzhou, Shenzhen and Chengdu, plus Shanghai - Shenzhen. China Southern (GUN) Beijing Branch, Vice Managing Director, Li Jun said last week that "as far as I am concerned, (CAAC) (CAC) has finished the market research for these four routes."
China Southern Airlines (GUN) Co has announced plans to buy 55 737 airplanes to meet growing demand and renew its fleet. The planned order, subject to shareholder approval, involves an unspecified mix of 737-700 and 737-800 airplanes. At catalog prices, 55 such models would cost between about US$3.1 billion/euro2.3 billion and US$4.3 billion/euro3.2 billion. China Southern (GUN), based in the city of Guangzhou near Hong Kong, said that it will pay for the planes with a combination of cash and bank loans, and that the airplanes will be delivered from May 2011 to October 2013. (GUN) currently operates 129 737s and has 14 more already on order.
China Southern (GUN) earlier bought 37 737-800s, six 777F freighters and 20 A320s.
737-71B (35378, B-5250), delivery.
September 2007: China Southern Airlines (GUN), China Eastern Airlines (CEA), Hainan Airlines (HNA), and Shanghai Airlines (SHA) are scheduled to open new routes to the USA, under the (CAAC) (CAC) program, despite the fact that Chinese carriers collectively suffer heavy losses in transpacific operations. Industry analysts have pointed out that conditions may improve, if the USA and China sign a tourism agreement this year, that will ease USA visa restrictions on Chinese citizens.
Next year, (GUN) will open daily Beijing - Newark, and Guangzhou - Moscow flights, while (CEA) will start 2x-weekly Shanghai - Los Angeles service. Hainan (HNA) will fly 4x-weekly from Beijing to Berlin and Seattle, and Shanghai Airlines (SHA) will fly from its namesake city to Vienna (5x-weekly), Hamburg and Zurich (both 3x-weekly).
In 2009, (GUN) will fly from Beijing to Detroit and London, and from Guangzhou to Vancouver (all daily). Hainan (HNA) will open daily service from Beijing to Chicago and Newark, and Shanghai Airlines (SHA) will fly to Seattle and Los Angeles.
China Southern Airlines (GUN) continued to reinforce its "double hub" (Beijing and Guangzhou) strategy by planning to launch flights to Newark, Detroit and London from Beijing, and to Moscow and Vancouver from Guangzhou in 2008 and 2009.
737-81B (35380, B-5339), and 2 A321-231s (3241, B-6319; 3251, B-6318), deliveries.
October 2007: China Southern Airlines (GUN) posted a net profit of +CNY1.88 billion/+$249.5 million in the third quarter, up +49% from the +CNY1.29 billion earned in the year-ago quarter, on a +16.9% lift in operating revenue to CNY16.5 billion and a +10.2% increase in expenses to CNY12.33 billion.
China Southern Airlines (GUN) will launch twice-weekly, Guangzhou - Vientiane service November 6 aboard an A319. It will be (GUN)'s first Laotian destination.
Industry analysts have pointed out that the airline is attaching more importance to international expansion by continually reinforcing its "double hub" strategy at Beijing and Guangzhou, rather than focusing only on its domestic operation, as it tended to do previously. This year it has launched service to Kathmandu, Dubai, Yangoon, Phuket, Siem Reap and Delhi from Guangzhou, and plans to open routes to Vientiane, Sapporo, Teheran, Luanda and Sendai by year end. Next year, it will start daily Beijing - Newark and Guangzhou - Moscow flights. In 2009, it will fly from Beijing to Detroit and London, and from Guangzhou to Vancouver (all daily), according to the 2008 to 2009 routes distribution program released by the (CAAC) (CAC) last month.
Chinese carriers are beginning to follow the internationally common practice of recruiting privately trained pilots (FC) in an effort to make up for a pilot shortfall that (CAAC) (CAC) Vice Minister, Gao Hongfeng said last month will reach -2,000 over the next two years. The country's commercial aviation fleet numbered 1,067 airplanes at the end of July, and is expected to rise to 1,250 by 2010. Chinese carriers traditionally cover training expenses for their pilots, which normally runs several million yuan for each individual. As a result, pilots rarely are able to transfer to competing carriers, as the current employer often asks for heavy compensation from a potential new employer. In addition, the rising number of new entrants is exacerbating the problem. Gao said 39 privately run airlines have submitted applications to the (CAAC) (CAC) since 2004, and 17 have been approved so far. China Southern Airlines (GUN) started the trend in May, announcing its plans to recruit 100 privately trained pilots. Sichuan Airlines (SIC) followed three months later, hiring 50 private pilots. This month Spring Airlines (CQH), East Star Airlines (ESR), and United Eagle Air (UEG) disclosed their interest in recruiting such pilots in the near future. Shenzhen Airlines (SHZ) has taken it one step further, establishing Kunpeng International Flight School (KIFS) with a CNY30 million investment. (KIFS) will award privately trained pilots an (ICAO)-recognized license on their graduation, and currently has 120 students. That number is expected to leap to 480 next year. Industry analysts have pointed out that privately trained pilots' ability to seek new jobs, when their working contracts expire, or are terminated, will help the market mature and constitute a significant step toward solving the shortage.
Consolidation appears to be the development trend in China's airline industry, but Hainan Airlines (HNA) Group President, Chen Feng said that the "super carrier" idea promoted by some officials will not work. Chen was speaking after attending the Communist Party of China's national congress in Beijing. He noted that Air China (BEJ), China Southern Airlines (GUN), China Eastern Airlines (CEA) and Hainan (HNA) have controlled 90% of the domestic market since 2002, despite the increase in new entrants. "I don't think there is a possibility that these four bigger airlines will merge," he said. Air China (BEJ) President, Li Jiaxiang has insisted that "merger and consolidation with other domestic carriers" is one of (BEJ)'s targets in the next few years.
Concurrent with the earnings announcement, the company said it sealed a deal to purchase 10 A330-200s, which will be delivered from March 2010 to August 2012. Each costs $167.7 to $176.7 million at catalog prices, but (GUN) noted that it paid a lower price. It already had committed to acquiring 80 737-700s/-800s and 20 A320s in the past 12 months, which it said will increase total (ATK)s by approximately 43%.
(GUN) Vice Managing Director, He Zongkai said the carrier's fleet will increase to 440 in 2010. It numbered 310 airplanes as of July 31.
737-81B (35381, B-5340), and 2 A319-132s (3258, B-6240; 3269, B-6241), deliveries.
November 2007: Malaysia Airlines (MAS) and China Southern Airlines (GUN) expanded their codeshare agreement to cover 35 weekly flights between Kuala Lumpur and Beijing, Shanghai, and Guangzhou, as well as all (MAS) domestic flights from Kuala Lumpur.
China Southern Airlines (GUN) became the first mainland Chinese carrier to gain full formal membership (became the 11th member) in a global alliance, when it signed a "Global Airline Alliance Agreement" with SkyTeam (STM) on November 15, Vice Managing Director, He Zongkai said. (GUN) signed a letter of intent (LOI) with SkyTeam (STM) in August 2004, followed by a "Global Airline Alliance Adherence Agreement" in June 2006. Nine working experts from SkyTeam (STM) members gave (GUN) its final appraisal earlier this year. Besides (GUN), Air China (BEJ), and Shanghai Airlines (SHA) are scheduled to join the Star Alliance (SAL) on December 12, and China Eastern Airlines (CEA) President, Li Fenghua confirmed (CEA) has had contact with Oneworld (ONW). But he stressed that the carrier is leaving all options open. Hainan Airlines (HNA) also has expressed interest in joining Oneworld (ONW), of which Dragonair (DRG) became a formal member last month.
"We are pleased to take the lead in joining a global airline alliance in China, which will play an important role in improving our brand value and enhancing our core competitiveness and continuous profitability," Chairman, Liu Shaoyong said at a ceremony in Beijing. "SkyTeam (STM) is known for its unrivaled global connectivity and as a member we can better serve our customers, especially as the 2008 Beijing Olympic Games approach." He added, "In order to optimize our international network, we plan to add more long-haul routes starting from Beijing and Guangzhou. In the next five years, we will open new international routes to New York, London and Detroit, starting from Beijing and to Moscow and other foreign cities starting from Guangzhou." With the addition of (GUN), SkyTeam (STM) now will serve some 428 million passengers annually, through a worldwide system of 16,400 daily flights, covering 841 destinations in 162 countries, according to governing board Chairman, Leo Van Wijk. "We are excited to welcome China Southern Airlines (GUN), one of Asia's largest and leading carriers, into our network. Offering the highest flight frequencies in China, China Southern (GUN)'s membership strengthens the alliance's position in serving the world's fastest growing markets," Van Wijk noted at the ceremony. Air France (AFA) is said to be lobbying China Eastern Airlines (CEA) to join the alliance as well, but (CEA) President, Li Fenghua has said he is leaving all options open. Air China (BEJ) and Shanghai Airlines (SHA) are scheduled to join Star Alliance (SAL) on December 12. Hainan Airlines (HNA) and Shenzhen Airlines (SHZ) also have shown interest in joining an alliance.
Chinese carriers responded to climbing oil prices by raising fuel surcharges on domestic services +20% to +25%. The levy on flights of fewer than 800 km increased to CNY60/$8.04 from CNY50 per ticket, while the fee on flights of 800 km or more, went from CNY80 to CNY100. China raised the domestic price of jet fuel by CNY500 per ton, starting November 1, a move that industry insiders said was the catalyst for the surcharge hike. The fourth quarter is considered the domestic low season. With a fuel price increase of just CNY100 per ton, Air China (BEJ)'s net profit will be cut by -CNY180 billion, while net incomes of China Southern Airlines (GUN), and China Eastern Airlines (CEA) will be reduced by -CNY250 million and -CNY220 million respectively, according to China (CITIC) Securities. Industry analysts predict that Chinese carriers will raise the fuel surcharge on international routes soon.
China expanded its airspace capacity from November 22, by implementing Reduced Vertical Separation Minima (RVSM) in order to be better prepared for next summer's Olympics. Under the new rule, the (CAAC) (CAC) halved the height of each flight layer between 8,900 m and 12,500 m, increasing the number of layers from 7 to 13, and nearly doubling the number of airplanes that can fly through the same area simultaneously. The regulator noted that Sanya, Hong Kong and Taipei are excluded as these cities already have implemented (RVSM).
Chinese carriers welcomed the new policy. "We are pleased that (RVSM) has been adopted, as it can alleviate air traffic congestion and reduce flight delays to improve our efficiency," Air China (BEJ) Public Relations Director, Wang Yongsheng said. China Southern Airlines (GUN) said it is considering the resumption of certain flights that had been cut from the schedule, and adding more frequencies on high-load routes, according to Beijing Brance Co Vice Managing Director, Li Jun. With the expanded airspace capacity, local industry analysts pointed out that fuel efficiency can be improved by +0.7% on routes shorter than 500 nm and +1% on medium/long-haul routes, which will lead to an annual collective profit increase of +CNY400 million/+$54 million for Chinese airlines.
China's government reached agreement with Airbus (EDS) on firm orders for 110 A320 family airplanes and 40 A330s valued at approximately $15 billion, and also signed a Memo of Understanding (MOU) with the manufacturer stipulating that Chinese industry will take a 5% stake in A350 XWB production.
China Southern Airlines (GUN) signed a separate contract for 10 A330-200s. The announcements of the large airplane order and industrial cooperation on the A350 XWB coincided with high-profile meetings taking place in Beijing, between French President, Nicolas Sarkozy and Chinese President, Hu Jintao, both of whom were present for the signing of the (MOU) by Airbus (EDS) (COO), Fabrice Bregier and National Development & Reform Commission (NDRC) Vice Minister, Chen Deming. According to Airbus (EDS), the (MOU) states that Airbus (EDS) and (NDRC) will "carry out high-level industrial cooperation on A350 XWB development and manufacturing work, in order to enhance a closer strategic cooperation relationship between Airbus (EDS) and the Chinese aviation industry. Airbus (EDS) confirms its intent to manufacture 5% of the airframe of the A350 XWB airplanes in China." It added that a joint venture manufacturing plant will be established in Harbin in 2009 with AVIC II subsidiary, Harfei Aviation Industry Co "to produce [A350 XWB] composite material parts and components."
Airbus (EDS) noted that six Chinese manufacturers "are already involved in manufacturing parts, such as wing components, emergency-exit doors and maintenance tools for Airbus (EDS) airplanes." The plane maker also holds a 51% stake in a Joint Venture (JV) A320 Final Assembly Line (FAL) in Tianjin, with first delivery from the (FAL) expected in the second half of 2009. The 160 airplanes ordered raise the possibility that Airbus (EDS) will top rival Boeing (TBC) in 2007 orders, which was not anticipated earlier this year, even by Airbus (EDS) executives with the company in the midst of launching its "Power8" restructuring program. Aside from the 10 A330-200s going to China Southern (GUN), distribution of the other 150 airplanes to Chinese airlines was not revealed, nor is it clear how many of the A320s will come from the Tianjin (FAL).
A319-132 (3311, B-6242), (ILF) leased.
December 2007: China Southern (GUN) flew 6.79 billion (RPK)s passenger traffic in November, up +18.6% from the year-ago month. Capacity rose +10.5% to 8.89 billion (ASK)s, lifting load factor +5.2 points to 76.4% LF.
China Southern Airlines (GUN) announced the launch of a new telephone payment system that will allow customers to book their e-tickets with a (GUN) representative, rather than directly entering their credit card information.
737-71B (35384, B-5251), delivery, A319-132 (3342, B-6243), (ILF) leased, and 2 A330-343Es (879, B-6086, 889, B-6087), deliveries.
Domestic China market share is shown on ATTACHED - "GUN-DOM-MKT-SHARE-DEC07."
January 2008: China Southern Airlines (GUN) flew 6.52 billion (RPK)s passenger traffic in December, a +21.8% increase over the year-ago month. Capacity rose +11.6% to 8.94 billion (ASK)s, driving up load factor +6.1 points to 72.9% LF.
2007 statistics: 81.56 billion (RPK)s passenger traffic +17.3%; +12.9% capacity (ASK)s; +2.8 load factor for 74.5% LF. SEE ATTACHED COMPARISON CHART TO SELECTED OPERATORS - "GUN-2007-STATS."
China Southern Airlines (GUN) deepened its cooperation with Air France (AFA) by signing a memorandum to sell a 20% stake in its Nanlian Air Catering Co to (AFA) subsidiary, Servair for €7.3 million/$10.8 million. Launched in 1989, Nanlian has registered capital of CNY120 million/$16.7 million and previously was held by (GUN) (75%) and Hong Kong Ruilian Investment (HKRI) (25%). In addition to its purchase from China Southern (GUN), Air France (AFA) will take another 5% from (HKRI), giving it a 25% stake in Nanlian. (GUN) Vice Managing Director, Xu Jiezhong said the deal "is just a start in stake cooperation between China Southern (GUN) and Air France (AFA)." The SkyTeam (STM) partners already are codesharing and have linked certain ground handling operations. In addition, (GUN) and (AFA) are planning to launch a cargo Joint Venture (JV). Xu revealed that negotiations are underway and progressing very well, but that "it's not the time to sign a formal agreement right now."
While attempting to hold off Air China (BEJ)'s drive to replace Singapore Airlines (SIA) as a strategic partner and purchase its own sizeable stake, China Eastern Airlines (CEA) found a domestic ally in China Southern Airlines (GUN), with whom it signed a cooperation agreement in Shanghai. The accord outlines a partnership that includes airplane purchasing, ground handling services, marketing and sales, network synergies, loyalty programs and other elements, but does not reference the attempted stake sale to (SIA), nor (BEJ)'s counteroffer. "Our domestic route network is complementary with (CEA)'s, as ours is mainly concentrated in the south, while (CEA) has a broad route network in the east," (GUN) Chairman, Liu Shaoyong said. (CEA) Chairman, Li Fenghua said, "This cooperation can lower both carriers' operating cost and provide better service to passengers." Liu also noted that (GUN) wants to recommend (CEA) as a future member of SkyTeam (STM), which China Southern (GUN) joined two months ago. Industry analysts saw the agreement as a sign that (CEA) and (GUN) intend to compete against Air China (BEJ), rather than cooperate or cede to its apparent "supercarrier" ambitions. "(CEA) has sent a very clear message to (BEJ) that the latter is not its cooperative partner and (CEA) can cooperate with other domestic carriers besides Air China (BEJ)," China Securities Co aviation analyst, Li Lei said. Industrial Securities analyst, Xia Fulu agreed, saying, "If (BEJ) successfully won its (CEA) bid, and gains more control over the latter, then its next target will be China Southern (GUN) . . . That's why (CEA) and (GUN) have vowed to deepen their cooperation now, in order to boost their own growth as they don't want to be merged into (BEJ) in the future."
Singapore Technologies Aerospace said subsidiary ST Aerospace Supplies will open an import, export and logistics facility, Guangzhou Aerospace Technologies & Engineering, to support customers in China and component maintenance-by-the-hour program participants. The 130-sq-m facility includes a warehouse and office at Guangzhou Baiyun. The initial investment is $500,000. Operations will commence immediately.
737-81B (35385, B-5356), delivery.
February 2008: China Southern Airlines (GUN) flew 6.78 billion (RPK)s passenger traffic in January, up +22.1% over the year-ago month. Capacity rose +11.6% to 9.2 billion (ASK)s and load factor lifted +6.3 points to 73.7% LF.
China Southern Airlines (GUN) launched 2x-weekly, Urumqi - Ashgabat with a 737.
China Southern Airlines (GUN) announced sale and leaseback deals covering 10 A330s ordered in December 2005. Eight airplanes now will be owned by and leased from Shenzhen Financial Leasing, with the remaining two owned by HSBC. (GUN) said the deals were "for the purpose of reducing the tremendous need of capital and relieving the pressure on the manufacture and operation of the company caused by the high asset/liability ratio."
March 2008: Hainan Airlines (HNA) is in crisis following the appeal of six pilots (FC) to the Haikou arbitration committee to have their labor contracts terminated. The six resigned at the end of last year, bringing to 20 the number of (HNA) pilots (FC) who have walked out since 2006. The carrier has accepted none of the resignations and their disputes remain unresolved. Luo Zulin, one of the six who asked for arbitration, said the resignations were a result of "frequent overtime" and "long delays in getting their salary." (HNA) is insisting on the validity the contracts and denied Luo's accusation regarding pay. It said that if the committee ruled in the pilots (FC)'s favor, it would request several million yuan in compensation from them and the return of their licenses.
Air China (BEJ), China Eastern Airlines (CEA), Xiamen Airlines (XIA), and Xinhua Airlines (XIH) also have faced labor disputes with resigned pilots (FC), largely because Chinese carriers traditionally cover training expenses that can amount to millions of yuan per pilot (FC). There is considerable reluctance to allow them to transfer to competing carriers.
Under a Pilots Flow Management Proposal policy implemented by (CAAC) (CAC) in 2005, "the potential new employer" of these resigned pilots (FC) must attain the permission of the "old employer" before hiring, then pay compensation of CNY700,000 to CNY2.1 million/$98,300 to $294,800. According to (CAAC) (cac) statistics, China's commercial aviation fleet numbered 1,099 airplanes last September 30 and is expected to rise to 1,250 by 2010, leading to an estimated shortfall of -200 pilots (FC) annually.
In order to make up the severe shortage, carriers are beginning to follow the internationally common practice of recruiting privately trained pilots (FC). China Southern Airlines (GUN) started the trend last May, announcing its plans to recruit 100 such pilots (FC). Sichuan Airlines (SIC) followed three months later, hiring 50 private pilots (FC). Spring Airlines (CQH), East Star Airlines (ESR), and United Eagle Airlines (UEG) have disclosed their interest in recruiting such pilots (FC).
China Southern Airlines (GUN) will double its 2x-weekly, Beijing - Tehran service to 4x-times-weekly from March 31. The route is operated with an A330-200.
China Southern Airlines (GUN) will shift its priorities from its traditional focus on domestic routes to a more ambitious commitment to international expansion, Chairman, Liu Shaoyong said. Last year, (GUN) opened 10 new international routes from Guangzhou. "We plan to open more international routes starting from Beijing to New York, London, and Detroit, [plus] Guangzhou - Moscow by 2012," Liu revealed. He claimed that (GUN)'s cargo business also will grow significantly. "I expect our cargo transport volume will increase threefold in the next few years," he said. (GUN) will have exclusive use of the new domestic cargo station at Guangzhou Baiyun, once it is complete. In addition, the carrier plans to reconfigure its first A300-600 into a freighter set to go into operation this year. It continues to negotiate a cargo Joint Venture (JV) with Air France (AFA). A source familiar with the discussions said that "it is possible it will be launched in May." The (JV) may lead to a deeper cooperation between the carriers down the road. (GUN) Deputy Public Relations Director, Yang Defeng said that "introducing a foreign strategic investor" is on the radar, although the "potential candidate has not been fixed." China Securities Co aviation analyst, Li Lei pointed out that SkyTeam (STM) ally (AFA) is the most likely partner, as the relationship between the pair deepens. (GUN) signed a January memorandum to sell a 20% stake in its Nanlian Air Catering Co to (AFA) subsidiary, Servair and Vice Managing Director, Xu Jiezhong said the deal was "just a start in stake cooperation" between the airlines.
China Southern Airlines (GUN) and Malaysia Airlines (MAS) signed an expanded codeshare agreement in Guangzhou that will include sales of tickets by each carrier for travel to regional destinations in the other country. (GUN) began codesharing with (MAS) in November on routes to Kuala Lumpur from Beijing, Shanghai, and Guangzhou. "We can expand our route network from Kuala Lumpur to other cities in Malaysia , as well as facilitate Malaysian passengers to reach our more than 100 Chinese domestic destinations," (GUN) Chairman, Liu Shaoyong said at the signing ceremony.
A330-343E (908, B-6098), delivery.
April 2008: Driven by strong domestic demand and yuan appreciation, China Southern Airlines (GUN) increased its full-year earnings nearly tenfold in 2007, reporting a +CNY1.871 billion/+$267.1 million profit compared to +CNY188 million the previous year. Operating revenue climbed +18.2% to CNY55.87 billion. (GUN) said the "fast-growing Chinese economy" was the chief driver, although it also credited its "strategic transformation from a point-to-point operation to a hub-and-spoke operation" for the impressive result. Operating expenses grew +16.1% to CNY47.38 billion, owing to landing fee increases and airplane depreciation/lease expenses. Fuel accounted for 38.9% of costs, up +13.1 points. Passenger boardings rose +15.6% to 56.9 million, and average load factor improved +2.8 points to 74.5% LF. Cargo traffic increased +6.5% to 872,000 tonnes.
(GUN) continued the momentum in the 2008 first quarter with a +CNY796 million profit despite the CNY200 million hit it took because of heavy snowstorms in central and southern China in February. It reported a -CNY188 million loss in the first three months of 2007. Revenue rose +20.4% to CNY14.31 billion.
Looking ahead, (GUN) expects to benefit from "continuous robust domestic demand" and said it remains committed to its double-hub strategy centered on Beijing and Guangzhou. It is targeting a +8.8% increase in passengers to 61.8 million this year.
It also upped its commitment to Xiamen Airlines (XIA), in which it is the majority shareholder with 60%, approving the purchase of 20 737s. Based on a statement filed with the Shanghai Stock Exchange, the new airplanes will cost less than the catalog price of $1.5 billion and will be delivered from April 2014 to October 2015.
Chinese mainland carriers are preparing for commercial flights across the Taiwan Strait to be permitted before year end, as the newly elected President of Taiwan, Ma Yingjiu, has promised. Ma will take office on May 20, and said he plans to allow the launch of weekend charter flights across the strait in July, followed by daily scheduled flights before 2009.
According to China International Capital Corp (CICC), mainland carriers see "big market potential" across the strait. The route is expected to contribute more than CNY5 billion/CNY714.2 million to the collective annual net profit of mainland airlines.
News reports out of Taiwan said that Air China (BEJ) plans to take the lead and establish a branch office on the island after Ma assumes the presidency. (BEJ) did not confirm, but did stated that "all mainland carriers are preparing for launching the cross-strait flights."
(CICC) noted that China Eastern Airlines (CEA) will benefit most from the flights as 35% of the Taiwanese population living on the Chinese mainline resides in Shanghai and the neighboring Jiangsu Province. China Southern Airlines (GUN) should reap more benefits than (BEJ) as well, according to (CICC), as it holds a 60% stake in Xiamen Airlines (XIA). A quarter of the mainland's Taiwanese population lives in the Pearl River Delta region and another 10% in nearby Fujian Province.
Air China (BEJ) holds a 17.5% stake in Cathay Pacific Airways (CAT) and a 51% stake in Air Macau (MCU). Those two carriers will be impacted by the liberalization, especially (CAT), which connects Taiwan to both the mainland and Europe through Hong Kong.
China Southern Airlines (GUN) expects to open 7 to 8 new international routes this year, expanding on a plan that saw it open 10 new foreign destinations in 2007. This year's routes will originate mostly in Guangzhou and serve neighboring countries in Southeast Asia, in addition to a London flight, scheduled to start in the fourth quarter, Chairman, Liu Shaoyang said. (GUN) aims to increase the percentage of its revenue derived from international operations from the current 19% to 25% to 30% in the next five years, while expanding its fleet from 332 airplanes at December 31, 2007, to 400 by 2010.
However, domestic consolidation likely is necessary to maximize international competitiveness, Liu said. He said Beijing is considering a reorganization of the domestic airline industry, but a decision will not be made this year as carriers concentrate on August's Olympic Games. Last month he proposed a China Air Holding Co that would hold stakes in (GUN), Air China (BEJ), and China Eastern Airlines (CEA) and also would "be able to make investments in foreign carriers, as well as conduct internal integration." He said (GUN) is negotiating details with (CEA) on implementation of a January cooperation agreement, that covers joint airplane purchasing, ground handling, marketing and sales, network synergies, loyalty programs, and other elements. It is scheduled to enter effect this year.
China Southern Airlines (GUN) will sell and lease back five A321-200s in order to reduce its high debt ratio, it said in a filing with the Shanghai Stock Exchange. The airplanes are part of an order for 50 Airbus (EDS) narrowbodies placed in summer 2006. (GUN) said it will transfer ownership of three airplanes to China Aircraft Leasing Co (CALC) and two to Shenzhen Financial Leasing Co (SFLC). Last year, it struck a similar deal with the two lessors, selling two A321-200s to (CALC) and one to (SFLC).
3 A321-231s (3459, B-6342; 3493, B-6343; 3507, B-6339), deliveries.
June 2008: China Southern Airlines (GUN) signed a framework agreement with Air France (AFA)/(KLM) to launch a cargo joint venture (JV), (GUN) President, Liu Shaoyong said at the (IATA) (ATA) Annual General Meeting (AGM) in Istanbul. "The new cargo (JV) will be named "AE Cargo" and is expected to go into formal operation next year and operate 10 airplanes, including 747s and 777s, at the initial stage," Liu revealed. "AE" stands for "Asia Europe." He said (GUN) will hold a 75% stake in the new entity, while (AFA)/(KLM) will hold the rest but refused to reveal the exact amount of (GUN)'s investment.
Although Chinese carriers have just 24% of the domestic cargo market compared to foreign competitors, Liu is confident that "AE" will be better positioned as "the operating efficiency can be enhanced greatly through (GUN)'s cooperation with (AFA)/(KLM)." He said (GUN) will ask (AFA)/(KLM) to nominate a (CEO) candidate.
Liu said that he expects (GUN) to post a profit this year despite the current industry environment. "We have done pretty well in cost savings and we successfully saved about -CNY1 billion in our operating expenses last year. This year we plan to phase out 12 MD-82s to improve the fuel efficiency and realize further cost controls," he explained.
He also revealed that the Guangzhou-based carrier is considering the introduction of a strategic investor but "no proper candidate has been identified."
China's airlines are moving to upgrade their fleets and cut international flights to mitigate the impact of skyrocketing fuel costs. China Southern Airlines (GUN) President, Liu Shaoyong said that the carrier plans to phase out 12 MD-80s in October, with the aim of improving fuel efficiency. In addition, it cut some international flights on June 1, particularly Southeast Asia routes from Guangzhou that an industry analyst said "are mainly focused on tourists [and] make less profit." In addition to these measures, Chinese carriers have raised fuel surcharges on international routes, including a +33% increase by (GUN).
Airlines are concluding preparations for the launch of commercial charter flights across the Taiwan Strait, which are expected to start July 4, after an agreement between the Strait Exchange Foundation (Taipei) and the Association for Relations Across the Taiwan Strait (Beijing) was signed in Beijing. The deal allows for 18 direct flights across the strait each weekend (including Fridays). Taiwan will have access to Beijing, Shanghai, Guangzhou, Xiamen, and Nanjing, with future flights to Chengdu, Chongqing, Hangzhou, Dalian, Guilin, and Shenzhen under consideration. In turn, mainland Chinese carriers will be able to fly to Kaohsiung, Taipei, Taichung, Matsuyama, Penghu, Hualien, Kinmen, and Taitung. The agreement calls for negotiations on regularly scheduled direct flights to start "as soon as possible." Both parties agreed to discuss cargo charters in the next three months.
Passengers currently traveling between the Chinese mainland and Taiwan must transfer in Hong Kong, which typically adds 4 to 5 hoursd to the trip. The cross-strait flights also will help reduce operating costs and expand markets, which is important especially for struggling Taiwanese airlines suffering from fuel price hikes and fierce competition from high-speed rail.
Air China (BEJ) VP Zhang Lan said that the Beijing-based carrier will operate five airplanes to Taiwan. (BEJ) noted that "everything is ready now" and it planned to send a delegation to Taipei to conduct operational integration with China Airlines (CHI) and (EVA) Air.
China Eastern Airlines (CEA) plans to establish offices in Taipei and Kaohsiung. The Shanghai-based carrier sent a delegation led by Managing Director, Cao Jianxiong to Taiwan to discuss ground handling, Maintenance Repair & Overhaul (MRO), and other operational necessities.
China Southern Airlines (GUN) announced that it will sign a strategic agreement with (CHI) on June 23 to address both carriers' full-scale cooperation on cross-strait flights. (GUN) said it has concluded all its preparations.
The Chinese government raised the domestic fuel price more than +25% to CNY7,450/$1,082 per ton, which China Securities aviation analyst Li Lei reported would lead to a +CNY3.6 billion increase in annual expenses for China Southern Airlines (GUN) - - which operates the largest domestic network - - a +CNY1.8 billion rise for Air China (BEJ), +CNY2.2 billion for China Eastern Airlines (CEA), and +CNY700 million for Hainan Airlines (HNA). However, Li said the increase will not have a significant influence on second-quarter financial performance, as yuan appreciation will continue to drive profits. However, he said the second-half outlook is "less optimistic," owing to fuel costs and "declining" domestic demand. Airlines plan to follow their fuel surcharge increase on international routes with a domestic increase. (GUN) Chairman, Liu Shaoyong said that (GUN), (BEJ) and (CEA) applied for the right to boost domestic charges by +33.3% to CNY80 on routes shorter than 800 km and by +50% to CNY150 on longer flights.
July 2008: China Southern Airlines (GUN) plans to reduce the pay of all executives, including Chairman, Liu Shaoyong, by -10% in an effort to cut its operating expenses by -CNY1.3 billion/-$190.3 million by year end. The domestic fuel price has risen to CNY8,720 per ton, nearly four times greater than in 2005. The increase has hit (GUN) the hardest, as it operates the greatest number of domestic routes. Although the Guangzhou-based carrier raised its fuel surcharges this month, it still expects fuel expenses to increase by +CNY1.86 billion this year. Confronted with surging fuel prices and weakening market demand, (GUN) noted in a statement that it would cut -CNY800 million from infrastructure investment this year and save another -CNY 500 million through fuel savings, optimizing capacity and sales promotions.
Guangzhou-based, China Southern Airlines (GUN) is expected to be the first Chinese mainland carrier to operate a charter flight across the Taiwan Strait, with Taiwan's China Airlines (CHI) following suit later from Taipei to Shanghai.
The first weekend of charter flights across the Taiwan Strait concluded with 11 carriers having offered services, which many regard as an important step toward the opening of scheduled flights between the Chinese mainland and Taiwan. The 11 airlines are Air China (BEJ), China Southern Airlines (GUN), China Eastern Airlines (CEA), Hainan Airlines (HNA), Shanghai Airlines (SHA), Xiamen Airlines (XIA), China Airlines (CHI), Mandarin Airlines (MDN), TransAsia Airways (FSH), Uni Air (MAK), and (EVA) Air.
Taiwanese aviation authorities reported that six airports handled 72 flights transporting 12,000 passengers July 4 through 7. Taipei Taoyuan handled 32 flights, followed by Taipei Songshan with 26. Makung (six), Kaohsiung (four), Taichung (two), and Hualien (two) handled the remainder. Corresponding statistics for the mainland were unavailable, but the (CAAC) (CAC) noted that there will be 144 roundtrip flights across the strait this month. Mainland carriers expect the flights to provide a new growth point as they have experienced slowing increases in demand, especially in May, when passenger volume dipped 1.1% year-over-year, the first decrease since 2003.
(GUN) Chairman Liu Shaoyong, who was aboard the inaugural A330 flight to Taipei, called the current allowance "too little" and said that "daily regular direct flights [without having to overfly Hong Kong] should be realized as soon as possible."
China Airlines (CHI)'s former Chairman, Zhao Guoshuai, who resigned this week, agreed with Liu. He argued that "it is far from enough to operate only 72 charter flights every weekend." He expressed confidence that the flights "will exert a positive effect on China Airlines (CHI)" as the mainland is a new market for the Taipei-based carrier.
Meantime, (CEA) already has established an office in Taipei. According to Managing Director, Cao Jianxiong, the Shanghai-based carrier plans to recruit staff and cabin crew in Taiwan in the future while (CHI) and (EVA) act as agents for ticket sales.
Chinese carriers were dealt another blow to their bottom lines this month as authorities decided to raise the jet fuel price by +CNY720/+ $104.83 per ton.
Air China (BEJ) Board Secretary, Huang Bin confirmed that the increase took effect on July 1. It is the third time fuel prices have gone up this year following a +CNY210 per ton increase in the first quarter and a +CNY1,500 hike on June 20. China's quarterly adjustment of jet fuel prices traditionally takes import costs into consideration, which largely has shielded airlines from the soaring international oil prices over the past two years.
CITIC Securities Company aviation analyst, Ma Xiaoli said he expects China Southern Airlines (GUN) will be hit hardest by the domestic increase as it flies the largest number of domestic routes. According to his estimate, (GUN) faces a reduction of -CNY250 million in marginal profit for every +CNY100 increase in the cost of jet fuel, while China Eastern Airlines (CEA)'s bottom line would sink by -CNY220 million and Air China (BEJ)'s would drop by -CNY180 million.
To mitigate rising fuel expenses, Chinese carriers collectively approved an increase in domestic fuel surcharges beginning July 1. In addition, (BEJ), (GUN), Shanghai Airlines (SHA), and Hainan Airlines (HNA) will raise surcharges on international routes.
(CEA) Board Secretary, Luo Zhuping said that while higher surcharges are helpful, "The shrinking market demand is a bigger blow for airlines than the surging fuel price. If fuel surcharges keep on rising, it will impact the market demand to reduce further, which will lead to a drop in airfares."
Huang shares the same view. He said that (BEJ) will be cautious as "the company has to take market tolerance into account." In the meantime, Morgan Stanley analyst, Edward Xu wrote in a research note that Chinese carriers will report poor traffic data for June.
(CFM) International said China Southern Airlines (GUN) chose (CFM56-5B)s to power 20 A320s on order. The agreement includes a long-term material services agreement.
China Southern Airlines (GUN) announced its intention to sell 12 MD-82s and four 777-200s.
August 2008: July total passengers down -2% (year/year).
China Southern Airlines (GUN) posted a net loss of -CNY1.17 billion/-$169.7 million in the first six months of 2008, a significant reversal from the +CNY62 million/+$33 million earned in the year-ago period. Operating revenue climbed +9.1% year-over-year to CNY26.78 billion against a +14% increase in operating expenses to CNY28 billion. (GUN) cited "various unfavourable factors including the USA subprime mortgage crisis, ballooning inflation, stringent [domestic] monetary policies and natural disasters" as causes for the slower-than-expected market demand that impacted its results. Domestic traffic grew +6.8% to 33.72 billion (RPK)s on a +5.1% increase in capacity to 44.9 billion (ASK)s, producing a load factor of 75.1% LF, up +1.2 points. Hong Kong and Macau traffic dipped -7.9% to 548 million (RPK)s on a -6.9% fall in capacity to 888 million (ASK)s. Load factor slipped -0.7 point to 61.7% LF. International traffic climbed +10.8% to 6.23 billion (RPK)s on an +8.5% lift in capacity to 9.65 billion (ASK)s, raising load factor +1.3 points to 64.6% LF. Passenger boardings increased +5.7% to 28 million and cargo volume rose +6.2% to 428,000 tonnes. Looking ahead, (GUN) Chairman, Liu Shao Yong expects the carrier "to undergo a long period of hardship," owing to the combined burdens of "insufficient market demand, fierce competition and high oil prices." To survive, the airline vowed to "rationally deploy its transportation capacity, optimize its route structure, strengthen marketing and sales efforts, and raise revenues from first (F) and business class (C) cabins, as well as reducing production costs and the scale of infrastructure investment."
Chinese carriers continued to suffer falling passenger demand in July. Air China (BEJ)'s (RPK)s traffic decreased by -8.4% from the year-ago month, while passenger boardings fell -6.8% to 3 million, and load factor plunged -8.1 points to 73.3% LF. China Southern Airlines (GUN)'s (RPK)s slid -4.2% year-over-year, and load factor dipped -1.4 points to 75.1% LF. It is noteworthy that (BEJ)'s and (GUN)'s international (RPK)s dropped -13.7% and -13.3%, respectively, mainly owing to heightened security measures related to the Beijing Olympics and slowing global demand. (GUN) cut its international capacity -14.2% (ASK)s last month. Competitors are expected to report similar results. As July traditionally is the peak travel period in China, industry analysts pointed out that the decline in demand will have a significant impact on full-year performance.
Airlines on both sides of the Taiwan Strait want to launch weekday services, as weekend charter flights linking the Chinese mainland and Taiwan reached the one-month mark. "Judging from the one-month results, the weekend charter flights are indeed widely welcomed by people on both sides of the strait," (EVA) Air Vice General Manager, Nieh Kuo-wei told Chinese state news agency "Xinhua." Cross-strait charter flights kicked off on July 4 under an agreement signed by the China-based Association for Relations Across the Taiwan Strait and the Taiwan-based Straits Exchange Foundation. According to "Xinhua," there have been 144 roundtrip flights carrying some 53,000 passengers over the last four weekends. The average load factor is reported to be 87% LF.
Airlines on both sides of the Taiwan Strait carried 95,765 passengers across the strait with an average load factor of 87% LF over the seven weeks ended August 18, according to Taiwanese authorities. Taiwan Civil Aviation Chief, Li Long Wen told media that cross-strait routes are among the few profitable services operated by Taiwanese carriers. The Shanghai route reported the highest load factor at 92.3% LF, followed by 85.4% LF for Xiamen, 82.8% LF for Guangzhou, 78.7% LF for Beijing, and 77.3% LF for Nanjing. Owing to the strong traffic to Shanghai, China Eastern Airlines (CEA), Shanghai Airlines (SHA), China Airlines (CHI), and (EVA) Air have raised the business class (C) fare on the route to CNY6,500 from CNY5,500.
A330-343E (908, B-6115), delivery, ex-(F-WWYF).
September 2008: Air China (BEJ) and China Southern Airlines (GUN) both endured double-digit year-over-year traffic declines in August, and while some of the drop can be attributed to heightened security related to the Beijing Olympics, slowing domestic economic growth likely portends a poor full-year 2008 traffic and financial performance for Chinese carriers. (BEJ)'s overall passenger traffic plummeted -16.3% year-over-year in August to 5.26 billion (RPK)s on a capacity decrease of -0.9% to 7.4 billion (ASK)s. Its load factor of 71.1% LF was down by -13 points. Passenger boardings dropped -16.6% to 2.77 million, while cargo volume fell -4.1%. Similarly, China Southern (GUN) suffered a sharp decline in August, as passenger boardings plunged -16.2% to 4.99 million, with load factor at 71.2% LF, down -8.7 points from last year and a new low for 2008.
Spring Airlines (CQH) Chairman, Wang Zhenghua said he is optimistic that domestic demand will rebound in September and October, a view that is not widely shared. But even he commented that this month and next provide the only opportunity for carriers to improve their domestic traffic performance this year.
China Eastern Airlines (CEA) has not yet released its traffic statistics for August, but in contrast to Wang, (CEA) Board Secretary Luo Zhuping expressed pessimism regarding the remainder of 2008. "The biggest problem we are facing now is the continuous decline of domestic demand. The winter is coming and uncertain economic prospects make it difficult for domestic demand to rebound in the short term."
Shenyin Wanguo Securities, Aviation Analyst, Li Shurong agreed with Luo, pointing out that "high domestic fuel prices show little possibility [of falling] for the time being and the slowdown of yuan appreciation, and continuous decline of domestic demand are expected to exert a negative impact on Chinese carriers." China International Capital Corp predicted that "excepting Air China (BEJ), most [of China's] carriers [including] China Southern (GUN), China Eastern (CEA), Hainan Airlines (HNA), and Shanghai Airlines (SHA) will post a full-year net loss in 2008."
Second quarter (Q2) financial results = net profit of +$23 million (thanks to large foreign exchange gains) and an operating loss of -$188 million.
SkyTeam (STM) is offering discounted multi-trip passes for travel within China.
(GUN) is providing loan guarantees to pilot (FC) students funding their own training.
October 2008: China Southern Airlines (GUN) reported a -CNY810 million/-$118 million net loss for the third quarter, joining "big three" rivals Air China (BEJ) and China Eastern Airlines (CEA) deep in the red. (BEJ) and (CEA) earlier reported -CNY1.9 billion and -CNY2.33 billion three-month losses, respectively. China Southern (GUN)'s operating revenue dropped -11.6% year-over-year to CNY14.59 billion against a +14.2% increase in expenses to CNY14.07 billion.
Declining domestic demand and higher fuel prices hit the trio hard, and (CEA) is on the brink of financial crisis as its debt ratio has risen to 98% with total capital of CNY7.55 billion and debt of CNY7.43 billion. It plans to cut long-haul flights, reduce salaries across the board and postpone airplane deliveries in order to stem the losses, and Board Secretary, Luo Zhuping admitted that the 2009 second quarter is (CEA)'s earliest possible turnaround.
Talk of financial help from the government has increased, and an industry insider who requested anonymity said that "the (CAAC) (CAC) is working hard on helping China's three major carriers obtain a capital injection from Beijing as they requested."
(GUN) Chairman, Liu Shaoyong appealed for help as soon as possible, similar to "what Beijing did for state-owned commercial banks." (CEA) sought government money as early as last year, when it reached its ill-fated strategic cooperation agreement with Singapore Airlines (SIA). That deal called for (CEA) to circulate additional shares for the Chinese government as well as (SIA) and Temasek, which analysts noted was a way for the Shanghai-based airline to secure funding from Beijing.
November 2008: China Southern Airlines (GUN) and China Eastern Airlines (CEA) have started to ground airplanes and cut flights as there is little sign of a recovery in the slumping domestic market.
According to the (CAAC), Chinese carriers again suffered from falling demand last month, despite the "golden week" travel period surrounding October 1 National Day. Passenger load factor fell -2.2 points year-over-year to 76.9% LF, while daily airplane utilization was down -2.1% to 9.2 hours. (GUN) 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 airplanes in secondary domestic markets.
The difficulty facing Chinese carriers again has raised the possibility of consolidation. (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.
Hit hard by the continuous decline of the domestic market, China Southern Airlines (GUN) parent, China Southern Group, and China Eastern Airlines (CEA) parent, China Eastern Group are expecting their requests for government aid to be approved. An industry source said that Beijing is expected to inject +CNY3 billion/+$439 million into each airline, allowing China Eastern (CEA) to reduce its net debt ratio to 94.7% from 98%, and China Southern (GUN) to reduce its net debt ratio to 80.5% from 83%.
(GUN) Chairman, Liu Shaoyong had made numerous appeals for up to CNY40 billion in financial aid from Beijing. The carrier reported a -CNY810 million third-quarter loss. (CEA) posted a -CNY2.33 billion loss in the quarter.
Meantime, Air China (BEJ) parent, (CNAC) also reportedly is seeking government capital. (BEJ) reported a -CNY1.9 billion loss in the third quarter.
The dream of a direct routing across the Taiwan Strait is closer to reality following the signing of an agreement between Beijing's Association for Relations Across the Taiwan Strait and Taipei's Strait Exchange Foundation. The deal, which will take effect in 40 days, will allow carriers to bypass Hong Kong airspace and reduce flight time, operating costs, fuel burn, and emissions.
Taiwanese carriers will have access to 16 cities in mainland China in addition to Beijing, Shanghai, Guangzhou, Xiamen, and Nanjing. They are Chengdu, Chongqing, Hangzhou, Dalian, Guilin, Shenzhen, Wuhan, Fuzhou, Qingdao, Changsha, Haikou, Kunming, Xi'an, Shenyang, Tianjin, and Zhengzhou. The number of permitted weekly roundtrip flights will rise from the current 36 to 108.
Mainland carriers welcomed the move. The agreement allows 60 return cargo flights per month operated by 2 - 3 mainland and 2 - 3 Taiwanese airlines. Mainland carriers will have access to Taipei and Kaohsiung, while their counterparts will fly to Shanghai and Guangzhou.
Nine mainland Chinese carriers were selected to operate weekday flights across the Taiwan Strait and are expected to launch service on December 15, according to the (CAAC) (CAC). In addition to Air China (BEJ), China Eastern Airlines (CEA), China Southern Airlines (GUN), Hainan Airlines (HNA), Xiamen Airlines (XIA), and Shanghai Airlines (SHA), which all already operate weekend cross-strait flights, Sichuan Airlines (SIC), Shandong Airlines (SHG) and Shenzhen Airlines (SHZ) were tapped to operate the weekday flights.
Mainland carriers are permitted to operate 54 weekday flights per week. According to the (CAAC) (CAC), (BEJ) will operate 10 while 12 have been allotted to (CEA), 10 to (GUN), five to (HNA), six to Xiamen (XIA), and five to (SHA). Sichuan (SIC), Shandong (SHG), and Shenzhen (SHZ) each have been granted permission to operate two weekly weekday flights.
Regarding cross-strait cargo flights, (CEA) subsidiary, China Cargo Airlines (CKK), China Southern Airlines (GUN), and Air China Cargo (CAO) have been selected. China Cargo Airlines (CKK) and (GUN) each are expected to operate 10 monthly flights from Shanghai and Guangzhou respectively, while Air China Cargo (CAO) is expected to operate five monthly flights from both Shanghai and Guangzhou.
China Southern Airlines (GUN)'s parent, China Southern Air Holding is acquiring 40% of the state-owned company that operates Shenyang airport in northeast China. China Southern Air Holding has entered into an agreement with the Liaoning Provincial Government to acquire the 40% stake in Liaoning Airport Management Group. Liaoning Airport Management Group's main asset is Shenyang airport, where China Southern (GUN) already has extensive operations. (GUN) boosted its presence in the city several years ago when it acquired Shenyang-based, China Northern Airlines (CNA). (GUN)'s parent says it plans to invest 10 billion yuan/$1.5 billion) in Liaoning Airport Management Group to expand Shenyang airport. A new terminal will be built and (GUN) will open new international routes from the city over the next five years, it adds.
December 2008: China Southern Airlines (GUN) received notice that China's Ministry of Finance agreed to inject CNY3 billion/$438.9 million in the carrier's holding company, it said in a filing with the Stock Exchange of Hong Kong. China's beleaguered national carriers have been appealing to the government for aid. Trading in (GUN) shares was suspended November 26 to 27. Trading in China Eastern Airlines (CEA) also was suspended, although no government aid was announced.
(GUN) recently announced plans to invest CNY10 billion over the next 3 to 5 years to enhance its position in Liaoning Province in northeast China. The provincial government will transfer its 40% stake in Shenyang Taoxian International airport (SHE) to (GUN), which will commit to upgrading the facility into a hub by 2020. In the short term, it will expand (SHE)'s terminal and launch 5 to 8 international routes in the next 3 to 5 years. (GUN)'s Northern Branch Company, based at (SHE), currently operates 24 airplanes on approximately 70 routes.
China Southern Airlines (GUN) Group Chairman, Liu Shaoyong was appointed as the new Chairman of (CEA) parent China Eastern Air Holding Co, appearing to pave the way for the merger of (CEA) and Shanghai Airlines (SHA). In an effort to boost Shanghai's status as an international aviation hub, the State-owned Assets Supervision and Administration Commission of the State Council, (CEA)'s controlling shareholder, reached agreement with the State-owned Assets Supervision and Administration Commission of the Shanghai Municipal Government, (SHA)'s controlling shareholder, on the merger of the two Shanghai-based airlines, an industry insider said. Key details on how the combination will move forward remain undecided, but Liu is expected to be Chairman of the merged carrier. The government's plan to revive (CEA) includes a change in leadership in advance of any consolidation. The (CAAC) (CAC) supports domestic consolidation. Among the measures announced as part of its effort to bolster the flagging Chinese airline industry was its promise to "support mergers and consolidation" when such combinations would improve management levels and enhance international competitiveness. Beijing also is considering injecting CNY28 billion/$4.08 billion in both (GUN) and (CEA) in addition to the CNY3 billion it already has granted each carrier.
Meantime, SASAC named Air China (BEJ) parent, China National Aviation Holding Co (CNAC) VP, Ma Xulun as (CEA)'s new CEO. He succeeds Cao Jianxiong, who is expected to be (CNAC)'s new VP. (GUN) Party Secretary, Li Wenxin will be responsible for the Guangzhou-based carrier until a new Chairman is appointed.
The Chinese government cut the domestic fuel price -32% to CNY5,050/$736.49 per ton from CNY7,450, marking the sixth time this year, Beijing has adjusted the domestic price. Because of the way in which fuel prices are managed by the government, Chinese airlines have not reaped the immediate benefit of the collapse in oil prices. Fuel expense currently accounts for 40% to 50% of Chinese carriers' total operating expenses. China Southern Airlines (GUN) is expected to benefit most from the new cut as it has the largest number of domestic routes, comprising 80% of its total. According to Shenyin Wanguo Securities Aviation Analyst, Li Shurong (GUN) will save about -CNY5.8 billion in fuel costs annually. China Eastern Airlines (CEA) is expected to save -CNY3 billion, while Air China (BEJ) can save -CNY3.7 billion, as its domestic routes account for only 50% of its total. The (CAAC) (CAC) also cut fuel surcharges on domestic routes by a large margin.
Panasonic Avionics Corp will provide (GUN) with its eX2 In-Flight Entertainment (IFE) system on five A380-800s. First delivery is slated for 2009.
January 2009: China Southern Airlines (GUN) announced that it transported 59.8 million passengers last year, up +16% from 2007, while its cargo volume climbed +6.5% to 870,000 tons.
(GUN) expects to report a full-year loss despite the fact that it was able to maintain profitability on its fuel hedges. (GUN) noted that "the drastic decrease in air transportation demand impacted by a notable slowdown in domestic economic growth" and "high domestic fuel prices" are to blame for the result, which would have been worse had it not suspended its fuel hedge contract. Newly appointed Chairman, Si Xian Min, who was General Manager when predecessor, Liu Shaoyong was transferred to (CEA), told "Reuters" that he expects 2009 also will be difficult and that the airline industry could recover in the second half of this year. (GUN) posted a net profit of +CNY1.85 billion/+$270.3 million in 2007.
(GUN) posted a +$6.3 million gain on its fuel hedges in 2008, becoming the only Chinese carrier to avoid the impact of last year's wildly fluctuating oil prices. (GUN) suspended its hedging contract in September.
International routes comprise just 20% of (GUN)'s total, less than that of rivals Air China (BEJ) and China Eastern Airlines (CEA), which also helps insulate the carrier from the volatile international fuel market. Chinese airlines are allowed to hedge only their international flights. The government controls the price of fuel used on domestic routes.
(BEJ) had suffered a -CNY3.1 billion/-$453.1 million loss on its fuel hedge contract as of October 31 and reported a -$5.9 million paper loss in November, while (CEA) posted a -$420,000 cash loss on its hedges in November following a CNY1.83 billion write down the prior month. Shanghai Airlines (SHA) reported a -CNY1.1 million cash loss as of October 31 on its hedges.
(BEJ) parent China National Aviation Holding Company (CNAC) intends to take over struggling Wuhan-based, East Star Airlines (ESR) in an effort to expand its foothold in central China. (BEJ) said in a statement that (CNAC) "has had an initial discussion with (ESR) about purchasing its shares," without revealing how much (CNAC) was planning to buy. There has been no formal agreement.
Industry analysts noted that (BEJ) would enhance its position in the region through an acquisition of (ESR), as (BEJ) does not operate a base at Wuhan, the capital of Hubei Province. China Southern Airlines (GUN) and China Eastern Airlines (CEA) do operate bases there, with (GUN) grabbing 40% of the Wuhan market and (CEA) plus (ESR) holding more than >20% and >10%, respectively. (BEJ) accounts for only 5%.
A321-231 (3764, B-6389), delivery.
February 2009: Travelport Global Distribution System (GDS) reached content distribution agreements with Xiamen Airlines (XIA), China Southern Airlines (GUN), and China Eastern Airlines (CEA) to provide Galileo, Apollo and Worldspan subscribers with access to international fares and inventory via its (GDS) technology.
A321-231 (3784, B-6397), delivery.
March 2009: China Southern Airlines (GUN) expects its 2008 net loss to be worse than previously expected, owing largely to its decision to retire older airplanes whose value continues to decrease in the current economic downturn. It said in a filing to the Shanghai Stock Exchange that the impairment "will, to some extent, have a negative impact on the 2008 financial results of the company." (GUN) warned in January that it expects to report a full-year loss owing to "the drastic decrease in air transportation demand impacted by a notable slowdown in domestic economic growth" and "high domestic fuel prices." It is expected to release the 2008 result next month. Citibank has predicted that (GUN) will post a -CNY1.7 billion/-$248.2 million loss. It earned a +CNY1.85 billion profit in 2007.
New (GUN) Chairman, Si Xian Min noted last month that the company will "try every means to make a turnaround this year."
1st 747F delivery - - SEE PHOTO - - "GUN-747F-2009-03."
A319-132 (3828, B-6183), delivery.
April 2009: China Southern Airlines (GUN) flew 7.29 billion (RPK)s traffic in March, up +4.8% year-over-year. Capacity climbed +3.3% to 9.65 billion (ASK)s, lifting load factor +1.1 points to 75.6% LF.
(GUN) suffered another record passenger decline in March, a -23% year-over-year plunge to 1.3 million.
(GUN) reported its first full-year loss in three years, a -CNY4.82 billion/-$704.1 million deficit that represented a reversal from the +CNY1.84 billion profit reported in 2008. (GUN) had warned last month that its loss would be deeper than expected, and a +1.6% year-over-year rise in revenue to CNY54.40 billion was not nearly enough to offset high fuel prices, the spring Sichuan earthquake, slowing demand and impairment charges related to retired airplanes. In a filing cited by both Dow Jones and "Bloomberg News," (GUN) reported a +1.8% lift in (RPK)s traffic to 83.18 billion and a +2.3% increase in passenger numbers to 58.2 million.
(GUN) reported a +CNY222 million/+$32.5 million first-quarter profit, down -71.3% from the CNY796 million earned in the year-ago period, on a -9.4% decrease in operating revenue to CNY12.93 billion. Ex-special items, (GUN) had a +$47 million net profit (-$124 million). Operating expenses climbed +3.3% to CNY13.71 billion, and analysts credited "the return of a CNY1.07 billion aviation construction fund" for the profit. Foreign exchange losses played a role in the year-over-year decrease. (GUN) did not release further figures. Chinese airlines are expected to report a collective profit of +CNY1.78 billion for the quarter. Air China (BEJ) already has announced a +CNY981.2 million profit.
The Chinese commercial aviation industry is expecting a turnaround in the recently completed quarter.
(GUN) announced an agreement with China Construction Bank including a CNY20 billion line of credit. Chairman, Si Xian Min said, "In face of the current global economic downturn and waning demand, (GUN) still recorded steady growth in passenger traffic in first quarter 2009. (GUN) expects this new bank-enterprise cooperation to bolster its business and bring new possibilities."
Airlines on either side of the Taiwan Strait are expected to reap further benefits following the recent signing of an expanded agreement by the Taipei-based Strait Exchange Foundation and the Beijing-based Association for Relations Across the Taiwan Strait that will more than double the number of permitted flights. Direct cross-strait flights will be increased from the current 108 per week to 270. The increase likely will take affect in July. In addition, Taiwanese carriers will be granted access to six new cities - - Hefei, Harbin, Nanchang, Guiyang, Ningbo and Jinan - - bringing to 27 the number of mainland gateways available. Airlines flying to Taiwan from Guangzhou, Shenzhen and Xiamen no longer will be required to bypass Hong Kong, while an additional route to the north has been created to alleviate crowding aboard the increasingly popular services.
The frequency increase is not as high as was anticipated in February but still is significant. Cross-strait routes enjoy load factors of more than >80%, higher than nearly all domestic mainland and international routes despite the global economic and industry downturn. "The cross-strait routes are 'golden' routes, as they are the most profitable," (EVA) Air mainland spokesperson, Ke Jincheng said. "The supplementary agreement has encouraged us a lot and is very positive news for our carriers hit hard by the global financial crisis." (EVA)'s first quarter was its first three-month period in the black since the third quarter of 2007.
Industry analysts pointed out that China Eastern Airlines (CEA) should benefit most from the expanded agreement, as the Shanghai-based carrier has bases in Hefei, Nanchang, Ningbo and Jinan, while China Southern Airlines (GUN) has bases in Harbin and Guiyang, and Air China (BEJ) has a base in Jinan. (CEA) Board Secretary, Luo Zhuping said the carrier's cross-strait routes have operated at 80% to 90% capacity and that it plans to fly to Taiwan from the new cities.
On the cargo front, the new agreement permits belly freight for the first time and boosts cargo flights from the current 60 per month to 112.
(GUN) became the first Chinese carrier to offer mobile check-in, another innovative step for the airline that sold the country's first e-ticket in 2000 and introduced the first common-use self-service kiosk in 2005 and the country's first online check-in option in 2006.
Mobile check-in initially will be available at Guangzhou Baiyun on flights to Zhengzhou and is expected to be expanded to other routes eventually. (GUN) introduced check-in via Short Message Service (SMS) last September, allowing passengers to check in and select their seats via mobile phones, then pick up their boarding pass at the airport. The service produces a barcoded boarding pass sent to the passenger's phone.
Air China (BEJ) plans to introduce the service on domestic routes leaving from Beijing shortly. It concluded a feasibility study last month and is awaiting approval from the (CAAC).
China Eastern Airlines (CEA) also is committed to expanding check-in options. "If we can't get creative with information technology, we will always be at the mercy of domestic e-travel websites," Chairman, Liu Shaoyong said.
737-81B (35373, B-5421), A319-132 (3860, B-6190), A321-231 (3867, B-6552), deliveries.
May 2009: China Southern Airlines (GUN) flew 7.47 billion (RPK)s traffic in April, up +2.2% from the year-ago month. Capacity rose +0.1% to 9.78 billion (ASK)s, lifting load factor +1.6 points to 76.4% LF.
Owing to the global economic downturn and the depression in the cargo market, China Southern Airlines (GUN) has decided to postpone the launch of its cargo joint venture (JV) with Air France (AFA)/(KLM), according to (GUN) Chairman, Si Xianmin. "Based on the original plan, our cargo (JV) with (AFA)/(KLM) should have been launched in the first quarter. But we have to reconsider this plan after taking the current market situation into account," Si said.
Last June, (GUN) signed a framework agreement with (AFA)/(KLM) to launch a cargo joint venture in which it would hold 75%. "AE Cargo" was expected to operate 10 airplanes initially, (GUN) President, Liu Shaoyong said at the time. But now it was revealed that General Manager, Tan Wangeng said during an internal discussion that both
(GUN) and (AFA)/(KLM) believe that "it is not a good time to launch the cargo (JV) now." (GUN) should have taken delivery of four 777F freighters and one converted A300 by now but has decided to push back two of the 777s until year end and the remaining airplanes to 2010.
There was no indication when the joint venture might be back on the agenda. "Generally speaking, the cargo market is still quite slack and we don't think it will recover this year," Tan said.
Chinese airlines adopted a new pricing standard that effectively will raise fares by approximately +10%. On April 20, carriers began offering discounts on the base price of the ticket only versus the previous practice of discounting on the full rate comprising the base and floating prices. The new standard has upset many travelers in China, although many discounted fares remain available on airlines' websites. Both Air China (BEJ) and China Southern Airlines (GUN) denied the new standard was designed to raise fares, insisting that they are only intent on improving sales systems and plan to adhere to the national ticket policy enacted in 2004. The CAAC (CAC) denied media reports suggesting there was collusion among major Chinese carriers.
Meantime, TravelSky Technology Ltd (eTerm), China's state-owned Information Technology (IT) solutions provider, upgraded carriers' sales systems in accordance with the new standard. TravelSky is the system used by nearly all Chinese airlines. Spring Airlines (CQH) is an exception and has developed its own system.
A319-132 (3903, B-6187), and 2 A321-231s (3890, B-6191; 3920, B-6553), deliveries.
June 2009: China Southern Airlines (GUN) received government approval for a private placement of 721.2 million "A" shares worth more than >CNY2.28 billion/+$333.4 million, SinoCast reported. Proceeds will be used to pay off loans and are part of a capital increase that also will include 721.2 million "H" shares. Both reportedly will be subscribed to by an overseas subsidiary of (GUN) parent, China Southern Air Holding Company.
(GUN) and Air France (AFA)/(KLM) have postponed the launch of their cargo joint venture indefinitely owing to the rapid slump in the global cargo market, (GUN) Chairman, Si Xianmin said. The original plan targeted a launch in the first quarter, but last month, Si said the companies decided to delay "after taking the current market situation into account." He said, "We haven't given up on it, but its launch has to depend on when the cargo market can recover. So far we don't have a specific timetable for it." He predicted that cargo market recovery will be later than passenger recovery. "If the international passenger market can recover next year, then cargo market recovery will be later than that," he said. (GUN) was set to hold a 75% stake in the joint venture, which was slated to operate 10 747s and A330s within two years. It is the only one of China's big three that does not operate a cargo subsidiary, although China Eastern Airlines (CEA)'s China Cargo Airlines (CKK) and Air China's (BEJ)'s Air China Cargo (CAO) each have suffered large losses.
Pratt & Whitney (P&W) announced that (GUN) selected (PW4170) Advantage70 engines to power its 10 A330s. The contract is valued at $590 million including a 10-year Fleet Management Plan for engine maintenance.
737-81B (35374, B-5420), 3 A320-232s (3910, B-6575; 3937, B-6560; 3941, B-6576), and 3 A321-231s (3934, B-6578; 3938, B-6579; 3951, B-6580), deliveries.
July 2009: China Eastern Airlines (CEA) will benefit the most from the agreement reached in April to expand significantly the number of flights permitted across the Taiwan Strait, according to a cross-strait distribution plan released by the (CAAC) (CAC). The Taipei-based Strait Exchange Foundation and the Beijing-based Association for Relations Across the Taiwan Strait, signed the accord that increases from 108 to 270 the number of direct flights allowed beginning this month. Under the (CAC)'s plan, (CEA) is designated to operate 58 weekly flights to Taipei from Shanghai, Nanjing, Wuhan, Qingdao, Kunming, Xi'an, Hefei, Ningbo, and Nanchang. (CEA) Board Secretary, Luo Zhuping noted that the carrier's cross-strait routes are among its most profitable and have operated at 80% to 90% (ASK) capacity on average.
Air China (BEJ) was assigned 54 weekly flights to Taipei from Beijing, Shanghai, Chengdu, Chongqing, Hangzhou, Tianjin, and Guiyang. China Southern Airlines (GUN) also was allocated 54 weekly flights to Taipei to be operated from Shanghai, Guangzhou, Xiamen, Dalian, Guilin, Shenzhen, Wuhan, Changsha, Haikou, Shenyang, Zhengzhou, Harbin, and Guiyang.
Hainan Airlines (HNA) and Shanghai Airlines (SHA) each were allocated 20 weekly flights, while Xiamen Airlines (XIA) was given 22. Sichuan Airlines (SIC), Shandong Airlines (SHG) and Shenzhen Airlines (SHZ) were granted 14 weekly flights each.
On the cargo front, Air China Cargo (CAO) was assigned 10 weekly flights to Taipei from Shanghai and Guangzhou, while (CEA) subsidiary China Cargo Airlines (CKK) was assigned eight weekly flights from Shanghai to Taipei and China Southern (GUN) was assigned 10 weekly flights from Guangzhou to Taipei.
737-71B (35377, B-5247), 737-81B (35379, B-5419), 2 A320-232s (3959, B-6577; 3965, B-6585), A321-231 (3981, B-6581), deliveries.
August 2009: Air France (AFA) and China Southern Airlines (GUN) announced an expansion of their code share agreement covering (GUN)'s flights from Guangzhou to Kunming, Xiamen, and Wenzhou and (AFA)'s service from Paris Charles de Gaulle to Madrid, Milan Malpensa, and London Heathrow.
(GUN) became the first Chinese mainland carrier to gain regulatory approval to launch a branch company in Taipei that will be allowed to sell tickets for cross-strait flights. (GUN) in January became the first mainland airline to establish an office in Taipei, but it was only allowed to use it to coordinate ground handling services there. It had to rely on tourism agencies for ticket sales to Taiwanese. China Eastern Airlines (CEA), Air China (BEJ), and Shenzhen Airlines (SHZ) also have set up offices in Taipei this year but have not been approved to sell tickets in Taiwan.
(GUN) said its Taiwan branch company now will be allowed to promote its tour packages to meet diversified market demands. (GUN) currently operates 12 weekly flights to Taipei from Guangzhou, Shanghai and Shenzhen. It also was allocated 54 weekly flights to Taipei as part of the expanded cross-strait deal that was signed in April.
Rockwell Collins said China Southern Airlines (GUN) selected its MultiScan weather radar, GLU-920 Multi-Mode Receiver and advanced sensors for 10 A330s, with deliveries scheduled to start in March 2010.
(GUN) reached agreement to sell six A300-600Rs, plus five spare (PW4158-3) engines and spare parts, for $124 million to Tigris International (TGS) of the Netherlands Antilles. Hong Kong-based, Galink Aviation Technology acted as broker, (GUN) said in a filing with the Hong Kong Stock Exchange. (GUN) has been operating the airplane for 14 to 16 years, it said, and expects a gain of approximately +CNY46.6 million/+$6.8 million) from the sale.
A319-112 (3983, B-6195) and 2 A320-232s (3999, B-6582; 4003, B-6583), deliveries.
September 2009: China Southern Airlines (GUN) reported net income of +CNY25 million/+$3.7 million for the first half of 2009, based on international accounting standards, down -96.9% from the +CNY818 million earned in the year-ago semester, thanks to government aid.
According to yesterday's filing with the Shanghai Stock Exchange, (GUN) received a subsidy of CNY1.52 billion during the period. Half-year operating revenue fell -9.2% year-over-year to CNY24.88 billion as (GUN) suspended fuel surcharges, while operating expenses dropped -12.6% to CNY22.27 billion on lower fuel prices.
(GUN) cited the H1N1 flu, recently rising fuel costs and fiercer competition as reasons for the profit drop. Passenger boardings climbed +10.7% to 31 million and load factor rose +1.7 points to 74.8% LF.
Chairman, Si Xianmin said he is optimistic about the continuing rapid growth of the domestic market despite overcapacity and the flu scare. "But it remains unclear whether the global economy can recover in the short term, which may result in the continuous downturn of the international air transport market," he warned.
(GUN) is applying for another capital injection from the government, according to Chairman. Si Xianmin. Beijing gave the airline CNY3 billion/$438.7 million last year. "We hope to get more government capital, but we don't have the final say," Si said.
The domestic market is showing signs of recovery and Si predicted the rate of growth will increase toward year end. The (CAAC) (CAC) reported that August passenger boardings were up +41.6% year-over-year while cargo traffic jumped +8.6%.
However, Si warned that the international cargo market "won't recover in the next three years." (GUN)'s planned cargo joint venture with Air France (AFA) has been postponed as a result of the downturn.
(GUN) reported a +CNY25 million net profit in the first half of 2009 thanks to government aid that included last year's suspension of a civil aviation construction fund imposed by the (CAC). Si called on the regulator to rescind its decision to reimpose the fee at some point in the current semester.
(ARINC) said Air China (BEJ), Air Macau (MCU), Asiana Airlines (AAR), Cathay Pacific Airways (CAT), China Southern Airlines (GUN), Dragonair (DRG) and Korean Air (KAL) signed up to use its AviNet Airport wide-area network service, which is available to carriers using its Muse common-use passenger systems.
Honeywell (SGC) signed a $65 million contract with (GUN) to provide 131-9A (APU)s, along with materials, parts and service, for 192 airplanes (36 existing A320s, 71 existing 737s, 20 ordered A320s and 65 ordered 737s).
A319-112 (4038, B-6408), A319-133 (4036, B-6407) and A320-232 (4017, B-6588), deliveries.
October 2009: China Southern Airlines (GUN) reported +10.6% growth in September passenger boardings to 5.49 million, though load factor dropped -4 points to 72.2% LF. Traffic (RPK)s climbed +10% year-over-year with domestic (RPK)s up +8.5% and international traffic rising +19.4%.
(GUN) is increasing capacity (ASK)s to Dhaka, the capital of Banladesh, from Guangzhou. (GUN) launched "e-freight" service on its Guangzhou - Dalian route and said it will offer largely paperless cargo carriage on additional routes by year end. It said the initiative could save -CNY1 million/-$146,300 annually. It is the first Chinese carrier to implement e-freight, which is being pushed strongly by (IATA) (ITA). (GUN) noted that it sold the country's first e-ticket in 2000, introduced China's first self-service kiosk in 2005 and was the nation's first carrier to offer an online check-in option in 2006.
(GUN) decided to sell its 50% stake in (MTU) Maintainance Zhuhai to its parent China Southern Air Holding Company for CNY1.61 billion/$235.5 million in an effort to concentrate on its mainline business and reduce its debt. The deal requires approval from (GUN)'s minority shareholders and relevant government organs. (MTU) Maintainance Zhuhai was launched in 2001 with registered capital of $63.1 million. (GUN) holds 50%, while (MTU) Aero Engines GmbH owns the other half.
(GUN) becomes the first mainland Chinese carrier to allow its passengers in Taiwan to check-in online.
(GUN) intends to expand its international network as it faces potentially damaging competition from the expansion of high-speed rail within China. "Most of China's big cities and secondary cities will be connected by high-speed rail by 2020, which will have a big impact on domestic carriers," (GUN) Chairman, Si Xianmin was quoted as saying. (GUN) is expected to be hit hardest by the rail expansion, as domestic routes account for 80% of its total. "Cost control and service level will be the two key factors deciding whether we can win out over high-speed rail in the domestic market or not," Si said. (GUN) Chairman, Si Xianmin recently admitted that high-speed rail is a more attractive option for passengers because of its better safety record, convenience and lower fares. "We have more than 160 domestic routes, with about 38 competing against high-speed rail. Most of China's big cities and secondary cities will be connected by high-speed rail by 2020, which will have a big impact on domestic carriers," he said. In response, (GUN) intends to expand its international network and allocate more capacity to profitable international routes. (GUN) plans to raise its proportion of international routes from the current 17% to 20% in the next 3 to 5 years.
(GUN) reported a +CNY284 million/+$41.5 million third-quarter profit, but Si remains pessimistic about the industry's future. "I think the road ahead will be quite bumpy as the economic prospect is still bleak," he told reporters. "So we have to make an in-depth study of the global economic situation and the external operating environment so that we can be fully prepared for it."
A 2010 Asian Games, a mini-Olympics, is to be held a year from now in Guangzhou.
737-81B (35386, B-5468) and A319-132 (4071, B-6409), deliveries. 777-21B (27360, B-2054), wet-leased to Garuda Indonesia (GIA) for Hajj flights.
December 2009: As the domestic cargo market recovers, China Southern Airlines (GUN) is boosting capacity on routes from Shanghai Pudong (PVG) and moving toward making the airport its cargo hub. (GUN) introduced two new 777F freighters, adding to the pair of 747-400Fs it already operated from (PVG). (GUN) starts a new 747 service to Frankfurt and the 777s are expected to fly to Chicago O'Hare starting this month. (GUN) also operates a 747F to Amsterdam.
(GUN) plans to take delivery of four more 777F freighters over the next two years, all of which will be based at (PVG). Schedules will be adjusted so that the 777s operate to/from Europe, while the 747s fly to/from the USA.
(GUN) is not the only carrier coveting Shanghai. Air China (BEJ) is negotiating with Cathay Pacific Airways (CAT) regarding establishment of a cargo joint venture to be launched at (PVG) in the first half of 2010. "In recent months, the domestic cargo market has been rebounding rapidly owing to China's fast economic growth, which led to cargo prices doubling that of last year," (GUN) Cargo Director, Luo Laijun said.
China Cargo Airlines (CKK) VP, Gao Pei said, "Over the past three months domestic cargo carriers enjoyed a market boom, which is illustrated by the fact that load factor has reached as high as 95% LF on all-cargo routes starting from Shanghai." But Luo also noted that it is too early to tell if the global cargo market has recovered, since economies have not recovered fully in the Americas and Europe. "I think we will know whether the cargo market has recovered or not in the second quarter of next year. But we have to make preparations for capacity adjustment in advance, otherwise it will be too late when the market fully recovers," he said.
(NCR) Corporation announced the purchase of 40 TouchPort kiosks by China Southern Airlines (GUN) for deployment in Beijing, Shenzhen, Urumqi, and Dalian. (GUN) already had installed a combined 30 of the CUSS kiosks in Guangzhou, Shenzhen, Changchun, and Zhengzhou.
2 777-F1Bs (37311, B-2073; 37312, B-2075), deliveries.
January 2010: China Southern Airlines (GUN) said it expected to post a 2009 profit. It lost -CNY4.83 billion/-$706.4 million in 2008. It said a "rapid market recovery," fueled by both the gradual ebb in the global recession and domestic economic growth, as well as lower fuel prices and cost controls, were key to the turnaround.
(GUN) reportedly plans to purchase the 65% stake in neighboring Shenzhen Airlines (SHZ) formerly held by Li Zeyuan, who was arrested in November, in an effort to strengthen its position in southern China. According to local press reports, (GUN) already has spoken with authorities in Beijing regarding the potential stake purchase. (GUN) General Manager, Tan Wangeng refused to comment, however, calling the situation "too sensitive."
Shenzhen (SHZ) said it has not had formal discussions regarding the stake with (GUN). (SHZ) is one of China's most profitable airlines. It was +CNY500 million/+$73.1 million in the black through the first 11 months of 2009.
(GUN) has a branch company at Shenzhen Bao'an International airport that is the second-largest airline at the airport and commands a 30% share of passenger boardings. (GUN) signed a cooperation agreement with the Shenzhen municipal government last month outlining its plan to raise its market share to 50% in the next five years. According to the agreement, (GUN) aims to build the airport into a regional hub connecting China with nearby countries.
It has been widely speculated that Air China (BEJ) was planning a takeover of Shenzhen Airlines (SHZ). (BEJ) already holds 25% and has transferred at least two major executives to the carrier in recent months. (SHZ) VP, Zhang Siping has reiterated several times that the municipal government intends to support the airline's status as an independent carrier. The government holds 10%.
(GUN) has committed to purchasing 20 A320 airplanes for delivery in 2011-13. (GUN) said it would pay less than the $1.54 billion catalog value for the airplanes and that the fleet expansion will increase capacity (ATK)s by +4.5%. The airplanes are part of the order for 110 A320 family airplanes and 40 A330s that the Chinese government placed with Airbus in November 2007.
2 737-81Bs (35388, B-5445; 35389, B-5446), and A320-214 (4172, B-6620), deliveries.
February 2010: China Southern Airlines (GUN) flew 8.34 billion (RPK)s traffic in January, up +10.6% year-over-year, against a +8.6% increase in capacity to 10.99 billion (ASK)s. Load factor rose +1.4 points to 75.9% LF.
(GUN) received a CNY1.5 billion/$219.6 million capital injection from the Chinese government that is expected to reduce (GUN)'s debt ratio, which stood at around 80% last September 30.
(GUN) will suspend trading as it develops a plan to issue additional shares to absorb the new capital. Beijing reportedly has CNY15 billion to distribute to the "big three" state-owned carriers. In 2008 through 2009, China Eastern Airlines (CEA) and (GUN) received CNY9 billion and CNY3 billion in government cash, respectively. Air China (BEJ) last month announced a +CNY1.5 billion injection to pay back loans used to finalize last year's acquisition of its Air China Cargo subsidiary.
In addition to the new CNY1.5 billion, (GUN) also intends to circulate additional tailored shares designed to raise about CNY8.5 billion from the capital market, an industry insider with knowledge of the plan said.
(GUN) reported net income of +CNY322 million through the first nine months of 2009, attributable mainly to China's CNY1.79 billion civil aviation construction fund, and expects to report a full-year surplus.
China Securities analyst, Li Lei pointed out that (GUN) will benefit in the short term from the growth in the domestic market but that Guangzhou's disadvantageous position as an operating base in comparison to nearby Hong Kong, will put the airline under long-term pressure.
Industry analysts also have said that the rebound in domestic demand will make access to additional government capital difficult. State-owned Assets Supervision & Administration Commission Deputy Director, Meng Jianmin said this month that the "big three" should broaden their fund raising options rather than depending on injections from Beijing.
3 A321-231s (4184, B-6625; 4189, B-6626; 4194, B-6622), deliveries.
March 2010: China Southern Airlines (GUN) announced the private placement of CNY10 billion/$1.46 billion in new "A" shares to a minimum 10 investors, including parent China Southern Air Holding Company, along with new "H" shares to (CSAHC)'s Hong Kong subsidiary Nan Lung worth a reported CNY750 million. (GUN) said the funds "will help reduce the company's gearing ratio, improve its capital structure and enhance its ability to mitigate risk." (CSAHC) is investing the CNY1.5 billion it received from the Chinese government last month, (GUN) said.
(GUN) plans to join SkyTeam (STM) Cargo this year, Senior VP Cargo, Luo Laijun announced during the (IATA) World Cargo Symposium in Vancouver. (GUN) would be the first Chinese airline to join a global cargo alliance and is expected to gain full membership by November. "Since its passenger membership into the SkyTeam (STM) alliance on November 15, 2007, China Southern Cargo has been working to narrow the gap in all areas between itself and the (STM) alliance," Luo said, citing efforts in safety auditing, fleet renewal and expansion, hub development, service improvement, Information Technology (IT) and branding. (GUN) Cargo operates two 747-400Fs and two 777-200Fs from Shanghai Pudong (PVG) to Amsterdam, Frankfurt, and Chicago O'Hare. It plans to add four more 777-200Fs by the end of 2011 and launch new service to Vienna, New York (JFK), Dallas/Fort Worth, and other major destinations in Europe and North America from both (PVG) and Guangzhou Baiyun. SkyTeam (STM) Cargo currently comprises the cargo arms of AeroMexico (AMX), Air France (AFA), Alitalia (ALI), (CSA) Czech Airlines, Delta Air Lines (DAL), (KLM) and Korean Air (KAL).
China Southern Airlines (GUN) plans to introduce 35 new airplanes this year, increasing its total fleet to 400 by 2011, according to General Manager, Tan Wangeng. He noted that (GUN) will phase out older MD-90s and 757s. (GUN) is scheduled to take delivery of its first A380 and 787 in 2011. It has firm orders for five A380s and 10 787s.
Tan also said that (GUN) will move to enhance its position in Shenzhen (SZX) following Air China (BEJ)'s emergence as the new controlling stakeholder of Shenzhen Airlines (SHZ). (GUN) currently operates 25 airplanes at (SZX) and intends to add five A321s this year. Over the next five years, (GUN) plans to allocate 25 to 30 additional airplanes. It currently holds 30% of the Shenzhen market while (BEJ) increased its share to 43% with the acquisition of (SHZ).
Air China (BEJ) plans to deepen its cooperation with Shenzhen Airlines (SHZ), in which it plans to acquire a majority stake, through the April 8 launch of a shuttle service between Beijing (PEK) and Shenzhen (SZX). (BEJ)'s CNY682.1 million bid to increase its share in Shenzhen (SHZ) to 51% still awaits government approval. (PEK) - (SZX) is one of China's most profitable business routes. (BEJ) operates 9x-daily services, while (SHZ) operates six. China Southern Airlines (GUN), which plans to increase its presence at (SZX) in order to compete with the new Air China (BEJ)/Shenzhen Airlines (SHZ) alliance, also operates (PEK) - (SZX) 6x-daily.
(SHZ) transferred its (PEK) operation from Terminal 2 to (BEJ)'s Terminal 3 in order to facilitate the shuttle operation. (SHZ) Marketing Director, Zhu Yixin noted that the carriers will announce similar services on additional routes in the coming days. They also are discussing other areas of cooperation including code sharing and cargo. Through its impending takeover of (SHZ), (BEJ) will increase its share of the South China market to 43%. (GUN) holds 30%.
Meanwhile, (GUN) plans to shift more attention to its international operation this year as China's high-speed rail network continues to impact domestic demand. Tan revealed that it has deepened its cooperation with SkyTeam (STM) alliance partner Air France (AFA)/(KLM) by establishing a Beijing - Amsterdam (AMS) joint venture. It is negotiating a similar agreement on Guangzhou - (AMS) service.
April 2010: China Southern Airlines (GUN) reported a 2009 net profit of +CNY358 million/+$52.5 million, reversed from a net loss of -CNY4.83 billion in 2008.
(GUN) said its improved performance was driven by a "domestic market rebound stimulated by economic recovery in the second half of 2009." Industry analysts pointed out that a CNY3 billion "subsidy" from Beijing last year also helped (GUN) return to the black.
Total operating revenue decreased -0.7% to CNY56.04 billion, while operating expenses dropped -10.4% to CNY 49.2 billion, owing to lower fuel prices. Passengers carried jumped +13.8% to 66.28 million with an average load factor of 75.3% LF, up +1.5 points year-over-year. Cargo rose +3.3% to 861,900 tonnes.
(GUN) said it expects to reap benefits this year from domestic economic growth and international economic recovery, but warned that "challenges still remain such as overcapacity and fuel price volatility." It forecast it will transport 74.95 million passengers in 2010, a +13.1% increase over 2009, while cargo volume will climb +21.8% to 1.05 million tonnes.
"The air transport market will be better this year than last year and the domestic market has recovered to the pre-crisis level," (GUN) (CFO) & Financial Director, Xu Jiebo noted. In order to meet rising market demand, the airline plans to expand its fleet to 412 airplanes by year end from 378 on December 31, 2009. It is scheduled to take delivery of its first A380 and 787 in 2011. It has firm orders for five A380s and 10 787s.
(GUN) reported first-quarter net income of +CNY1.42 billion/+$208.3 million, a more-than-sixfold increase over a +CNY222.2 million profit in the year-ago quarter, on a +30.5% jump in revenue to CNY16.87 billion.
It cited domestic market recovery as the key driver of the revenue improvement. Operating expenses climbed +20.5% to CNY16.51 billion.
Profitability was buttressed by a sizeable "investment gain" mainly attributable to the sale of its 50% stake in (MTU) Maintenance Zhuhai to parent company, the China Southern Group for CNY1.1 billion.
(GUN) plans to introduce 35 new airplanes this year, increasing its total fleet to 400 by 2011.
A320-214 (4260, B-6651), A320-232 (4140, B-6641), and 2 A321-231s (4266, B-6657; 4271, B-6658), deliveries.
May 2010: China Southern Airlines (GUN) is accelerating its market exploration at Xinjiang with plans to launch a regional airline to serve the Autonomous Region in northwest China. (CAAC) (CAC) announced a series of measures to encourage air transport development in Xinjiang, including boosting the number of airports from 14 to 21 by 2015, providing financial aid to carriers and increasing regional flight frequencies to domestic hub airports.
(GUN) already has a branch company in Xinjiang that operates more than >30 airplanes and transported 4.35 million passengers last year, capturing a 51% share of the market. (GUN) is scheduled to sign a strategic cooperation agreement with the Xinjiang regional government that will lead to further capacity growth and new routes to central and south Asia, the Middle East, and Russia. Reportedly, the soon-to-be-launched regional airline may use the name "Xinjiang Air" (XIJ). The former Xinjiang Air (XIJ) was launched in 1985 and merged with (GUN) in 2002.
Vietnam Airlines (VIE) will formally join the SkyTeam (STM) alliance on June 10, a move that will increase the (STM) alliance’s members to 10 carriers. Earlier this month, (VIE) and Air France (AFA) agreed that (AFA)’s flights between Bangkok and Paris will carry the (VIE) code. Delta Air Lines (DAL) already has USA Department of Transport approval to carry the (VIE) code. (VIE)’s entry into the (STM) alliance, which has been expected, means the (STM) alliance now has two members in the area. The Guangzhou base of (STM) partner, China Southern (GUN) is just 800 km/500 mi from Hanoi.
A320-232 (4186, B-6671), 3 A321-231s (4274, B-6662; 4292, B-6659, 4299, B-6660), and A330-223 (1116, B-6515), deliveries.
June 2010: China Southern Airlines (GUN) operated 8.67 billion (RPK)s traffic in May, up +23.2% year-over-year, against a +17.5% increase in capacity to 11.56 billion (ASK)s. Load factor rose +3.4 points to 75% LF.
(GUN) said it remains on track to join the SkyTeam (STM) Cargo alliance formally in November, and sources indicate that it is contemplating a possible merger of its cargo business with that of China Eastern Airlines (CEA).
(GUN), which joined the SkyTeam (STM) passenger alliance in 2007, signed a letter of intent (LOI) to become the first Chinese airline to join a global cargo alliance. Currently, it operates two 747-400Fs and two 777-200Fs from Shanghai Pudong (PVG) to Amsterdam, Frankfurt, and Chicago O'Hare. Cargo Director, Luo Laijun noted that (GUN) is scheduled to take delivery of three new 777Fs in July and August and plans to operate them from (PVG) to Vienna, New York, and Dallas.
Meanwhile, (GUN) has not ruled out merging its cargo business with (CEA)'s. It long has been speculated that Beijing intends to merge the cargo operations of China's big three carriers into one cargo company that would be better positioned to compete against foreign airfreight players. But it may be impossible for Air China (BEJ) to merge its cargo business with (CEA) and (GUN) because (BEJ) has signed a framework agreement with Cathay Pacific Airways (CAT) to launch a cargo joint venture (JV) based in Shanghai. It is still waiting for government approval for the (JV).
Foreign airlines currently have a dominant position in the Chinese air cargo market, in which domestic carriers hold less than a <20% share of traffic. (CEA) Chairman, Liu Shaoyong said that (CEA) plans to introduce a strategic investor in its cargo business by year end and it is widely speculated the partner will be (GUN). (CEA) has agreed to join the SkyTeam (STM) passenger alliance under the sponsorship of (GUN).
To start 2x-weekly flights, Beijing to Tashkent (Uzbekistan). (GUN) now flies nonstop from Guangzhou to Urumqi, China's longest domestic flight.
China's big three carriers plan to offer in-flight mobile phone service, according to the China Air Transport Association, which said the airlines signed a framework agreement with cellular technology development companies last year. Air China (BEJ), China Southern Airlines (GUN) and China Eastern Airlines (CEA) have submitted an application to the (CAAC) (CAC) seeking permission to offer in-flight mobile phone service but are still waiting for approval from the regulator. Passengers reportedly will be charged CNY15/$2.21 per minute to use the service, a proposed fee that has drawn complaints from some quarters in China as too high. In 2007, Shenzhen Airlines (SHZ) signed a contract with OnAir to equip its airplanes for in-flight mobile phone service, but the initiative was grounded when the (CAAC) declined to grant approval.
3 A320-232s (4232, B-6653; 4290, B-6652; 4350, B-6655), 2 A321-211s (4338, B-6663; 4341, B-6661), and 1 A330-223 (1129, B-6516), deliveries.
July 2010: (IAE) announced that China Southern Airlines (GUN) selected the (V2500) to power a fleet of 20 A320s it has on order with deliveries beginning in 2011. The contract includes a long-term "Aftermarket Services Agreement." (IAE) valued the engine and support deal at in excess of >$400 million.
Guangzhou Aircraft Maintenance and Engineering Company (GAMECO) announced a contract with (IAI)'s Bedek Aviation for passenger-to-freighter conversions of up to nine 737-400s using the (IAI) Supplemental Type Certificate (STC). The work will be done at (GAMECO)'s facility in Guangzhou in 2010 through 2011. In addition to the conversion touch work, (GAMECO) will provide painting, airplane maintenance and other work as required. Redelivery of the first airplane is scheduled for September.
(GAMECO) signed a Memo of Understanding (MOU) with Chongqing Airport Group and Chongqing Airlines (CGQ) to establish a joint-venture (JV) Maintenance Repair & Overhaul (MRO) facility at Chongqing Jiangbei International. The facility, Chongqing (GAMECO) Aircraft Maintenance Engineering Company, will have two bays and initially focus on A320 line maintenance and Airplane On Ground (AOG) support, base maintenance, component (MRO) and other services for Chongqing Airlines (CGQ) and other customers. (GAMECO) will be the majority owner in the venture.
(GAMECO) said it "designed, certified and completed" a branded Premium Economy Cabin refit on 238 airplanes and six airplane types operated by China Southern Airlines (GUN).
August 2010: China Southern Airlines (GUN) 2009 World Total Passenger Traffic = 93,002 Million (+11.8%) (RPK)s (World Highest #12) (#15); World Total Employees = 50,412 (+9.1%) (World Highest #5).
SEE ATTACHED - - "GUN-2010-08-WLD RPK-2009."
(GUN) reported net income of +CNY207.6 million/+$30.5 million for the 2010 first half, a considerable expansion over a +CNY38 million profit in the year-ago period and said the increase is owing to robust domestic market growth and the sale of its 50% stake in MTU Maintenance Zhuhai to parent company China Southern Group for CNY1.1 billion.
Operating revenue jumped +39.4% to CNY34.68 billion, while expenses climbed +30% to CNY28.94 billion, in part owing to a +63.4% increase in fuel costs to CNY10.88 billion. Passenger boardings rose +17% to 36.2 million and load factor was 77.9% LF, up +3.1 points. Cargo traffic volume lifted +37.6% to 512,000 tonnes.
Despite its first-half performance, (GUN) warns that the rapidly expanding network of fast railways in China presents a risk to its business.
Looking ahead, (GUN) said it will continue to benefit from the strong growth of the domestic market, but cautioned that challenges still remain owing to a “slowdown of the global economic recovery."
Industry analysts are optimistic about the third quarter, China's traditional peak travel season. China Merchants Securities predicted Air China (BEJ), (GUN) and China Eastern Airlines (CEA) will report third quarter net income of +CNY4 billion, +CNY2 billion, and +CNY2.8 billion, respectively.
(GUN) announced plans to add +800 to +900 flights for the upcoming Asian Games, hoping to boost its financial performance in the second half of the year. General Manager, Tan Wangeng said (GUN) would introduce more than >10 airplanes in the next three months to operate its Asian routes. “We estimate the Asian Games [scheduled to be held in November in (GUN) base city Guangzhou] would attract more than >50,000 people," he said.
“In the first half of this year, the domestic market rebound was quite strong," Tan said. "August and September is the traditional peak season; we hope to utilize the Asian Games to continue the growing trend of strong market demand" throughout the year.
(GUN) estimated that its first half profit was +50 times greater than the +CNY38 million/+$5.6 million reported in the year-ago period owing to a rapid domestic market rebound and the sale of its stake in Zhuhai (MTU).
China Southern (GUN) will more than double the size of its operation
in Hainan, the home province of rival Hainan Airlines (HNA) over the coming five years, taking advantage of subsidies offered by the local government. (GUN) says it will deploy airplanes worth more than 10
billion yuan/$1.5 billion to the island province, aiming to promote it as an international tourism destination. The fleet of its Hainan branch company will rise to 50 airplanes from 22 within five years, implying +22% annual growth — - much faster than can be expected in
the overall Chinese airline market in that time. The number of routes serviced from Hainan will rise correspondingly to 93 from 42.
Hainan’s provincial government will support the investment with tax concessions and land, among other forms of assistance. Chinese provincial and municipal governments commonly offer such inducements for companies to set up or expand businesses that will help drive their local economies. In this case, Hainan is doing so despite its investment in Hainan Airlines (HNA).
Although China Southern (GUN) does not mention the issue, exploitation of Hainan as a destination also helps to address one of the carrier’s most pressing concerns: how to develop its international business to offset massive competitive pressure from China’s rapidly developing network of fast railways.
(GUN) Chairman, Si Xianmin says (GUN) will open express services
from Hainan to Hong Kong and Guangzhou and international services to Russia, South Korea, and Japan. Si has previously said (GUN) must respond to the rail threat by increasing international services to 30% of its operations from the current 17%. Of the 93 routes expected to be added, 26 will be international.
(GUN) said it will increase its share of the Hainan market to 40% by 2015 from 33. It currently operates 22 airplanes from Hainan to 42 destinations.
777-F1B (37313, B-2081), A320-232 (4279, B-6680), ex-(B-507L), and A321-211 (4416, B-6685), ex-(D-AZAE), deliveries.
September 2010: SkyTeam (STM) alliance members China Southern Airlines (GUN) and Air France (AFA) signed an agreement to launch a joint venture (JV) on the Paris – Guangzhou route beginning November 1 that includes revenue sharing. (AFA) said in a statement that the two airlines will have “joint governance” of the (JV) and a “management committee, with five working groups, will be in charge of implementing it in the fields of network management, revenue management, sales, produces and finance.”
Air France/(KLM) Group (CEO), Pierre-Henri Gourgeon said, “This (JV) agreement strengthens the links which already exist between (AFA) and (GUN). It consolidates our position in one of the most buoyant regions of the world and enables us to offer our customers improved service while maintaining costs. In this way, the Air France (AFA)/ (KLM) Group is confirming its rank as European airline leader to China.”
(GUN) President & (CEO), Tan Wan Geng added, “The (JV) will enable both airlines to improve their competitiveness on a very buoyant market.”
Since 2004, (AFA) and (GUN) have been operating code share flights between Paris and Guangzhou, thanks to an agreement signed in 2003, according to (AFA). Within the framework of this (JV), “several other connecting destinations beyond these two cities will gradually be introduced on a code share basis,” said (AFA).
China Eastern (CEA) is also expected to become a formal member of the SkyTeam (STM) alliance next year and is negotiating with (AFA)/(KLM) about forming a (JV) on its Shanghai – Paris and Shanghai – Amsterdam routes. It is reported that (AFA) would sign a similar (JV) agreement with (CEA) on the Shanghai – Paris route at the end of 2011.
(KLM) has been placing its code on (GUN)’s daily, Guangzhou – Amsterdam service on board a 777-200 since 2001. (KLM) has also operated a (JV) with (GUN) on its Beijing – Amsterdam route since June 2006.
(GUN) signed a framework agreement with Air France (AFA)/(KLM) to launch a cargo (JV) in 2008, which was postponed owing to the global financial crisis. (KLM) Senior VP Route Network, Pieter Elbers noted in May that both carriers would formally launch the cargo (JV) once market conditions are appropriate. He also didn’t rule out the possibility of seeking a cargo (JV) with (CEA).
(GUN) will begin promoting its new premium economy (PY) cabin on international routes this month beginning with its Guangzhou - Sydney route. Beginning October 31, the new class will be available on services to Melbourne, Brisbane and other international routes, except Japan and Dubai.
(GUN) became the first domestic carrier to launch a premium economy (PY) class on domestic routes in March, followed by Air China (BEJ) and Sichuan Airlines (SIC).
(GUN) reconfigured its airplanes in July and has added about 7,000 premium economy (PY) seats, which (GUN) noted have been very popular with customers. Load factor for the cabin has exceeded 80% LF.
A320-214 (4325, B-6682), ex-(B-501L), and A321-231 (4430, B-6687), ex-(D-AZAI), deliveries.
October 2010: China Southern Airlines (GUN) estimated its profit for the first nine months of 2010 at +CNY322 million/+$48.5 million, a more than fifteen-fold year-over-year increase, according to a filing with the Shanghai Stock Market.
(GUN) announced that it earned +CNY3.04 billion/+$457 million in the third quarter, an almost tenfold increase over +CNY284 million in net income in the year-ago quarter. (GUN) credited “robust growth of domestic market” and yuan appreciation for the improved performance.
Operating revenue climbed +45.2% to CNY23.15 billion, while operating expenses jumped +19.6% to CNY18.88 billion.
Industry analysts widely hold that China’s big three all should report profits in the third quarter. According to one published estimate, Air China and China Eastern could report earnings of CNY4 billion and CNY3 billion, respectively, for the period.
Earnings for the first nine months of the year totaled CNY5.12 billion and (GUN) is expected to be profitable in the fourth quarter as well owing to continued strong domestic market demand and a traffic boost from the Asia Games held in November.
(GUN) reported net income of +CNY2.07 billion for the first half of this year, crediting “robust growth of domestic market demand stimulated by fast Chinese economic growth,” increased yields and currency appreciation.
It is widely speculated that China’s big three airlines will post an aggregate profit for the first three quarters of the year. According to China International Capital Corporation (CICC), Air China (BEJ), (GUN) and China Eastern Airlines (CEA) are expected to report net profits of +CNY8.84 billion, +CNY5.6 billion and +CNY5.5 billion, respectively, for the first nine months of 2010, all significant year-over-year increases. It also estimated that (BEJ), (GUN) and (CEA) earned net income of +CNY4.15 billion, +CNY3.52 billion and +CNY3.56 billion, respectively, in the third quarter.
Looking to the fourth quarter, the (CICC) is optimistic that “domestic market demand will continue to grow owing to the Shanghai World Expo and Asian Games held in Guangzhou [in] November.”
(GUN) plans to launch a service between Guangzhou and Moscow Sheremetyevo via Urumqi. The SkyTeam (STM) alliance carrier will operate daily on the route from 31 October, using 757-200 airplanes. Currently, no airline operates non-stop between Guangzhou and Moscow Sheremetyevo, according to schedules in Innovata.
(GUN) announced that its subsidiary, Xiamen Airlines (XIA) agreed to buy 10 Boeing airplanes valued at $699 million. The information was contained in a statement by (GUN) to the Hong Kong Stock Exchange. The airplanes are believed to be 737NGs.
November 2010: China Southern (GUN) started new Guangzhou flights to Brisbane, while adding capacity to the Sydney and Melbourne markets. It also began flying from Beijing to Jeddah via Dubai. All of the new flights are operated with A330s, some outfitted with (GUN)’s new
premium economy product. (GUN) says it wants to become an “international network-focused airline,” implying strategy to capture connecting traffic through its Guangzhou and Beijing hubs.
January 2011: China Southern Airlines (GUN) said its 2010 net profit is likely to be around +CNY5.01 billion/+$757.9 million, fourteen times greater than a 2009 net profit of +CNY358 million. (GUN) credited robust domestic market growth, the Chinese economy's stability and Yuan appreciation, according to a (GUN) statement released by the Shanghai Stock Exchange. (GUN) transported 76.5 million passengers in 2010, up +15.4% year-over-year, while cargo traffic climbed +30.1% to 1.1 million tonnes.
(GUN) plans this year to further develop the Xinjiang market. It is set to lease 10 Embraer EMB-190s from China Development Bank Leasing Company, with deliveries starting in the second half of 2011, and the airplanes will be operated on regional routes to/from Xinjiang, according to (GUN) CFO, Xu Jiebo.
Japan Airlines (JAL) and China Southern Airlines (GUN) reached a code share agreement under which (JAL) placed its code on (GUN)'s four-times-weekly, Tokyo Narita - Dalian service using an A321. (JAL) and (GUN) now code share on 23 flights a week on five routes.
China Southern (GUN) is by far China’s largest domestic airline, which is both a plus and a minus. On one hand, domestic markets are booming. But on the other, high-speed train competition (along with rapid construction of highways and more people owning cars) leaves many of these routes vulnerable. Its home market Guangzhou is similarly blessed and cursed, with a dynamic and fast-growing economy offset by heavy competition from nearby hubs like Shenzhen and Hong Kong, as well as heavy exposure to (ASEAN) Low Cost Carrier (LCC)s like AirAsia (ASW) and Tiger Airways (TGR) (which can’t quite reach Beijing and Shanghai with their A320s). Guangzhou is also a smaller market than Beijing and Shanghai.
2 MD-90-30 (53523, N953DN; 53526, N956DN), sold to Delta Air Lines (DAL), and ferried to Marana.
February 2011: China Southern Airlines (GUN) plans to further explore the market potential in western China, saying it will double capacity in the Guangxi Zhuang autonomous region over the next five years. According to an agreement between (GUN) and the Guangxi local government, (GUN) is expected to boost its flight frequencies on routes from Nanning to Guangzhou, Shenzhen, Beijing, and Shanghai by 2015. It will also open “air shuttle service” on Nanning - Guangzhou and Guilin - Guangzhou routes.
(GUN) will additionally launch new international routes to member nations of the Association of Southeast Asian Nations from Nanning, Guilin, and Beihai in Guangxi. In return, the Guangxi local government has agreed to support (GUN)’s growth by formulating favorable policies and subsidizing (GUN).
ST Aerospace joint venture (JV) company ST Aerospace (Guangzhou) Aviation Services Company received a business license from the Guangzhou Municipality Administration of Industry and Commerce to establish its airplane repair facility in Guangzhou, China. It already received endorsement from the (CAAC) (CAC) and approval from the Ministry of Commerce.
ST Aerospace (Guangzhou) Aviation Services Company is a (JV) between Guangdong Airport Management Corporation (51%) and ST Aerospace (49%), and will perform commercial airplane Maintenance Repair & Overhaul (MRO) for Airbus (EDS), Boeing (TBC) and McDonnell Douglas (TBC) airplanes. The (JV) will be operated and managed as a part of ST Aerospace’s global network of (MRO) facilities. It is expected to begin operations in the second half of 2013.
March 2011: China Southern Airlines (GUN) reported 2010 net income of +CNY5.8 billion/+$883 million), fifteen times greater than the +CNY381 million net profit earned in 2009. (GUN) said the sharp jump could be credited to “robust growth of domestic market demand” stimulated by “rapid Chinese economic growth” and rising “domestic consumption.” It also cited positive benefits from the Shanghai World Expo and Guangzhou Asian Games.
Operating revenue climbed +38.8% to CNY77.79 billion, while operating expenses rose +27.2% to CNY62.57 billion, including a fuel expense of CNY23.49 billion that accounted for 37.5% of costs.
Passenger boardings heightened +15.4% to 76.5 million with an average load factor of 79.2% LF, up +3.9 points over 2009. Cargo traffic volume increased +29.6% to 1.1 million tonnes.
As of December 31, 2010, (GUN) operated a fleet of 422 airplanes. It plans to introduce 55 new airplanes and phase out 16 units this year.
Looking ahead, (GUN) predicted that its financial performance will continue to be boosted by the global economic recovery and domestic economic growth, as well as continued Yuan appreciation. But it also warned that challenges remain, including “macroeconomic fluctuation, serious domestic inflation, acceleration of domestic high speed rail construction and rising fuel prices.”
Guangzhou Aircraft Maintenance and Engineering Company (GAMECO) received a contract from AeroMexico (AMX) covering "C" maintenance checks, implementation of service bulletins (SB)s/Engineering Orders (EO)s, pylon modifications and airplane cleaning on four 767-200 and 767-300 airplanes. Work has begun and is slated to be completed by September.
April 2011: China Southern Airlines (GUN) is accelerating the pace of its international expansion this year in response to mounting competition from China’s expanding high-speed railway network. (GUN) General Manager, Tan Wangeng said (GUN) hopes to boost international flying to 30% of the total routes it operates, up from 18.5% last year.
(GUN) has launched thrice-weekly, A330 Guangzhou - New Zealand service, which is expected to increase to daily from October. (GUN) also plans to add +40 weekly flights to Oceania this year, and increase flights to more than >110 by 2015.
(GUN) will also explore markets in Western countries as it takes delivery of its first A380 in August or September, which would most likely operate on a Beijing - Paris route. (GUN) is scheduled to take delivery of China’s first 787 by December, which would most likely operate on a route to either Europe or the USA, (GUN) Deputy General Manager, He Zongkai said.
(GUN) is in the unenviable position of having 80% of its domestic route network, and nearly a quarter of its city pairs, competing with high-speed rail, which had a total distance of 8,358 km of lines in operation by the end of 2010. According to the "Xinhua News Agency," “China aims to have more than >16,000 km of high-speed railway by 2015. More than >8,000 km of high-speed rail line is in operation, already the most in the world.”
China Eastern Airlines (CEA) also plans to raise the ratio of international flights to 40%, up from 30%. Air China (BEJ) is expected to introduce eight to 10 long-haul international routes this year.
Two Chinese airlines ordered a total of 30 Embraer E190s, plus five options, during Brazilian President, Dilma Rousseff’s visit to China.
Shijiazhuang-based, Hebei Airlines (NTE), which launched in June 2010, committed to 10 E190s, plus options for an additional five units. Deliveries will begin from September 2012.
Embraer also confirmed that China Development Bank (CDB) Leasing Company ordered a “second batch of 10 E190s as a follow-on order to an agreement concluded earlier this year” to be operated by China Southern Airlines (GUN). In addition, (CDB) and (GUN) signed a letter of intent (LOI) for a third group of 10 E190s, which, if confirmed, will bring the total (CDB) order to 30 airplanes, valued at $1.25 billion at list prices, Embraer (EMB) said. (GUN) is expected to begin taking delivery of the airplanes during the second half of this year.
Embraer noted that with this new order, it has 135 airplanes firm orders in the Chinese market.
Embraer signed an agreement with (AVIC) (CCC), in which both sides will use their Harbin Embraer Aircraft Industry Company joint venture (JV) as the final assembly line for the Legacy 600 and 650 executive airplanes. Harbin, which was established in January 2003, has produced and delivered only 39 ERJ-145s and has been idle since 2009 after Hainan Airlines (HNA) canceled its order for 25 ERJ-145s.
A320-214 (4550, B-6739), delivery, A320-214 (4671, B-6776), (ICBC) Leasing leased, and A330-223 (1220, B-6526), ex-(F-WWKD), delivery.
May 2011: China Southern Airlines (GUN) saw earnings dip in the 2011 first-quarter compared to the year-ago period, despite strong revenue growth. (GUN) earned +CNY1.24 billion/+$190 million, down -12.9% from a +CNY1.42 billion profit last year.
(APG) announced that China Southern Airlines (GUN) and Asiana Airlines (AAR) were activated in its (APG) Interline E-Ticketing (IET), bringing the number of airlines included in the program to 74 worldwide. (APG) (IET) is open to all (IATA) (ITA) and non-(IATA) scheduled airlines, with the sole condition that they are e-ticketing eligible on Global Distribution Systems (GDS). (APG) introduced the (APG) (IET) hub in cooperation with Heli Air Monaco (YO/747) in 2008, enabling airlines to interline with multiple other airlines through a single (IET) implementation. The solution is administered by (APG)’s Paris head office and marketed by (APG)-Global Associates around the world.
“Joining the (APG) (IET) program permits airlines to use (YO-747) neutral e-ticketing documents in (IATA) Billing & Settlement Plans worldwide and the Airlines Reporting Corporation in the USA where they do not participate themselves,” noted (APG) (IET) Executive Product Director & CEO, France Sandrine de Saint Sauveur. “This allows the airlines to widen their marketing reach to over >82,000 (IATA) and (ARC) accredited travel agents. In addition, the airlines get access to the growing pool of Interline carriers with whom they may not have interline ticketing agreements directly.”
(GUN) said robust domestic market growth was central to its first-quarter profit. Its revenue for the year's first three months increased +21.5% to CNY20.51 billion, while expenses rose +14.7% to CNY18.9 billion. Passenger boardings heightened +5.8% to 18.7 million with an average load factor of 79.9% LF, up +1.9 points. Cargo volume increased +5% to 262,690 tonnes.
China Southern Airlines (GUN) said in a filing with the Shanghai Stock Exchange that its subsidiary, Xiamen Airlines (XIA) will order six 787 Dreamliners to facilitate its international expansion. The order, which is not yet final, is valued at $1.1 billion at list prices, but (XIA) will pay "significantly" below list prices, the filing said. Deliveries are slated for 2014 to 2015. (XIA) General Manager, Che Shanglun said (XIA) plans to use the 787 Dreamliners to launch routes to Europe and the USA from its Xiamen base and Fuzhou.
In 2006, (XIA) canceled a previous order for three 787s and replaced it with an order for six 737-800s. (XIA) operated a fleet of 71 airplanes as of April 30 and plans to expand its fleet to more than >130 airplanes by 2015.
The (CAAC) (CAC) has reported that Chinese carriers posted aggregate first-quarter net income of +CNY5.73 billion, up +31.8% over the year-ago period.
(GUN) signed a cooperation agreement with the Beijing government paving the way for (GUN) to enhance its position at the new Beijing Daxing airport, which is projected to open in 2016. Construction is set to begin this year. (GUN) noted that over the next 10 years, it will allocate about 200 airplanes — A330s and A380s — from Beijing Capital International, which is facing slot shortages, to the new airport.
(GUN), which faces fierce competitive pressure from Cathay Pacific Airways (CAT) and its Dragonair (DRG) subsidiary, is accelerating its pace to gain a deeper foothold in Beijing. Reports indicate it is trying to get approval to operate between Beijing (PEK) and New York or (PEK) - Paris Charles de Gaulle using A380s, the first of which arrives in August.
China’s big three carriers have been keen to grow their presence at each other’s hub cities. In addition to (GUN)'s bid to challenge Air China (BEJ) in Beijing, (BEJ) aims to build an international gateway at Shanghai, which is home to China Eastern (CEA).
(CAAC) (CAC) Minister, Li Jiaxiang warned that, “So far there is no Chinese carrier that can successfully operate two domestic hubs. Domestic airlines should focus on their own operating base to avoid scattered capacity allocation and disorderly competition; otherwise, it would weaken [the] overall competitiveness of China's airline industry as a whole.”
Hainan Airlines (HNA) relaunched Chongqing-based, China West Air (CHO) in conjunction with Chongqing Yufu Capital Management Company, which is controlled by the Chongqing municipal government. (HNA) didn’t reveal the exact figure but noted the combined investment was CNY3 billion/$460.8 million.
China West Air (CHO) was initially launched in 2006 with a registered capital of CNY80 million. (HNA) subsidiary Lucky Air (LKY) and Jianying Investment Company both hold a 35% stake and Shenzhen Guorui Investment Company, Sichuan Sanxing General Aviation Company and Xinjiang Siweida Technology Company all have a 10% stake in (CHO).
China West Air (CHO) operates a total fleet of nine airplanes, comprising four A319s, two 737-300s and three A320s on more than 20 domestic routes. (CHO) is expected to open international routes to Southeast Asia, Japan and South Korea by the end of 2012 and expand its fleet to 40 by 2015.
It is noteworthy that China Southern Airlines (GUN), which launched subsidiary Chongqing Airlines (CGQ) in 2006, signed a cooperation agreement this month with the Chongqing municipal government to enhance its position in Chongqing.
China Southern Airlines (GUN), as the first Chinese operator to fly the A380 airplane, has signed a contract with Airbus (EDS) for customized Flight Hour Services (FHS) for its fleet of five A380s, scheduled to be in service from the second half of 2011.
(EDS) will deliver to (GUN) a tailor-made (FHS) solution supported by the benchmark (EDS) worldwide customer services system. This long-term agreement guarantees on-site availability of Line Replaceable Units (LRUs), related logistics and maintenance services for (GUN), which joins the club of growing (EDS) (FHS) customers in Asia.
The Chinese government raised domestic jet fuel prices to CNY7,640/$1,175 per ton, up +11.7% from CNY6,840 per ton in April, despite the decline of international oil prices since May. This is the third price hike this year. Fuel costs comprise more than >40% of Chinese carriers’ operating expenses. China Southern Airlines (GUN), which operates 80% of its flights on domestic routes, could see its fuel costs increase by +CNY2.11 billion annually owing to the change. Air China (BEJ) and China Eastern Airlines (CEA), which operate 70% of their flights on domestic routes, could see their annual fuel costs rise by +CNY1.79 billion and +CNY1.84 billion, respectively.
As a short-term solution, most Chinese carriers announced they have increased fuel surcharges on domestic routes. China’s big three carriers are reportedly considering restarting fuel hedging but first must receive government approval.
June 2011: China Southern Airlines (GUN) launched 3x-weekly, Guangzhou - Vancouver service.
China Southern Airlines (GUN) said in a widely cited filing with the Hong Kong Stock Exchange that it reached an agreement with Boeing (TBC) to purchase six 777F freighters valued at $1.58 billion based on list prices, although it noted that it received "price concessions" making the cost "significantly lower" than list prices. Meanwhile, China Eastern Airlines (CEA) officially relaunched China Cargo Airlines (CKK), finalizing the integration of its cargo unit with Shanghai Airlines (SHA)'s airfreight subsidiary.
(GUN) said the six 777Fs will be delivered between 2013 and 2015 and "will facilitate the optimization of the structure of the group's cargo business, freighter fleet and cargo traffic capacity."
The 777Fs will enable (GUN) to boost its cargo capacity +8.4%. Rival (CEA) is also seeking to buttress its cargo business through the relaunch of China Cargo Airlines (CKK), which is based on the assets of (CEA)'s old subsidiary, China Cargo Airlines (CKK), Shanghai Airlines (SHA) Cargo International and Great Wall Airlines (GWA). The new (CKK) has a registered capital of CNY3 billion/$463 million. (CEA) holds 51%, China Ocean Shipping Company owns 17%, Eva Airways (EVA) controls 16% and Singapore Cargo Airlines (SQC) has 16%.
(CKK) is based in Shanghai and will operate 18 freighters comprising five 747-400Fs, four 777Fs, four MD-11Fs, two 757-200Fs and three A300-600Fs. (CKK) is scheduled to introduce two new 777Fs this year. (CEA) Managing Director, Ma Xulun said the 747-400F and 777F would become the cargo venture's main fleet types by 2015.
Shanghai is the biggest and most lucrative cargo market in China, but it is dominated by FedEx (FED), (UPS) and DHL, rather than domestic operators. In addition to the new (CEA) carrier, Air China (BEJ) and Cathay Pacific Airways (CAT) formally launched their Shanghai-based joint venture (JV) cargo operation in May. It is noteworthy that (GUN) has also shifted its cargo base to Shanghai.
July 2011: China Southern Airlines (GUN) is currently the largest Chinese carrier operating international and regional services with Guangzhou and Beijing as its major hubs, and Urumqi and Shenyang as its regional hubs, served by a network that covers all of Asia and offers convenient connections worldwide. Direct services are flown from Guangzhou to the major cities in North America, Europe, Australia, Southeast Asia, Japan and South Korea.
Employees = 50,412.
(IATA) Code: CZ - 784.
(ICAO) Code: CSN - (Callsign - CHINA SOUTHERN).
August 2011: China Southern Airlines (GUN) reported a net profit of +CNY 2.755 billion/+$531.6 million for the first half of this year, up +32.71% over the +CNY 2.076 billion earned last year. (GUN) credited the increase to “robust growth of domestic market demand stimulated by a fast growing Chinese economy.”
Total operating revenue climbed +22.3% to CNY 42.414 billion against a +22% increase in operating expenses to CNY 35.302 billion caused by surging fuel prices. Passenger traffic increased by +6.1% to 38.44 million and load factors averaged 80.6% LF, a +2.7% point improvement over the same period last year. Cargo traffic volume grew +4.7% to 536,000 tonnes. Daily airplane utilization rate increased +0.07 hours to 9.63 hours.
Looking to the second half of this year, (GUN) said it expected domestic market demand to maintain growth. But (GUN) also warned that “economic uncertainties still remain owing to fragile recovery of global economy and European debt crisis.” Domestic inflation and high speed rail construction in China, will also exert some negative impact, (GUN) said.
(GUN) signed a strategic cooperation agreement with Dalian Airport (DLC) as part of a plan to enhance its position in the Dalian market in northeastern China and compete with Air China (BEJ). Under the agreement, (GUN) plans to boost its passenger traffic by +15% at (DLC) over the next five years by opening more domestic routes from (DLC) to Guilin, Nanning, Xining, and Baotou. (GUN) also plans to boost frequencies from (DLC) to Taipei.
In the next three years, (GUN) will add four more routes from (DLC) to Japan and three more destinations in Russia. It will also boost frequencies on the (DLC) - Osaka route and (DLC) - Tokyo route.
(GUN) also plans to add two to four more international destinations through connecting flights from Guangzhou and Beijing (PEK) to Europe, USA, Australia, and some Southeast Asian countries.
(GUN) currently dominates the Dalian market with a 40% share.
Earlier this month, Air China (BEJ) launched a Dalian Airlines subsidiary that will launch scheduled services this year. Initially, it will operate three 737-800s on domestic routes from (DLC) to (PEK), Shanghai and Shenzhen. Dalian Airlines plans to expand its fleet to five airplanes in the first half of 2012 and eventually open international routes to Japan and South Korea.
1 Embraer E190LR (0456, B-3197 - - SEE PHOTO - - "GUN-2011-08-E190LR 1ST"), China Development Bank (CDB) Leasing Company (CLC) as part of an order of up to 30 airplanes (20 firm and 10 options), all scheduled to be delivered to China Southern Airlines (GUN).
September 2011: Guangzhou Aircraft Maintenance & Engineering Company (GAMECO), the joint venture (JV) owned by China Southern Airlines (GUN), South China International Aircraft Engineering, and Hutchison Aircraft Maintenance Investment, said it broke ground on September 7 on a new $90 million hangar at Guangzhou Baiyun International airport. The 24,107 sq m hangar is primarily intended to support the “rapid growth” of (GUN)'s fleet, it said.
The eight-bay hangar will be able to accommodate narrow body airplanes (including 737s, 757s, 787s and A320 family airplanes) and is slated for completion at the end of 2012, with full operations expected to occur in the first half of 2013. General Manager, Norbert Marx called the groundbreaking “a significant milestone in developing (GAMECO)’s heavy maintenance operations.”
(GUN) plans to operate its first A380 on the Beijing (PEK) - Shanghai and (PEK) - Guangzhou routes. The A380 is scheduled to be delivered October 15 and will be placed in service October 17, according to (GUN) General Manager, Tan Wangeng.
(GUN) is still awaiting (CAAC) (CAC) approval to operate the airplane on international routes, reportedly either (PEK) - New York or (PEK) - Paris, Air China (BEJ)’s two most profitable routes.
(GUN) is the only Chinese carrier to order the A380. It has five of the type on order, with the second delivery expected later this year.
In June, the Chinese government blocked an order from Hainan Airlines (HNA)'s subsidiary Hong Kong Airlines (CRY) for 10 A380s to express its disapproval of Chinese carriers' inclusion in the European Union (EU) Emissions Trading Scheme (ETS) starting next year.
(GUN)’s first A380 has 506 seats, comprising 8F luxurious first-class seats, 70F first-class seats and 428Y economy seats.
Airbus (EDS) reported that 18 carriers around the world have ordered 236 A380s; 56 airplanes have been delivered to six carriers. (EDS) China President, Laurence Barron pointed out that A380 operators report an average load factor increase of +2% LF to +3% LF. Singapore Airlines (SIA) has reportedly maintained a load factor of 83% LF for 16 months, while Emirates Airline (EAD) has maintained a load factor of more than >90% LF on its (PEK) - Dubai route since August 2010.
(GUN) plans to operate its first A380 on the Beijing (PEK) - Shanghai and (PEK) - Guangzhou routes on October 17. Japan Airlines (JAL) and China Southern Airlines (GUN) reached an agreement to expand their code share partnership. The two carriers will now place their codes on every flight operated by the other, between cities in China and Japan.
October 2011: China Southern Airlines (GUN) reported a third-quarter net profit of +CNY3.13 billion/+$492 million, up +2.99% from +CNY3.04 billion in the year-ago quarter. (GUN) cited robust growth in domestic demand for the result.
Revenue jumped +17.8% to CNY27.27 billion against an increase of +24.3% in expenses to CNY 20.61 billion. (GUN) did not release traffic figures.
(GUN) posted a net income of +CNY5.9 billion for the first nine months of this year, up +15% compared to CNY5.1 billion year-over-year. Revenue climbed +20.5% to CNY69.7 billion, while expenses jumped +22.8% to CNY55.91 billion.
Looking ahead, Minsheng Securities aviation analyst, Zhang Zhuo is optimistic about the (GUN)’s full-year financial performance, owing to the continuous growth of domestic traffic. “(GUN) operates 80% of its flights on domestic routes,” the analyst said, noting the decline of domestic fuel prices also reduces (GUN)’s operating expenses. Additionally, “Yuan appreciation” has boosted its financial performance for 2011 as the carrier steadily expands its international market.
(GUN)'s partner, China Airlines (CHI) is now serving 20 mainland China cities, up from zero before deregulation.
Boeing (TBC) has delayed the delivery of China Southern Airlines (GUN)'s first 787 from December until July 2012. (GUN)'s order for 10 787s was placed in 2005 with deliveries originally scheduled to begin in 2008. It is unlikely the carrier will cancel the order given that its first 787 is already on Boeing's production line.
(GUN) has been committed to international expansion owing in part to domestic competition with high speed rail. To meet demand, (GUN) CFO, Jiebo Xu pointed out (GUN) must choose between the A330 or 777 to operate routes on which it had planned to use 787s, such as its new Guangzhou (CAN) - London Heathrow route scheduled to launch in March 2012. In the coming months, (GUN) plans to open more international routes, including Beijing (PEK) - (CAN) - Brisbane, (PEK) - (CAN) - Perth, and (PEK) - Urumqi - Istanbul.
1 A320-214 (4880, B-6817), ex-(D-AVVA), (GEF) leased, 2 A320-232s (4864, B-6813; 4883, B-6812), (GCP) leased, and 3 E190LRs (0477, B-3147; 0483, B-3148; 0488, B-3149) deliveries.
Airbus has delivered the first of five A380s to China Southern Airlines (GUN), the first A380 operator in China. Powered by Rolls-Royce (RRC) (Trent-900) engines, the airplane will be initially operated on domestic routes between Beijing, Shanghai and Guangzhou. Later on, the airline will deploy the A380 on international routes.
A380-841 (031, B-6136), delivery.
November 2011: China Southern (GUN) launched its fourth route to Australia on 8 November when it became the first airline to connect Mainland China with Perth (PER) in Western Australia. Flights are operated from Beijing airport (PEK) via Guangzhou airport (CAN) three times weekly (on Tuesdays, Thursdays and Saturdays, returning the following day) with 284-seat A330-300 airplane. (GUN) already flies to Brisbane, Melbourne and Sydney in Australia.
737-81B (38963, B-5609), and 2 A320-232s (4912, B-6816), ex-(F-WWBQ), (ALE) leased; (4928, B-6815), ex-D-AXAC, (GEF) leased.
January 2012: 737-81B (38916, B-5642), delivery.
February 2012: Delta Air Lines (DL) has expanded code share agreements with SkyTeam (STM) Alliance partners China Eastern (CEA) and China Southern (GUN) airlines, allowing both Chinese carriers to place their codes and flight numbers on (DAL)-operated flights between Seattle and Beijing (PEK). In addition, (CEA) will place its code and flight numbers on (DAL)-operated flights between Detroit and (PEK).
The Chinese government has raised domestic jet fuel prices to CNY7,465/$1,186 per ton, up +1.43% from CNY7,360 per ton in January, dealing another blow to Chinese carriers that have already suffered from a decline in domestic market demand and air fares following the Chinese Spring Festival.
This is the first fuel price hike this year. In January, the Chinese government cut domestic jet fuel prices by -3.83%. Since July 2011, Beijing has made monthly adjustments to domestic fuel prices based on fluctuating international fuel prices.
Fuel costs comprise more than >40% of Chinese carriers’ operating expenses. China Southern Airlines (GUN), which operates 80% of its flights on domestic routes, could see its fuel costs increase by +CNY273 million annually. Air China (BEJ) and China Eastern Airlines (CEA), which operate 70% of their flights on domestic routes, could see their annual fuel costs rise by +CNY234 million and +CNY242 million, respectively.
Despite the increase of domestic fuel price, Chinese airlines cannot raise fuel surcharges to offset rising fuel costs.
China has prohibited its airlines from participating in the (EU) Emission Trading Scheme (EU ETS), escalating the row over the new and controversial carbon emissions tax. According to a "Reuters" report, the Chinese government’s State Council issued a statement on its website that said Chinese carriers were prohibited from participating in (EU ETS) without government approval, and they were also barred from using (ETS) as a reason to raise fares.
The Association of Asia-Pacific Airlines (AAPA) Director General, Andrew Herdman told "Reuters" the ruling put Chinese carriers in a difficult position because they have to comply with (EU ETS), or risk large fines, while also being told by their government that they must not comply. “We’re now at the stage that it’s absolutely clear that a whole host of foreign governments are not going to allow the (EU) to do this,” Herdman said.
Chinese carriers are supporting Beijing’s decision to prohibit its airlines from participating in the European Union Emissions Trading Scheme (EU ETS), while still reserving the right to file a lawsuit.
“We are quite supportive of our central government’s decision and we think the real solution should be a global approach through [ICAO],” China Eastern Airlines (MU) Chairman, Liu Shaoyong said. He emphasized that domestic carriers are reserving the right to file a lawsuit against the (EU ETS).
China Air Transport Association (CATA) Director General, Wei Zhenzhong said that “Beijing’s decision reflects Chinese carriers’ wishes and also is quite helpful to protect the real interest of domestic airlines and air travelers.” (CATA) estimates operating expenses of Chinese carriers will increase by +CNY800 million/+$127.2 million annually because of (EU ETS). Air China (BEJ), which operates the most European routes, is expected to see the largest rise in expenses (+CNY200 million). (CEA) is expected to follow at +CNY100 million.
Expenses associated with the (EU ETS) are predicted to keep rising as Chinese carriers open more international routes to Europe to compete with the high speed rail. This year, (BEJ) is scheduled to launch service from Shanghai - Paris and China Southern Airlines (GUN) plans to open a Guangzhou - London route.
Wei said that Beijing’s decision was just the first step in the escalating row over the new controversial carbon emissions tax, as Chinese carriers will most likely be suspended from flying to Europe, a consequence of “not joining (EU ETS).” As a result, the Chinese government is considering counter measures against the (EU ETS) with Russia, India, Brazil, and other countries.
(GUN) will put its A380 on the Beijing - Hong Kong route starting from March 2, according to the airline's website. The Beijing - outbound flight CZ310 is scheduled to leave Beijing Capital International Airport at 08:50 am, with arrival at Hong Kong International Airport at 12:20 pm. The return flight CZ309 is scheduled to take off from Hong Kong at 14:40 pm, arriving in Beijing at 17:50 pm.
737-71B (38917, B-5285), delivery.
China Southern Airlines (GUN) has agreed to buy 10 777-300ERs, pending Chinese government approval, to meet growing demand in Asia/Pacific and China.
March 2012: China Southern (GUN) launched a new leisure route to Thailand from its main hub in Guangzhou airport (CAN) in southern China on 26 March. The SkyTeam (SKT) alliance airline now serves Koh Samui (USM) 2x-weekly with A319s, complementing its Thai services to Bangkok and Phuket out of Guangzhou.
April 2012: China Southern Airlines (GUN) reported a 2011 net income of +CNY5.11 billion/+$805.7 million, down -11.8% from +CNY5.79 billion in 2010, due to high fuel prices and weak cargo growth.
Operating revenue increased +18.2% to CNY90.39 billion, while expenses climbed +23.2% to CNY87.06 billion. Fuel expenses increased +39% to CNY32.67 billion.
Traffic (RPK)s grew +9.9% to CNY122.3 billion against a lift of +7.5% in capacity (ASK)s to 151.06 billion. Passenger boardings increased +5.5% to 80.7 million with an average load factor of 81% LF, up +1.8 points over the year-ago period. Cargo traffic volume rose +1.6% to 1.135 million tonnes.
(GUN) expects its first-quarter net profit to drop by more than half compared to the +CNY1.24 billion/+$190 million reported in the year-ago quarter, according to a statement released by the Shanghai Stock Exchange.
(GUN) cited the slowdown of the domestic growth rate, high fuel prices and the “reduction of exchange gain by a big margin” as main reasons for the gloomy forecast.
China’s other carriers are also bracing for a profit drop. “In the first quarter, domestic carriers increased operating expenses [mainly fuel costs] by -22%, which has a big negative impact over Chinese airlines’ financial performance. To make matters worse, domestic carriers got less exchange gain this quarter over the year-ago quarter,” Great Wall Securities aviation analyst, Liu Kun said.
Chinese carriers reported a collective loss of -CNY540 million in February and -CNY200 million in March.
Air China (BEJ) and China Southern Airlines (GUN) saw their first-quarter income plunge due to high fuel prices and the slowing of yuan appreciation, according to carrier statements released by the Shanghai Stock Exchange.
(BEJ) reported first-quarter net income of +CNY239 million/+$37.8 million, down -85.7% over +CNY1.67 billion in the year-ago quarter. Operating revenue increased +7.7% to 22.9 billion against an increase of +16.9% in operating expenses to CNY22.71 billion.
(GUN) posted a first-quarter net income of +CNY319 million, down -74.2% from +CNY1.23 billion in the same quarter of last year. Operating revenue climbed +15.5% to CNY23.7 billion, while operating expenses jumped +23.8% to CNY23.4 billion.
Industry analysts also cited market demand slowdown as the main reason for the results.
China Eastern Airlines (CEA) earlier predicted its first-quarter profit will drop by more than half from CNY1.01 billion reported in the year-ago quarter, citing similar reasons.
As of December 31, 2011, (GUN) operated 444 airplanes. It introduced 22 airplanes in 2011.
Looking ahead, (GUN) said it will take advantage of the long-term stable economic growth of China and the “domestic consumption upgrade” that will stimulate the continuous growth of market demands. (GUN) warned that weak global economic growth and the slowdown of the domestic economic growth rate could weaken the operating environment. Rising fuel prices, growing competition rapidly growing domestic capacities remain challenges for the airline.
Industrial Securities said (GUN)’s A380 operations may have a negative effect on the airline, hurting its financial performance due to the airplane’s frequent malfunctions and the fact that it still hasn’t secured approval for use on international routes. (GUN) operates the A380 on its Beijing (PEK) - Guangzhou and (PEK) - Hong Kong routes.
(GUN) received the first of five A380s in October 2011.
May 2012: The Chinese government has cut domestic jet fuel prices to CNY7,932/$1,257) per ton, down -1.6% from CNY8,061 per ton as international fuel prices keep fluctuating.
This is the second time the Chinese government has reduced domestic jet fuel prices this year. Beijing cut domestic fuel prices -3.8% to CNY7,360 per ton in January from CNY7,653 per ton in December. The Chinese government has raised fuel prices three times this year.
Fuel costs comprise more than 40% of China’s big three carriers total operating expenses, so it is expected the reduction will give some relief to Chinese carriers.
China Southern Airlines (GUN), which operates 80% of its flights on domestic routes, could see its fuel costs decrease by -CNY335.4 million annually. Air China (BEJ)) and China Eastern Airlines (CEA), which operate 70% of their flights on domestic routes, could see their annual fuel costs reduce by -CNY287.26 million and -CNY297.2 million, respectively.
June 2012: China Southern Airlines (GUN) is the first carrier offering scheduled charter service to Turpan Jiaohe airport (TLQ) in China’s Xinjiang province. It will operate two weekly EMB-190 services from Xi'an Xianyang International airport (XIY) that will be launched on July 3. Turpan airport is located approximately 160 kilometers southeast of Urumqi Diwopu International airport (URC).
July 2012: On 12 July, China Southern (GUN) resumed services to Tashkent (TAS) from Urumqi (URC) in the north-western Chinese region of Xinjiang Uyghur, and now offers a total of 15 international destinations from the airport. Weekly services are now operated using 737-200 equipment. The Uzbek capital was previously served by China Southern (GUN), but flights on the 1,500 km route were discontinued in April 2010 owing to bilateral issues. Currently, there is no competition on the route, but Uzbekistan Airways (UZB) are also expected to resume services shortly.
China Southern Airlines (GUN) will operate an A380 on its Guangzhou - Los Angeles route from October 12 to accelerate its international expansion pace.
Industry analysts said Chinese travel to the USA has increased after the USA government loosened its visa issuance policy for Chinese citizens.
(GUN) ordered five A380s and introduced its first A380 last October. It has taken delivery of three A380s, which operate on two domestic routes, Beijing (PEK) - Guangzhou and (PEK) - Hong Kong. (GUN) is scheduled to introduce its fourth A380 in the fourth quarter.
(GUN) has been trying to get regulatory approval to operate the A380 on its (PEK) routes to New York and Paris but has not yet received it because (PEK) is Air China (BEJ)’s main operating hub.
The Chinese government will inject about CNY2 billion/$315 million into China Southern Airlines (GUN) for its fleet expansion, according to an industry insider. It is expected to reduce (GUN)’s debt ratio, which was 70.88% at the end of 2011.
(GUN) suspended trading as “the parent company plans to make government capital injection to the carrier.” It will be the third time (GUN) has received a capital injection from Beijing. It received CNY3 billion and CNY1.5 billion in 2008 and 2010, respectively.
Separately, (GUN) announced it has entered into 12-year lease agreements with Air Lease Corporation (ALE) for 18 new airplanes, scheduled for delivery in 2013, 2014 and 2015. The airplanes comprise 12 737-800s, four A320-200s and two A321-200s. This follows a similar deal recently announced by competitor Air China (BEJ).
Earlier this year, (GUN) sealed a deal with Boeing (TBC) for an order of six 777F freighters and 10 777-300ERs, which will be introduced between 2013 and 2016.
China Eastern Airlines (CEA) and Air China (BEJ) have also received government capital injections of CNY9 billion and CNY2.5 billion, respectively.
(GECAS) (GEF) announced it will lease 10 new 737-800 airplanes with winglets to China Southern Airlines (GUN) as part of (GUN)’s fleet renewal program. The 10 737-800s come from (GEF)’s existing order book with Boeing (TBC) and are scheduled for delivery in 2014.
(GUN) has been a (GEF) customer since the early 1990s. It is one of the largest airlines in Asia with a fleet of more than >400 airplanes flying to more than >200 destinations.
2 737-71Bs (38925, B-5290; 38962, B-5291), 3 A320-232s (5202, B-6908; 5214, B-6897; 5225, B-6909), A321-231 (5237, B-6913), and 2 EMB-100LRs (0556, B-3205; 0560, B-3206), (CDB) Leasing leased.
August 2012: China Southern Airlines (GUN) is considering operating an A380 on its Sydney - Guangzhou (CAN) - London route, dubbed the “canton route.”
“(GUN) does have a plan to use the A380 on the canton route. On our current Sydney route we operate [a] double daily using our A330 airplanes and the load factor has been very satisfying. We are now exploring the possibility of operating the A380 on this route, which means we can operate a triple-daily service. But we have to study if the market will be big enough to digest this capacity,” (GUN) (CEO), Tan Wangeng said.
Tan said in June (GUN) plans to expand its canton route to other European hubs, including Paris and Amsterdam to fully connect Europe with Oceania.
Last month, (GUN) announced it will operate the A380 on its (CAN) - Los Angeles route from October 12 to accelerate its international expansion pace.
(GUN) ordered five A380s and introduced its first A380 last October. It has taken delivery of three A380s, which operate on two domestic routes, Beijing (PEK) - (CAN) and (PEK) - Hong Kong. (GUN) is scheduled to introduce its fourth A380 in the fourth quarter.
China Southern Airlines (GUN) will equip 40 737-700 and 737-800 airplanes with blended winglets, with retrofit performed by Aviation Partners Boeing (APB). The contract represents (APB)’s largest order in its history from a Chinese airline.
"With 40 additional airplanes utilizing our technology, China Southern (GUN) can expect almost +$11 million in additional contribution to profit annually, while reducing their CO2 output by more than >-20,000 tonnes,” (APB) Director Sales & Marketing, Craig McCallum said.
(GUN) already operates 32 blended winglet-equipped airplanes. (APB) said approximately 5,000 blended winglet systems are in service on 737s, 757s and 767s.
EMB-190LR (0564, B-3209), (CDB) Leasing leased.
September 2012: On 27 August, China Southern (GUN) resumed operations on the 1,400 km route from Urumqi (URC) in northwest China to Astana (TSE), the capital of Kazakhstan that (GUN) previously served with a single weekly frequency until March 2007. Following the relaunch, 3x-weekly services are now offered using 737-700s. The Kazakh airline, Air Astana (AKZ) already operates the route with 2x-weekly frequencies.
Air China (BEJ) and its competitor China Southern Airlines (GUN) are planning to cooperate on the route from Beijing to Paris Charles de Gaulle (CDG) from the end of October if they receive government approval for plans to use (GUN) A380-800s on the route currently served by (BEJ) on a daily basis with 777-300ERs. (BEJ)'s (CEO), Cai Jianjiang has confirmed such plans. (GUN) currently uses its first three A380-800s on domestic flights from Beijing to Guangzhou and Hong Kong Chep Lap Kok International (HKG). It will start deploying the A380s on its first international route from October 12 operating daily between Guangzhou and Los Angeles International (LAX). Currently, (GUN) serves Paris (CDG) daily with an A330-200 from Guangzhou, while (BEJ) also serves (CDG) from Shanghai Pudong International (PVG) four times weekly with A340-300s in addition to the daily flight from Beijing. In recent years, (GUN) has struggled to be allocated international traffic rights out of Beijing. It currently only operates international flights from there to Amsterdam Schiphol (AMS), Dubai International (DXB), Jeddah King Abdul Aziz (JED), Seoul Gimpo (GMP), Seoul Incheon International (ICN) and Tashkent Yuzhny (TAS).
China Southern Airlines (GUN) has entered into a joint venture (JV) agreement with government-owned, Henan Civil Aviation Investment to launch a subsidiary, China Southern Henan Airlines Company. The deal will relaunch the former Shenzhen Airlines, subsidiary, Henan Airlines, which has been grounded since a fatal Embraer EMB-190 crash in August 2010. China Southern (GUN) already operates approximately 65 daily flights from Zhengzhou Xinzheng (CGO), Henan province's largest airport with a mix of 3 737-300s and 8 737-800s currently based there.
The (JV) has a registered capital of CNY6 billion/$946 million. (GUN) will invest CNY3.6 billion for a 60% stake in the (JV) and the Henan government will invest CNY2.4 billion for a 40% stake.
A year after taking delivery of its first A380, China Southern Airlines (GUN) has finally received permission from the Chinese government to operate the airplane on long-haul routes, allowing (GUN) to take its four A380s off three daily loss-making short-haul flights. (GUN) would only quantify the A380's losses in the first six months of 2012 as under RMB100 million/USD15.85 million.
But (GUN) still has work ahead of it. Its first of two planned long-haul routes, Guangzhou - Los Angeles, will see capacity increase +77.8% once the A380 is deployed in October 2012. There will likely be a significant period for (GUN) to spool-up profitable demand and appropriately market its sixth freedom network. Its second route, Beijing - Paris (CDG), is not the outcome the carrier would have hoped for: it will have to partner with Beijing-based competitor Air China (BEJ), which as the national carrier enjoys elements of protectionism. But without the cooperation, (GUN) would have struggled to find alternative routes.
October 2012: China Southern Airlines (CZ) has reported a third-quarter net income of +CNY2.22 billion/+$353 million, down -29.3% compared to a net profit of +CNY3.2 billion in the year-ago quarter, mainly due to foreign exchange losses.
Operating revenue climbed +9.4% to CNY29.8 billion, while operating expenses jumped +16.1% to CNY26.94 billion. (GUN) reported CNY518 million in net finance expenses for the quarter, which it attributed to the “depreciation of (RMB) against the (USD),” according to a filing released by the Shanghai Stock Exchange.
The fluctuation between the Chinese yuan and the USA dollar is a major factor for Chinese carriers because much of their airplane purchasing costs are in US dollars.
Looking to the fourth quarter, local industry analysts predicted (GUN)’s profit will continue to decline due to the global economic depression and the fact that the fourth quarter is the traditional low season for all Chinese carriers.
INCDT: A China Southern Airlines (GUN) 757-200 made a forced landing in northwest China’s Gansu province on October 8th after receiving an anonymous terrorist threat, (GUN) and local security sources confirmed.
(GUN) sources told "Xinhua" news that the 757-200, Flight CZ680, traveling from Istanbul to Beijing via Urumqi, made a forced landing in Gansu Zhongchuan Airport in Gansu’s capital of Lanzhou, hours after take-off from Urumqi, capital of northwest China’s Xinjiang Uygur Autonomous Region.
The 757 was scheduled to take off from Urumqi at 2:30 pm and land in Beijing at 5:50 pm, according to the flight’s timetable. Sources with the airport and the local provincial government said the plane made its forced landing in Gansu at around 5:30 pm. All the 196 on board, including 186 passengers and 10 (FC)/(CA)crew members, were evacuated by 5:45 pm.
Officials with the local public security bureau are handling the incident. All the luggage on the plane went through security check at the parking apron at Gansu Zhongchuan airport. No other flights at Zhongchuan airport have been disrupted.
An Internet user who claimed to be one of the passengers on the plane said she was not given any explanation before or after the landing.
“Without the maps app on my mobile phone, I would not even have known where I was,” said Baimifan at Sina Weibo, China’s Twitter-like microblogging website. She was identified as a designer with Puma by the website.
China’s Qingdao municipal government is in negotiations with Air China (BEJ) and its subsidiary Shandong Airlines (SHG) to launch Qingdao Airlines, according to Qingdao Municipal Transport Committee Deputy Director, Zhao Haibin.
According to industry analysts, the Qingdao government is seeking to partner with an established Chinese carrier as new Civil Aviation Administration of China (CAC) standards for new entrants make it difficult to launch new carriers.
All major Chinese carriers have been forging closer cooperative relationships with local governments. Industry analysts say that subsidiaries enable China’s domestic carriers to receive cash support and enjoy favorable policies from different local governments.
China Southern Airlines (GUN) last month launched Chongqing Airlines and entered into a joint venture agreement with government-owned Henan Civil Aviation Investment to launch a subsidiary, China Southern Henan Airlines Company.
November 2012: 1st delivery of 10 787-8 Dreamliners (GEnx) (43-34925, B-2727), 4F, 24C, 200Y. It will enter service on the Sydney - Guangzhou - London "Canton" route - - SEE PHOTO - - "GUN-2012-11 - 1ST 787."
China Southern (GUN) has selected a comprehensive package of Rockwell Collins avionics for 16 new A330 airplanes. The deal includes Rockwell Collins’ MultiScan™ Threat Detection System, the GLU-925 Multi-Mode Receiver (MMR), the industry’s first (MMR) certified for precision landing, using either Global Navigation Satellite Systems (GNSS) or Instrument Landing Systems (ILS), and SAT-2100 satellite communications system.
Rockwell Collins’ WXR-2100 MultiScan™ Threat Detection System (with more than >4,100 systems flying on over 145 airlines today) provides weather assessment that helps pilots (FC) easily discern between threatening and non-threatening weather. It also alerts them to other atmospheric threats that may be invisible to the naked eye, such as the potential for turbulence, lightning or hail, all presented through an optimized, clutter-free display that increases crew situational awareness while reducing pilot (FC) workload.
The advanced GLU-925 Multi-Mode Receiver is the primary navigation sensor for all phases of flight, and meets the stringent Required Navigation Performance (RNP) requirement of 0.1 nm. As the first-ever certified (GPS) Landing System receiver, the Rockwell Collins GLU-925 offers high performance and dependability for Category III (ILS) and Performance-Based Navigation (RNAV)/(RNP) operations.
The SAT-2100 is a compact, light weight and economic Inmarsat satellite communications system that enables real-time information for passengers and flight crew (FC). It operates multi-channel voice, facsimile and two-way (PC) data exchange capability. The SAT-2100B also enables up to two simultaneous Swift64 or SwiftBroadband channels using its HST-2110B and HCM-2100B companions.
(GUN) also selected the following sensors: (ADF)-900 Automatic Direction Finder, (DME)-900 Distance Measuring Equipment, (HFS)-900D High Speed Data Radio, (VHF)-2100 Very High Frequency Transceiver, (CPL)-920D Coupling Unit and (VOR)-900 (VHF) Omnidirectional Radio.
December 2012: China Southern Airlines (GUN) has committed to purchase 10 A330-300s, in a deal valued at $1.9 billion, according to "Reuters." Deliveries will be from 2014 to 2016.
(GUN) said to "Reuters" that “the new airplanes would be funded through internal resources and loans from commercial banks and that the catalog price of one A330-300 airplane was $188 million.”
January 2013: China Southern (GUN), with its new A380 flights
to Los Angeles and recently-launched flights to London, is expanding
overseas. It grew international capacity (ASK)s +23% last year.
Four SkyTeam (STM) Alliance airlines have launched a new program to strengthen their ties on services between China, Taiwan, and Hong Kong. Taiwan's China Airlines (CHI) and mainland Chinese carriers: China Southern Airlines (GUN), China Eastern Airlines (CEA), and Xiamen Airlines (XIA) have launched the Greater China Connection program, in which the airlines will jointly develop marketing and product strategies for travellers throughout greater China.
The program will give members of each carrier's frequent flyer programs mutual privileges and lounge access, while the combination of code shares across the four carriers will allow passengers more flexibility, say the airlines. They add that the program will extend across 41 airports and include more than >270 cross-strait flights per week.
The program will enhance the positions of the four carriers in the important cross-strait market, which has grown considerably since first direct flights between China and Taiwan started in 2009 on the back of strong business and leisure traffic.
In December 2012, the two countries were scheduled to hold talks that are expected to lead to an increased number of flights across the straits.
2 737-81Bs (38936, B-5715; 38937, B-5716), deliveries and A320-232 (5288, B-6975), ex-(B-513L), (ICBC) Leasing leased.
February 2013: China Southern Airlines (GUN) commenced services on the route from its Guangzhou (CAN) hub, to Cairns (CNS) in the far north of the Australian state of Queensland. Thrice-weekly departures are offered on the route and will be operated via Brisbane on the outbound leg. A330-200s are deployed to operate the 5,700 km route. (GUN) offers flights to six points in Australia, up from only two in 2009, and continues to develop what is called the “Canton Route” to Europe.
SkyTeam (STM) Alliance member carriers that currently operate out of Beijing Capital Airport are planning to move to the new airport in Daxing. The new airport, currently under construction, is expected to be completed by October 2017; formal operations are scheduled to begin in 2018.
China’s (STM) Alliance members (including China Southern Airlines (GUN), China Eastern Airlines (CEA) and Xiamen Airlines (XIA)) currently operate in Beijing Capital Airport’s Terminal 2. (STM) Alliance Managing Director, Michael Wisbrun has reportedly discussed the plan to move to the new airport with the Civil Aviation Administration of China (CAAC) (CAC).
The new airport, which was approved at the end of last year, will have six runways for civilian use and will be located in southern Beijing’s Daxing district. It has not officially been given a name yet.
Once the airport is operational, the Beijing Nanyuan Airport (which serves as a military and civilian base for China United Airlines (CUL) in the southern Fengtai district) will be closed. China United Airlines (CUL), a wholly owned subsidiary of China Eastern Airlines (CEA), is also expected to move to the new airport.
The new airport, which has been in the planning stage for years, will shoulder part of the traffic at Beijing Capital Airport. Last year, Beijing Capital handled 80 million passengers, exceeding its planned capacity of 76 million passengers by 2015. The planned capacity for the Beijing Daxing airport is 70 million passengers a year, but will initially handle 45 million passengers a year after the first stage is completed.
March 2013: China Southern Airlines (GUN) reported a 2012 net profit of +CNY2.62 billion/+$417.4 million, a -48.2% drop from net income of CNY5.08 billion in 2011.
Operating revenue rose +9.5% to CNY101.48 billion, while operating expenses increased +11.7% to CNY85.93 billion. The rise in expenses was mainly owing to a +14.5% year-over-year jump in fuel costs to CNY37.4 billion.
(GUN) said a number of factors contributed to the profit decline, including a rapid increase in capacity, “intensifying market competition,” higher fuel prices and a “sharp decrease of exchange gains.”
Passengers carried grew +7.2% year-over-year to 86.5 million. Average load factor was 79.9% LF, down -1.1 points from 2011. Passenger traffic revenue increased +9.4% to CNY91.76 billion. Cargo traffic volume rose +8.5% to 1.23 million tonnes and cargo traffic revenue climbed +13.5% to CNY6.62 billion.
(GUN) took delivery of 54 airplanes in 2012, while retiring seven. It operated a total of 491 airplanes as of December 31, 2012.
(GUN) said it expects “moderate economic growth” domestically this year leading to the “gradual recovery of domestic market demand.” But it warned that “international market demand would register slow growth” owing to a weak global economy. It is targeting a +9.4% year-over-year increase in passengers carried in 2013 to 94.6 million and expects cargo traffic volume to grow +8.4% to 1.34 million tonnes.
April 2013: China Southern Airlines (GUN) reported a net profit of +CNY57 million/+$9.16 million in the first quarter, down -82% compared to net income of +CNY319 million in the year-ago quarter.
China Southern Airlines (GUN) will continue to increase capacity in Australia and New Zealand over the next few years to further explore the market potential of its so-called “Canton route,” despite global economic uncertainties.
(GUN) said it will increase weekly round-trip service from 38 to 110 on Australia and New Zealand routes by the end of 2015. It has increased capacity by more than >50% annually since 2009.
Such a move will enable (GUN) to promote its Canton route and compete against the so-called “Kangaroo route,” which traditionally refers to routes flown by Qantas (QAN) between Australia and the UK. China Southern (GUN) hopes to attract transfer passengers in Guangzhou between Europe and Oceania. Last year, (GUN)’s passenger boardings reached more than >70,000 on its Canton route.
Earlier this month, (GUN) signed a strategic cooperation agreement with the New Zealand government to celebrate the second anniversary of its Guangzhou - Auckland route. According to (CEO), Tan Wangeng, passenger boardings on this route climbed +134.6% to 122,000 in 2012. (GUN) is considering opening new routes from Guangzhou to Christchurch or Wellington.
China Southern Airlines (GUN) further enhanced its presence at Taipei Taoyuan (TPE), as it connected the city with Dayong (DYG), located in the Hunan province of China on 15 April. As the only carrier offering flights on the 1,200 km route, (GUN) operates thrice-weekly flights using A320s.
The use of head-up displays (HUDs) in Chinese commercial airplanes has made a key advance in China with the decision by one of the country’s three biggest airlines, China Eastern (CEA), to introduce the technology into its narrow body airplanes.
With the Civil Aviation Administration of China (CAAC) (CAC) targeting near-universal use of (HUD)s by 2025, (CEA) has ordered Rockwell Collins (HUD)s for 58 737s, with deliveries due from mid-2013 to 2015.
Okay Airways (OKA), a much smaller carrier, has ordered the same equipment for 10 737s, with similar delivery dates to (CEA)’s.
(HUD)s are becoming steadily more common in commercial aviation globally because they increase safety and landing opportunities in bad weather by keeping pilots (FC)’s attention outside of the airplane, and they also can help guide the landing. But the (CAAC)’s policy is making manufacturers optimistic that the Chinese market will mature early.
Thales (THL) and Rockwell Collins are well positioned as the suppliers for the A320 family and the 737, respectively.
The Chinese market alone is considerable. Rockwell Collins, for example, says its (HUD), the Head-up Guidance System (HGS), has a catalog price of about $350,000 per set. On that basis, the two contracts announced on April 2 are worth about $24 million, before discounts.
Shandong Airlines (SHG) appears to have been the first Chinese carrier to begin using (HUD)s. It ordered the (HGS) for 737s around the middle of last decade, says Rockwell Collins Commercial Systems in China.
China Southern (GUN) ordered its five A380s with Thales (THL) (HUD)s. Xiamen Airlines (XIA) uses Rockwell Collins (HUD)s on its 737s.
May 2013: While China Southern (GUN)'s announcement to serve Sydney from October 2013 with the A380 may be good for Australia at large, for (GUN) there are limited upsides besides strategic ambition and slowly ending its negative perception from not being able to use the A380 in international markets.
(GUN) will replace one A330 Sydney service with the A380, generating a +41% increase in capacity, which will likely make the service loss-making for some time. Sharper increases will occur in the premium cabins, where daily business (C) class seats will rise from 48 to 100 and first (F) class from four to eight.
The increase in capacity will occur in an already over-saturated Australia/NZ - Asia market, which is seeing increased capacity from AirAsia X (ASX), Air New Zealand (ANZ), Emirates (EAD), Qantas (QAN), Scoot (SCT) and Singapore Airlines (SIA).
Siberia - China seat capacity grew +202% between 2003 and 2012 and China's northern City of Harbin is now jockeying to become a network hub for Siberia. The airport accounts for 15% of Siberia - China capacity, far less than the largest Chinese airport, Beijing, 1000 km to its southeast. Harbin offers geographical advantages to Siberian cities in the far east, while Beijing can serve those with some circuitry as well as western Siberian cities. Urumqi in China's far west could also be a hub for Siberia, supporting China Southern (GUN)'s development of Urumqi as a West Asia/(CIS) hub.
The motivation is simple. Siberia's 40 million population has proven an increasingly important trade relationship for China – so much so that in the economic turmoil of 2009, Siberia was the only part of Russia to maintain a positive investment trend. China is tapping Siberia for resources ranging from wood to oil and, increasingly, hydroelectricity from Siberia's numerous rivers. Russia's largest private energy company forecasts Siberia's Gross Domestic Product (GDP) could triple in 15 years.
The Civil Aviation Administration of China (CAAC) has granted an airworthiness certificate for the Boeing 787, clearing the way for China Southern Airlines (GUN) to take delivery of its first 787 at the end of May or early June.
(GUN) is expecting to take delivery of its first 787-8 by early June, making it the first Chinese operator of the type. The 787 schedules have been made and the first pilots (FC) have been trained. (GUN) is likely to receive at least half of its 10 787s on order within the year, which means it will be taking one 787 per month on average for the next several months. The 787 will first be used on domestic services, likely from its base in Guangzhou to major cities such as Beijing and Shanghai, before it is used on international routes.
Hainan Airlines (HNA) will be the second Chinese operator of the 787, with (HNA) also scheduled to take its first 787 in June, and a total of seven 787s by year-end. (HNA) has 10 787-8s on order.
June 2013: This month, China Southern (GUN) became the first Chinese airline to take delivery of the game-changing 787 airplane which will be used as part of its international expansion plans.
(GUN) has 10 787 Dreamliners on order. According to (CEO), Tan Wangeng, the rest of the airplane order will be delivered by the end of next year. Tan noted the airline’s first 787 will be initially operated on its Beijing - Guangzhou route beginning June 6. Later, it will be used on long-haul routes to Paris, Vancouver, London, and Auckland.
(GUN) is the tenth customer worldwide to take delivery of the 787, which was granted an airworthiness certificate from the Civil Aviation Administration of China (CAAC) in May.
In recent years, (GUN) has accelerated its international expansion pace, especially on its Canton route between Australasia and major European gateway cities, as part of an overall strategy to grow its international network and attract more business (C) travelers.
Air China (BEJ) has 15 787s on order, Hainan Airlines (HNA) has ordered 10 787s and Xiamen Airlines (XIA) has six of the type on order.
Hainan Airlines (HNA) is scheduled to introduce its first 787 at the end of June, while Xiamen Airlines (XIA) is expected to take delivery of its first 787 in July 2014; the rest of the airplanes will be introduced between 2014 and 2015. Xiamen (XIA) plans to operate its 787 Dreamliners to open more international routes to Europe and the USA.
(GUN) has outlined its planned international 787-8 route network following the recent inauguration of the type on flights between Guangzhou and the Beijing Capital. The routes planned include Guangzhou to Paris (CDG), Vancouver International, London Heathrow, and Auckland International. No precise launch dates have been given as, under indefinite restrictions placed on the type by the Civil Aviation Administration of China (CAAC) (CAC), the 787 is presently only allowed to operate on domestic Chinese flights.
4 737-81Bs (38947, B-5743; 38948, B-5745; 38953, B-5746; 38961, B-5747), 2 A320-232s (5561, B-9912; 5564, B-9916), A330-323E (1425, B-5922), deliveries.
July 2013: China Southern Airlines (GUN) officially launched an all-freight cargo service between Guangzhou and Frankfurt, Germany, with a Boeing 777-200F freighter taking off from Guangzhou Baiyun International Airport (CAN) at 01:00 am. It was (GUN)'s third scheduled cargo service in Europe.
The flight is scheduled to be operated three times a week: - taking off from Guangzhou airport at 1:00 am Monday and Wednesday and at 6:55 am on Friday. As of now, there are 4 all-freight cargo routes departing Guangzhou, with 10 times every week.
Since the air transportation demand between China and Germany is very strong and the market flourishes, the China - Germany cargo route is referred to as the "golden route" linking the two countries. While, Frankfurt situated in a superior geographical position, is the most important cargo destination and source, which is not only close to the German economic center, but also has a convenient transportation network across the Europe.
After launching the cargo flights, it becomes easier for the cargo goods from Guangzhou to be delivered to Frankfurt and other European cities via Frankfurt. This flight is capable of providing more than >270 tons of capacity every week; meanwhile, it only takes 12 hours for the cargo in Guangzhou to be delivered to Frankfurt, which can save 1 day at least over the previous Guangzhou - Amsterdam - Frankfurt route.
China Southern (GUN) has launched three international cargo services in succession: - Guangzhou - Amsterdam; Guangzhou - Chongqing - Amsterdam; and Guangzhou - Qingdao - Los Angeles - Zhengzhou. The newly opened Frankfurt service will further expand (GUN)'s cargo service network and promote the building of its Guangzhou Hub.
According to the Cargo Department of (GUN), 2 more Boeing 777Fs will be delivered to China Southern (GUN) in the second half of this year. By then, (GUN) will further enhance capacity on Europe and America cargo routes by increasing flight infrequency and opening new destinations, to provide passengers with more considerable and efficient services.
(GUN) will launch international 787-8 operations with Guangzhou to Auckland International, New Zealand set to début from December 4. Despite having taken delivery of two 787 Dreamliners thus far, owing to restrictions placed on new airplane types operating on the Chinese registry by the Civil Aviation Administration of China (CAAC) (CAC), the 787 is presently only allowed to operate on domestic Chinese flights between Beijing Capital, Guangzhou, and Shanghai Hongqiao.
(GUN) launched twice-weekly services on its third route to the Thai resort of Phuket (HKT) on July 20. (GUN), which already offers thrice-weekly flights to Phuket from Guangzhou and weekly from Guiyang, chose Shenzhen (SZX) for the third link. A320s are used to operate this seasonal service, which is scheduled to terminate on August 28.
2 737-7K9s (30041, B-2162; 30042, B-2163), ex-(N341TR & N342TR), 787-8 (34927, B-2733), 4 737-81B (38494, B-5759; 38950, B-5782; 38957, B-5780; 38958, B-5781), A320-214 (5693, B-9929), ex-(F-WWDM), Aircraft Purchase Fleet leased, A320-232 (5579, B-9932), ex-(B-508L), deliveries.
August 2013: China Southern Airlines (GUN) has reported a first-half net profit of +CNY 302 million/+$49 million, down -32.7% compared to a net income of +CNY 449 million in the year-ago period.
WestJet (WJI) said it has entered into a code share agreement with China Southern Airlines (GUN) and will now begin marketing and distributing WestJet (WJI)-operated flights. Under the agreement, China Southern (GUN) will place its CZ code on select WestJet (WJI) flights connecting between Vancouver and Edmonton, Kelowna, Ottawa, Montreal, Winnipeg, Prince George, Calgary, Toronto, and Regina.
The code share agreement builds on a March 2013 interline agreement between the two carriers. “Our new code share agreement with WestJet will enhance the value and customer service China Southern Airlines provides to our passengers while also contributing to our growth strategy,” China Southern Senior VP International Affairs and Alliances Zhao Xiaosong said. “Ultimately, this partnership will allow us to provide more products and choices to all our passengers, and enhance our influence in the Sino-Canada market.”
China Southern (GUN) has started flying from Urumqi in the far northwest of China to Haikou in the far southeast of China.
September 2013: China Southern Airlines (GUN) has formally launched its Henan Airlines subsidiary.
China Southern Airlines (GUN) increases from 5x-weekly to daily, Guangzhou - London Heathrow 787-8 service on November 25.
Kenya Airways (KEN) is to open non-stop services to the Chinese city of Guangzhou in November. (KEN), which is linked to the SkyTeam (STM) alliance, is to operate 777-300ERs on the route.
(KEN) says the airplanes will be delivered in October. It already operates daily to Guangzhou via Bangkok. (KEN)'s (CEO), Titus Naikuni, says three of these seven services will be replaced by the non-stop operation.
Kenya Airways (KEN) code shares with China Southern Airlines (GUN) through Guangzhou. (KEN) adds that it is discontinuing services to Hong Kong via Dubai from the beginning of October, flying only via Bangkok three times per week.
October 2013: China Southern Airlines (GUN) has resumed flights between Guangzhou (CAN) and Fukuoka (FUK) in Japan. Flights on the 2,044 km route re-started on October 28th after a one year hiatus, and will operate thrice-weekly on Mondays, Wednesdays and Fridays using an A319. No other carrier operates the route at present. From Guangzhou, (GUN) already serves two other destinations in Japan; Osaka Kansai (twice-daily) and Tokyo Narita (daily).
November 2013: China Southern Airlines (GUN) reported third-quarter net income of +CNY2.16 billion/+$352 million, down -2.62% compared to a net profit of +CNY2.22 billion in the year-ago quarter.
China Southern Airlines (GUN) has introduced 2x-weekly (Wednesdays and Saturdays outbound, returning on Thursdays and Sundays) flights between Guangzhou (CAN) and Denpasar (DPS), which serves the tourism resort island of Bali, in Indonesia. The 3,530 km route, which launched on October 30th, will be served by (GUN)’s 163-seat 737-800s, and will not face any direct competition. This is China Southern (GUN)’s first route to Bali.
(GUN) now connects Changsha (CSX) with Phuket (HKT) in Thailand. 3x-weekly flights using A320s began on the 2,710 km route on November 22nd. (GUN) already serves Phuket from two other Chinese airports; Guangzhou (5x-weekly), and Shenzhen (3x-weekly). No other carrier currently serves the Changsha - Phuket market non-stop. Changsha Huanghua International Airport currently ranks 12th in China, handling almost 15 million passengers in 2012, about the same number as Helsinki.
New Zealand has welcomed its first scheduled 787 Dreamliner flight from China Southern (GUN), on the same day (GUN) up-gauged its Sydney service to an A380. (GUN)’s A380 move will boost the Guangzhou - Sydney by 162,000 seats a year. “This additional A380 for Sydney will add more than >160,000 annual seats, boosting tourism and trade between Australia and China, delivering a further estimated $100 million in additional annual visitor expenditure to the New South Wales economy, and providing an associated increase in jobs. Last year, China Southern (GUN) carried more than one in five of all Chinese visitors to Australia, and the introduction of the A380 is the most powerful indication yet of (GUN)'s future ambitions and confidence in the Australian market.”
December 2013: China Southern Airlines (GUN) introduced daily flights on December 1st between its Guangzhou (CAN) base and Chiang Mai (CNX) in Thailand. The 1,560 km route, which is not served by any other carrier, will be served by (GUN)’s 737-700s. Guangzhou becomes the sixth Chinese airport to have scheduled non-stop flights to Chiang Mai, the others being Beijing (Air China (BEJ)), Chongqing (Shandong Airlines (SHG)), Kunming (China Eastern Airlines (CEA)), Shanghai Pudong (Juneyao Airlines (JYA)) and Wuhan (Air China (BEJ)). The Chiang Mai region of Thailand is home to numerous tourist attractions, and passenger numbers at the airport have risen rapidly in recent years to 4.5 million in 2012.
China Southern Airlines (GUN) is expected to establish a code share alliance with Qantas (QAN) in early 2014 to strengthen its position between Europe and Australia and New Zealand on the so-called “Canton routes.”
According to the deal, both carriers would code share on four international routes from Guangzhou to Sydney, Melbourne, Perth, and Brisbane. The carriers will also code share on 10 Australian domestic routes (Sydney - Brisbane, Sydney - Melbourne, Melbourne - Adelaide, Sydney - Cairns, Sydney - Canberra, Cairns - Brisbane, Melbourne - Brisbane, Sydney - Gold Coast, Sydney - Adelaide, and Sydney - Auckland) and four Chinese domestic routes from Guangzhou to Kunming, Urumqi, Fuzhou, and Xiamen.
In addition, both carriers will cooperate on the exchange of pilots (FC) and cargo.
China Southern (GUN) Chairman, Si Xianmin said that the deal “raised the curtain of deepening cooperation between China Southern (GUN) and Qantas (QAN).”
Qantas (QAN) (CEO), Alan Joyce said the deal allows his airline to tap into the world’s fastest growing aviation market.
In recent years, (GUN) has committed to enhance its position on the Canton routes. It operates nearly 45 weekly flights to Australia and New Zealand.
China Southern Airlines (GUN) has added two new routes from Nanning (NNG) in Southern China. On December 10th, (GUN) resumed 4x-weekly flights on the 1,280 km route to Bangkok Suvarnabhumi (BKK), a route it had served in the summer of 2010. Hainan Airlines (HNA) already serves the market with 3x-weekly flights. On December 11th, (GUN) added 3x-weekly flights to Singapore (SIN), a 2,420 km route that is already served 3x-weekly by China Eastern Airlines (CEA). The service originates in Guilin enabling same airplane, one-stop service between Singapore and Guilin. Both routes will be operated by 737-800s, and will complement (GUN)’s existing international service from Nanning to Taipei. In 2012, Nanning Wuxu International Airport handled just over >7 million passengers, ranking it 27th among Chinese Airports.
(GUN) plans to establish a branch company in Yunnan province to further explore the tourism market in West China. It is awaiting approval from the Civil Aviation Administration of China (CAAC) (CAC).
Currently, (GUN) has allocated three to four airplanes in the Yunnan province capital of Kunming. (GUN) launched A380 operations on its Kunming - Beijing route in July.
Other domestic carriers are also exploring the Yunnan market. Xiamen Airlines (XIA) set up an overnight base in Kunming in July and distributed one 737-800 to Kunming airport. Hainan Airlines (HNA) subsidiary, Beijing Capital Airlines (DER) has opened several new routes from Kunming and Lijiang (in the Yunnan province) and has allocated two airplanes to Lijiang airport. Hainan (HNA)’s other subsidiary, Kunming-based Lucky Air (LKY), has boosted capacity to Yunnan by opening new routes and increasing flight frequencies. China Eastern Airlines (CEA), which has a major share of the Yunnan market, has also increased capacity to Yunnan by allocating nine more airplanes to its Yunnan branch company this year to open more than >10 new routes and add frequencies.
In May, Kunming-based, Ruili Airlines received (CAAC) approval and is preparing to launch operations.
Most domestic carriers in Yunnan (one of the most popular tourist destinations in China) are suffering from operating losses owing to fierce competition and price wars as they must reduce fares to attract leisure travelers.
3 787-8s (34924, B-2726; 34928, B-2737; 34930, B-2736), 2 A320-232s (5750, B-9958; 5797, B-9959), A321-231 (5890, B-9960), and 2 ERJ-145LIs (0701, B-3060; 0804, B-3063) deliveries.
January 2014: SEE ATTACHED - - "GUN-2014-01-TOP 2013 WORLD AIRLINES-A/B."
China Southern Airlines (GUN) has resumed flights between Shenyang (SHE) and Fukuoka (FUK) in Japan. It last operated the service on November 10th 2012, but on December 21st 2013, (GUN) once again started serving the 1,100 km route using A319s on Saturdays and Tuesdays. No other carrier connects these two cities with non-stop flights. (GUN) already serves Fukuoka with 3x-weekly flights from Guangzhou.
China Southern Airlines (GUN) will deploy an A380 to Shenzhen Bao'an International Airport (SZX) in the first half of this year, said Liu Guojun, General Manager of Shenzhen Branch, China Southern Airlines Company, Ltd on January 6. The A380 is expected to operate the Shenzhen - Beijing route after deployment.
Presently, there are only few large airplanes at Shenzhen airport. Apart from one A380, (GUN) plans to assign another two A330-300 airplanes to the airport this month, and will have 6 A330 wide body airplanes registered at Shenzhen this year, a sign Shenzhen airport will usher in a new era of wide body airplanes.
After the airport gets approval of upgrading to a "4F"-class airport and improves its supportive facilities, the A380 will fly to Shenzhen. And all the preparatory work will be completed in the first half of the year, said Zheng Weibing, Deputy General Manager of China Southern's Shenzhen Branch.
Since it is somewhat wasteful to operate an A380 on domestic flights, (GUN) hopes the A380 will operate more long-haul international flights in the future.
(GUN) will take delivery of its first Boeing 777-300ER probably between February 17 and 20. (GUN) placed the order for 10 777-300ERs in February 2012, in a bid to expand its capacity to meet growing demand in the Asia-Pacific. (GUN)'s first 777-300ER, registration (B-2099), has been rolled out from the Boeing Everett plant.
The 777 is the world's most successful twin-engine, long-haul airplane. The 777-300ER extends the 777 family's span of capabilities, bringing twin-engine efficiency and reliability to the long-range market.
(GUN)'s 777-300ER will be configured with a total 309 seats in four classes - 4F in first class, 34C in business class, 44PY in premium economy class and 227Y in economy class. The economy (Y) class will employ a 3-3-3 configuration, with a seat pitch of 32 inches.
(GUN) is already a 777 operator with its fleet currently including 777-200s and 777F freighters. (GUN) is expecting to take delivery of an additional four 777-300ERs by the end of this year, one in July, two in August and one in December.
(GUN) will launch its long-awaited service connecting Guangzhou Baiyuan International Airport (CAN) with John F Kennedy International Airport (JFK) on August 6, using the 777-300ER airplane. There will be four weekly flights on Mondays, Wednesdays, Fridays and Sundays. The flight is scheduled to depart (CAN) at 1:40 am and land at (JFK) at 5:45 am, with the return flight departing (JFK) at 11:15 am and arriving at (CAN) at 3:15 pm (all local time).
On January 11, 2014, a 777F Freighter of China Southern Airlines (GUN) from Los Angeles landed smoothly at Shanghai Pudong International Airport (PVG). There was a special guest named YunZi, a baby panda (the national treasure of China) on board this CZ438 flight. This was the first time YunZi came back to China after he was born in San Diego Zoo in the United States.
YunZi is 4 years old now with a weight of 84 kg. Besides fresh bamboo, he also likes to eat banana and cookies with cinnamon flavor. His Father Gaogao (23 years old) and mother Baiyun (22 years old) are of the best favorite pandas to the local people. YunZi is the 3rd panda of theirs, and the 5th panda born in the San Diego Zoo. He has a one and a half years old younger male panda named "little gift."
According to the agreement between China and the USA, pandas born in the USA should come back to China before they are 4 years old. Through the coordination of China Southern (GUN)'s Los Angeles Office and Shanghai Base, YunZi departed from Los Angeles at 10:43 pm on January 9, 2014 and came back home safe and sound after a 14 hour flight.
To ensure the safety and health of YunZi, a special operation team was set up in China Southern (GUN)'s Shanghai Base. They have prepared every procedure together with the ground handler, customs, quarantine inspection and the client 3 days before flight arrival, which includes unloading, disinfection, and transportation to an isolated storage area.
After welcoming this national treasure to an isolated storage area in Pudong Cargo Terminal, the vet made an overall body check for him, fed him with food and water, and placed him on a pallet in the designated quarantine area. YunZi flew to Chengdu on 4:15 pm in the afternoon, then to Wolong Panda Kingdom in Sichuan, where his parents had grown up. This time, the baby panda YunZi is lucky enough to get together with his brothers and sisters in Wolong for a most special Chinese spring festival.
Both Air China (BEJ) and China Eastern Airlines (CEA) have ordered 20 777-300ERs. (BEJ) received its first 777-300ER in July 2011 and now operates 16 of them, while the first 777-300ER delivery for (CEA) is expected in the second half of this year.
Starting from August 6, 2014, China Southern Airlines (GUN) will launch a non-stop route linking Guangzhou and New York, marking (GUN)'s second destination in the USA following Los Angeles.
The Guangzhou - New York service will be offered four times weekly every Monday, Wednesday, Friday and Sunday, with Boeing 777-300ER airplanes. The outbound flight CZ399 is scheduled to take from Guangzhou Baiyun International Airport (CAN) at 1:40 am and arrive in New York at 5:45 am; while the return flight CZ300 will depart from New York Kennedy International Airport (JFK) at 11:15 am and land in Guangzhou at 3:15 pm the next day (all local time). The whole journey will take about 16 hours.
The launching of Guangzhou - New York route will enhance air connection between Guangzhou and the USA, as well as provide convenience for passengers by saving time from transfer.
On January 16, the first day of Spring Festival travel rush, (GUN) assigned two A330-300s into the Shenzhen aviation market, which will add a capacity of around 2,300 seats. It is learnt that the two new airplanes will be mainly deployed on the Shenzhen - Beijing route.
In order to tailor passengers' travel needs during the Spring Festival travel rush, the two A330-300s arrived Shenzhen in the early morning of January 16, and put them into operation in the same day with maiden flights on Shenzhen - Wuhan and Shenzhen - Beijing routes. Later, they will operate popular domestic and international routes to facilitate passengers' traveling, including Shenzhen - Chongqing, Shenzhen - Chengdu, and Shenzhen - Wuhan routes, as well as international charter flights to Australia and Hokkaido.
With the two new ones, (GUN) has six A330-300 airplanes operating in Shenzhen airport. After the Spring Festival travel rush, the 2 A330-300s will operate in Shenzhen - Beijing route, one with largest passenger volume in China, providing 36 flights daily.
Meanwhile, (GUN) will continue to boost capacity in the region this year. In the first half of this year, (GUN) will put A380 Superjumbo into the Shenzhen - Beijing route as well.
China Southern Airlines (GUN) has grown its international network from Shenzhen (SZX) with the addition of two new routes. On January 15th it begins twice-weekly (Wednesdays and Saturdays) A320 service on the 1,730 km route to Jeju (CJU) in South Korea, followed on January 20th by twice-weekly (Mondays and Fridays) A320 service on the 3,470 km route to Denpasar (DPS) in Bali, Indonesia. Neither service faces competition. As a result, (GUN) now operates to 13 international destinations, spread across 10 countries from its Shenzhen base, though only Taipei is served with more than >3 weekly flights.
Chinese state-owned developer, the Greenland Group has signed a strategic partnership agreement with China Southern Airlines (GUN), the country's largest carrier, to develop real-estate projects in and around airports.
The companies will begin working together on mixed-use projects in the northeastern Chinese cities of Shenyang, Harbin, Changchun, and Dalian, the Shanghai-based developer said in a statement.
Greenland will proceed this year with its strategy to further expand its real-estate development projects in different sectors, which will primarily focus on the airport, finance, cultural and creative sectors, as well as the high-tech industry, the company's President & Chairman, Zhang Yuliang, said.
The developer, which last August signed a similar partnership agreement with the country's third-largest carrier, Shanghai-based China Eastern Airlines (CEA), said it expected its operating income to come in this year at 400 billion yuan/US$66 billion, compared with 330 billion yuan in 2013.
At 9:46 pm on January 19, a Boeing 787 Dreamliner of China Southern Airlines (GUN) landed smoothly at Chongqing Jiangbei International Airport (CKG), marking a debut of 787 Dreamliner at the airport.
The (GUN) 787 operated on its Chongqing - Guangzhou route registered a load factor of more than >90% LF, providing more capacity to meet air travel demand during the Spring Festival travel season.
The 787 makes greater use of composite materials in its airframe and primary structure than any previous Boeing commercial airplane. The 787 provides lower cabin noise, better air quality and more comfortable cabin environment for passengers.
Since it received China's first 787 on June 2, 2013, (GUN) has taken delivery of eight 787s, which are mainly deployed on its international services.
February 2014: China's biggest airline, China Southern Airlines (GUN) will launch direct flights from its Guangzhou base to New York this summer, forming a cornerstone service to its fledgling southern China hub as it targets growing international transit traffic.
(GUN)'s decision to add the high-profile route reflects rising domestic competition, but the plan pits the company against some of Asia's biggest airlines also serving the Greater New York area.
Chinese carriers are racing to boost their international reach as an increasingly congested home market puts intense pressure on ticket prices and weighs on earnings. With demand for outbound travel growing, China's three state-owned airlines, which together account for nearly 80% of China's commercial airline traffic, have been adding international flights over the last two years, with a focus on long-haul services.
The state carriers are facing a tougher new reality as the Chinese government moves to liberalize the domestic airline market and promote the development of low-cost carriers (LCC)s. Beijing last May lifted a six-year ban on setting up new independent airlines, signaling a looser grip on the industry.
China Southern (GUN) said it plans to operate four weekly flights into New York's John F Kennedy International Airport from Guangzhou starting in August, extending its North American reach to the East Coast beyond existing west coast gateways of Los Angeles and Vancouver. The plan is to attract travelers not just from China, but from other countries, who would fly to Guangzhou to catch China Southern (GUN)'s service (on so-called transit customers).
"We are taking advantage of an expanding Guangzhou airport to build an integrated international hub for the Asia-Pacific," said Tan Wangeng, China Southern (GUN) (CEO).
(GUN) will deploy its Boeing 777-300ER extended-range airplanes for the 15-hour flight, said Mr Tan, with the first of 10 such jets it has on order entering the fleet this month.
China Southern (GUN) is the world's fifth biggest by passenger numbers, having carried 91.8 million people in 2013, but its international profile is lower and its global footprint smaller than flag carrier Air China Ltd (BEJ), which operates out of Beijing.
China Southern (GUN) is building its international hub in the southern city of Guangzhou, and last year, launched direct flights to Moscow, while increasing frequencies to cities in Australia, New Zealand, the UK, and Canada.
New, more-efficient long-range jets are helping make a larger number of routes commercially viable for the airline, which was the launch customer in China for the Boeing 787 Dreamliner and the Airbus A380 superjumbo.
Yet like its state-owned rivals, China Southern (GUN)'s passenger service standards and schedule reliability still fall short of its key premium Asian rivals, say analysts, hurting its competitiveness.
Guangzhou is just a two-hour train ride away from Hong Kong, home to Cathay Pacific Airways Ltd (CAT), which offers a larger international network and more flight frequencies. In March, Cathay Pacific (CAT) will add its fifth daily flight into the New York area. Meanwhile, airlines in South Korea and Japan are also vying for more transit traffic from Chinese and Southeast Asian travelers.
All this competition means that China Southern (GUN) will have to continue to deeply discount its seats to lure new transit customers, at the expense of profits. (GUN) already offers some of the cheapest fares on tickets between Australia and Europe, even while giving more generous baggage allowances for coach passengers. "An airline must offer attractive fares to gain transit traffic," said Eric Lin, a transportation analyst at (UBS) Securities. He says he doesn't see any compelling reason, apart from price, for Asian travelers to go through Guangzhou, given the hub's relatively limited connectivity and inadequate transfer infrastructure.
This month, China Southern (GUN) inaugurated its Boeing 787 jets on daily flights to Vancouver, providing better seats and passenger amenities to attract traffic. (GUN) said it filled roughly half of the first 787 trans-Pacific flight, or 100 seats, with transit passengers from India and parts of Southeast Asia.
(GUN) in October posted a -3% decline in third-quarter net profit to +2.16 billion yuan/+US $355 million, hurt in part by China's slowing economic growth. (GUN) is scheduled to release full-year earnings in late March.
Chongqing Airlines ((IATA) Code: OQ, based at Chongqing) (CGQ) could be transformed into a Low Cost Carrier (LCC) by parent, China Southern Airlines ((IATA) Code: CZ, based at Guangzhou) (GUN), following reports the airline has now converted its four A319-100s into all-economy (Y) configurations. The revamped airplanes will be deployed on flights on high-altitude and tourist flights out of Chongqing to Lijiang, Lhasa, and Jiuzhaigou. (CGQ) plans to retain first (F) and business (C)-class cabins on its A320-200 services to Guangzhou and Beijing Capital for the foreseeable future, but is reportedly considering converting those airplanes into single-(Y) class layouts as well. As the domestic and regional market begins to intensify, so Chinese carriers increasingly see (LCC)s as a panacea to their problems. Local rival, China Eastern Airlines ((IATA) Code: MU, based at Shanghai Hongqiao) (CEA), is in the process of converting China United Airlines ((IATA) Code: KN, based at Beijing Nanyuan) (CUL) into its first low-cost carrier (LCC) subsidiary.
Premium economy (PY), an air travel class positioned between economy (Y) class and business (C)/first (F) class that made its first appearance in China four years ago, seems to have been ushered in this spring in the domestic aviation industry. Four years after its debut in China, premium economy (PY) class has now taken on a strong growth momentum amid various favorable exterior conditions. This has caused airlines that are already offering such service to get more involved, while those that are not, are now following suit. After all, the better an airline can cater to customer needs, the more competitive it will become.
China Southern Airlines (GUN) is among the first to target the premium economy (PY) market in the country - - SEE ATTACHED - - "GUN-2014-02-777-300ER PREMIUM ECONOMY." In 2010, it announced it was to retrofit 266 airplanes, offering some 7,000 premium economy (PY) seats. Its (PY) seats are set in front of the economy (Y) class cabin, separated by curtains in between. The seat pitch is raised from 79 cm to 90 - 94 cm.
March 2014: Starting from June 20, China Southern Airlines (GUN) will launch its long-await Guangzhou - Changsha - Frankfurt round-trip service, marking it the first non-stop international route linking the Hunan province with Europe and the longest international flight departing from Changsha, disclosed by the Hunan Branch of the company.
(GUN) plans to operate the Guangzhou - Changsha - Frankfurt service three times weekly, using Airbus A330-200 airplanes with a capacity of 216 seats. It is learnt that the outbound flight will be available on Mondays, Wednesdays and Fridays; while the inbound flights are on Tuesdays, Thursdays and Saturdays. Specifically, the Frankfurt-bound flight CZ331 is scheduled to take off from Guangzhou Baiyun International Airport at 9:30 pm and arrive in Frankfurt at 6:00 am the next day, with a stopover in Changsha from 10:45 pm to 11:55 pm; while the return flight CZ332 will depart from Frankfurt at 2:15 pm and land in Beijing at 9:15 am the next day, with a stopover in Changsha from 6:45 am to 8:00 am (all local time).
As the first non-stop flight between Changsha and Europe, the launch of (GUN)'s Guangzhou - Changsha - Frankfurt service will build an air bridge between Hunan province and the European countries, providing passengers with an efficient and direct choice. Meanwhile, Changsha can be connected to more European cities and regions by transiting via Frankfurt, which is the one of world's largest airports.
April 2014: China Southern Airlines (GUN) has reported a net profit of +CNY1.89 billion/+$307 million for 2013, down -28% compared to a net income of +CNY2.63 billion in 2012.
Operating revenue decreased -3.3% to CNY98.1 billion, while expenses rose +1.3% to CNY87.06 billion.
(GUN) attributed the results to the slowdown of domestic economic growth, high-speed rail competition, overcapacity, intensified competition and high fuel prices.
Passenger boardings jumped +6.1% to 91.79 million with an average load factor of 79.5% LF, down -0.6 point over the prior year. Passenger traffic climbed +9.3% to 13.14 billion (RPK)s against a +10.2% increase in capacity to 186.8 billion (ASK)s. Cargo traffic grew +3.6% to 1.3 million tonnes.
China Southern (GUN) subsidiary, Xiamen Airlines (XIA) posted a 2013 net income of +CNY1.3 billion, which it attributed to the robust growth of domestic market demand. (XIA) transported 18.6 million passengers, up +10.3% over 2012. Its average passenger load factor was 74.9% LF, down -2.1 points. Cargo traffic volume jumped +9.1% to 192,000 tonnes.
(GUN) warned of tough challenges ahead, such as unstable global economic growth, yuan depreciation, fiercer competition and high-speed rail expansion.
China Southern Airlines (GUN) begins summer 3x-weekly, Guangzhou - Frankfurt Airbus A330-200 service. (GUN) began its 17th route from Guilin (KWL) on April 9th. (GUN) added a 2x-weekly (Wednesdays and Saturdays), non-stop service on the 1,901 km sector to Muan (MWX) in South Korea, using its 163-seat 737-800s. No other carrier operates this airport pair.
May 2014: China Southern Airlines (GUN) the largest operator in both Asia and the People's Republic of China, has signed a purchase agreement for 80 A320 family airplanes, comprising 30 A320ceos and 50 A320neos. The current list value is $7.3 billion. According to Airbus (EDS), the airplanes are slated for delivery from 2016 to 2020.
(GUN) will be leasing 24 Airbus A320neo Family airplanes from AerCap Holdings (DEA). The airplanes are due for delivery between 2016 and 2019 and will be powered by Pratt & Whitney (PRW) (PW1100G-JM) engines. AeroTurbine (AUB), (DEA)'s after-market subsidiary, has also agreed to purchase four older airplanes back from (GUN). These will be disassembled and parted-out.
June 2014: China Southern Airlines (GUN) plans to launch a branch company in Shanghai to further explore China’s business capital market. (CEO), Tan Wangeng said (GUN) has distributed 38 airplanes on more than >30 domestic routes from Shanghai (including Guangzhou, Shenzhen, Shenyang, Changchun, Dalian, Urumqi, Zhengzhou, and Beijing). (GUN) has also distributed airplanes on several international routes from Shanghai, including Nagoya and Seoul.
The Shanghai branch is expected to operate 10 airplanes initially and is scheduled to take delivery in June of three Boeing 737-800s, which will be operated on routes from Shanghai to Wuhan, Kunming, Guiyang, Guangzhou, and Shenzhen. (GUN) noted it would continue to increase capacities in the Shanghai market.
Currently, China Eastern Airlines (CEA) and its subsidiary, Shanghai Airlines (SHA) dominate the Shanghai market. Air China (BEJ) established a branch in Shanghai in recent years and opened international routes from Shanghai to Paris, Frankfurt, and Munich. Hainan Airlines (HNA)’s cargo subsidiary, Yangtze River Express (YTH) is also applying to expand its business to passenger transport operation and is awaiting approval from the Civil Aviation Administration of China (CAAC) (CAC).
Shanghai Airport Group (Hongqiao and Pudong airports) has experienced rapid growth in terms of passenger throughput in recent years. Last year, Shanghai Airport Group handled 82.79 million passengers, becoming the second biggest domestic airport next to Beijing Capital. It is estimated the figure will reach 90 million in 2015; cargo traffic volume is expected to be 5 to 5.5 million in the same time frame.
July 2014: China Southern Airlines (GUN) has reported a first-half net loss of -CNY900 million to -CNY1.1 billion/-$146 million to -$178 million compared with a net loss of -CNY302 million in the year-ago period.
According to a preliminary earnings estimate statement released by the Shanghai Stock Exchange, yuan depreciation was a major contributor of the loss, which was also attributed to the slowdown of domestic economic growth.
China’s big four carriers were hit hard by exchange losses resulting from yuan depreciation in the first quarter as they either reported sharp profit declines or net losses. (GUN) posted a first-quarter net loss of -CNY306 million. To control operating costs, it has started to cut commissions from 3% to 2% for domestic ticket agents.
China Southern Airlines (GUN) on June 24th began a new 3x-weekly service from Guangzhou (CAN) to Frankfurt (FRA) via Changsha (CSX). The route is served by (GUN)’s A330-200s and faces no direct competition. Frankfurt becomes (GUN)’s sixth destination in Europe after Amsterdam, Istanbul, London, Moscow, and Paris.
(GUN) has added its second service into Korea, with a 3x-weekly route into Busan (PUS) from its Guangzhou (CAN) hub (the world’s 16th busiest airport). Adding to (GUN)’s existing double-daily operations into Seoul Incheon from Guangzhou, the new route will be flown by the SkyTeam (STM) Alliance carrier’s 151-seat A320s. Started on July 11th, the service will face direct competition from Asiana Airlines (AAR) which flies the city pair 4x-weekly.
(GUN) began its third connection to the Russian city of Vladivostok (VVO), adding to its existing operations from Dalian and Shenyang. Started on July 16th, it will offer 3x-weekly services from Yanji (YNJ). The route, just 181 km in length, will encounter no competition and will be flown by the SkyTeam (STM) Alliance carrier’s 151-seat A320s.
China Southern Airlines (GUN) is set to pass the 100 million passenger mark in 2014!
Established on July 1st 1988 following the restructuring of the Civil Aviation Administration of China (CAAC) (CAC), China Southern Airlines (GUN) has been growing impressively in recent years, being ranked as the biggest airline in the Asian region, according to passengers carried in 2013. (GUN) is based primarily at Guangzhou and Beijing airports, and serves over >190 destinations worldwide as of this summer. With a current fleet of 468 airplanes and more than >50 airplanes on order, the SkyTeam (STM) alliance member claims the distinction of being the first carrier in the world to be operating both the A380 and the 787-8.
As a result of its massive expansion last year, (GUN)'s achievements included being “the airline with the most new routes” (expanding by a net of 116 routes) and “the airline with the most new airports” (adding a total of 16 new airports).
Now as the largest Chinese carrier, (GUN) handled around 92 million passengers last year (a new record high), representing an increase of +6.2% over 2012 figures. Furthermore, in the first five months of 2014, for which data is already available, the carrier posted an increase of +9.3% when compared to the corresponding period of the previous year, with 40 million passengers achieved until the end of May. If (GUN) continues on this growth trajectory, it should pass the magical 100 million passenger figure in 2014 - - SEE ATTACHED - - "GUN-2014-07-TRAFFIC GROWTH."
Benefiting from a favorable economic climate, (GUN)’s traffic has grown each year, posting an impressive +225% growth between 2004 and 2013. Besides the passenger numbers, which have tripled over this timeframe, China Southern (GUN)’s average annual load factor has improved significantly from 67% LF in 2004, to 74% LF in 2008, and last year it reached 80% LF.
China Southern (GUN)’s traffic growth has been almost uninterrupted over the last four years, with the exception of January 2013. Historically, July and August have been both the strongest months of the year, as a consequence of the increased tourist demand during the summer period. Overall, (GUN)’s seasonality profile was relatively flat in 2013, with the peak month of August reporting +34% more passengers than January, the month it achieved the lowest traffic figure.
Examination of China Southern (GUN)’s current network, reveals that (GUN) operates over >1,200 non-stop routes to a total of 194 destinations, of which 126 are in China. In fact, (GUN)’s top 12 airports (SEE ATTACHED - - "GUN-2014-07-TOP 12 AIRPORTS") account for over half of total weekly seat capacity this summer. Unsurprisingly, Guangzhou, one of five major airports serving the Pearl River Delta region on China’s southern coast, is the biggest hub by weekly seat capacity (15%), posting +8.7% growth or a net increase of 26,960 weekly seats, when compared to data from the same period last year. By comparison, this is twice as big as its second major hub at Beijing, where (GUN) increased its capacity by a modest +1.6% over the last year.
China Southern (GUN)’s recent weekly seat capacity experienced +8.2% growth when compared to data from the same week last year, with 10 of the top 12 airports growing. Guiyang is not only a new entrant into this year’s graph, but also the fastest growing airport, as a result of (GUN) having increased its capacity to the gateway for Guizhou Province by +35%. On the other hand, Urumqi will witness the greatest decline, as China Southern (GUN) has trimmed a total of -13,335 weekly seats (-13%) from its schedule.
(GUN), Crédit Agricole Corporate & Investment Bank, and (KfW IPEX)-Bank have closed the second transaction for a new Airbus A320-200 under their new (ECA)-backed financing facility. (CA-CIB) and (KfW IPEX)-Bank are acting as lenders with (CA-CIB) taking the additional roles of Facility Agent & Security Trustee.
(GUN), Crédit Agricole Corporate & Investment Bank, and (KfW IPEX)-Bank have closed the first transaction (for a new Airbus A330-300 delivered June 24) under a new (ECA)-backed financing facility.
August 2014: Starting from August 12, passengers of China Southern Airlines (GUN) were being allowed to check in and board planes at Guangzhou Baiyun International Airport (CAN) by directly swiping their (ID) cards, helping them get rid of waiting for checking in and printing paper boarding passes.
According to (GUN), passengers who complete check-ins and seat selection on the internet or via Wechat, App and smart phones, can directly pass through the security and get certificates with information of names, flight numbers, seats and boarding gates. It is applicable only to passengers holding a second-generation (ID) card taking domestic routes at (CAN).
Passengers without check-in luggage are advised to arrive at the airport no later than 60 minutes prior to departure, in keeping with (GUN)'s commitment towards a safer and more punctual travel experience.
Besides Guangzhou, China Southern (GUN) also offer such service in Wuhan, which is expected to be extended to airports in Shanghai, Shenzhen, Chengdu, Xi'an, Kunming and other cities in the second half of this year. For international flights, using a passport as a boarding pass is still under consideration.
China Southern Airlines (GUN) launched its second route to Moscow Sheremetyevo (SVO) on July 30th with the introduction of 3x-weekly flights from Wuhan (WUH). The 6,449 km route will be flown by (GUN)’s A330-200s and faces no direct competition. The route launch was celebrated in Moscow by the heads of aviation authorities from both China and Russia. Wuhan, China’s 13th busiest airport with 15.7 million passengers in 2013, has only one other non-stop service to Europe, AirFrance (AFA) to Paris (CDG).
China Southern Airlines (GUN) has unveiled a major increase in the number of international routes it offers from Shenyang, the capital of Liaoning province. This month (GUN) plans to launch 10 new international routes from Shenyang's Taoxian International Airport, including flights to the Russian city of Vladivostok, the South Korean hubs of Cheongju, Kwangju, Daegu, Busan and Gangwon-Do, and the Japanese cities of Sapporo, Okinawa, Obihiro and Hakodate.
In addition, (GUN) will offer an extra 4x-weekly flights to Tokyo, taking the total frequency of the route to daily, while boosting its Shenyang - Seoul service from seven to 9x-week.
China Southern Airlines (GUN) and “I Love New York” launched a marketing partnership to promote New York State as a global tourism and business destination. The promotion officially kicked off August 6 with its inaugural 777-300ER direct flight from Guangzhou, China to New York (JFK) as part of its 4x-weekly service. The 12,905 km route is over >1,200 km longer than its previous longest route from Guangzhou to Los Angeles, (GUN)’s only other USA destination, which has been operating since 1997. (GUN) also links Guangzhou with Vancouver in Canada.
With this Boeing 777-300ER (B-2099 - - SEE PHOTO - - "GUN-777-300ER - 2014-08") taking off from Guangzhou Baiyun International Airport (CAN) at 2:37 am, (GUN) marked the longest nonstop flight in the history of China civil aviation industry. It is the first nonstop flight from Guangzhou to New York operated by a Chinese carrier, and the Guangzhou-based carrier's first international flight linked to the East Cost of the USA.
The nonstop service is operated 4x-weekly by Boeing 777-300ER airplanes. The outbound flight CZ399 is scheduled to depart Guangzhou at 1:40 am every Monday, Wednesday, Friday and Sunday, and arrive in New York at 5:15 am, with the return flight CZ300 departing New York at 11:15 am and landing in Guangzhou at 3:15 pm (all local time).
Each first (F) class seat on China Southern's 777-300ER is installed with a 23-inch high resolution screen, with 15.4-inch screen for business (C) class, 10-inch screen for premium economy (PY) class, and an 8.9-inch screen for economy (Y) class.
North America is no doubt one of the most important destinations in China Southern (GUN)'s international expansion. Since its Guangzhou - Los Angeles route was opened in July 1997, (GUN) has become a carrier carrying the largest number of passengers who travel from South China to North America.
The 4x-weekly flights to New York's (JFK) extend (GUN)'s North American reach to the East Coast beyond existing gateways of Los Angeles and Vancouver, which will attract travelers, not just from China, but from other countries, who fly to Guangzhou to catch China Southern's service (the so-called "transit customers.")
By now, all of China's three major aviation hubs (Beijing, Shanghai and Guangzhou) have nonstop flights to New York.
On August 5th, China Southern (GUN) also launched 2x-weekly (Tuesdays, Saturdays) flights on the 2,404 km route between Nanning (NNG) and Seoul Incheon (ICN) using its 737s.
China Southern Airlines (GUN) announced that it is set to rename its first (F) class on (GUN) domestic narrow-body airplanes to business (C) class.
China Southern Airlines (GUN), Crédit Agricole Corporate & Investment Bank (CA-CIB), and (KfW IPEX) Bank have closed the third transaction under their new (ECA)-backed financing facility. A new Airbus A321-200 (6233) has been delivered. (CA-CIB) and KfW (IPEX)-Bank are acting as lenders with (CA-CIB) taking on the additional roles of Facility Agent and Security Trustee.
September 2014: China Southern Airlines (GUN), the largest airline in the People's Republic of China, announced new Boeing 777F freighter service between Los Angeles International Airport and Tianjin, China.
The 13-hour direct service marks the only dedicated cargo route linking Tianjin and North America.
China Southern Cargo, a proud member of SkyTeam (STM) Cargo, also launches Los Angeles - Tianjin - Shanghai cargo service, starting September 5.
The new Los Angeles - Tianjin - Guangzhou service operates 2x-weekly (Monday, Thursday), departing from Los Angeles International Airport at midnight, direct to Tianjin, before continuing onward to Baiyun International Airport, Guangzhou, and then returning to Los Angeles.
(GUN) can now offer 135 tons of cargo capacity from Los Angeles to Tianjin per week. Approximately 200 tons of online shopping is being moved from America to Tianjin each month, and 85% of online shipping is being moved through Los Angeles to Tianjin.
With the addition of cargo service to Shanghai and "belly cargo" on China Southern (GUN)'s daily Airbus A380 commercial flights between Guangzhou and China, commercial clients now have abundant options to move freight to each of these important business markets, as the two new routes will be connected with (GUN)'s domestic network through (GUN)'s twin hubs in Guangzhou and Shanghai.
Additionally commercial cargo from Tianjin, North China, and Northeast China can be rapidly transported to cities throughout Europe, North America, Japan, and Australia, via China Southern Airlines (GUN)'s exclusive "Canton Routes" service via Guangzhou.
China Southern Airlines (GUN) Cargo can also be transported to more than >200 cities in Europe and North America by combined international truck and air networks. After arriving in Tianjin, cargo can be transported via ground, same day, to 24 cities in China, including Beijing, Shenyang, Qingdao, Zhengzhou, Xi'an, and Urumqi.
China Customs can accept America - China online cargo to Chongqing, Shenzhen, Guangzhou, Hong Kong, Tianjin, Shanghai, and Hangzhou.
Tianjin, as the newly named city for Customs clearance, is an important destination after Chongqing and Shenzhen, due to its advantages in Customs policy, logistic service and geographic location.
The Boeing 777F Freighter is 62.94 meters in length, with 64.80 meters wingspan and 18.76 meters in height. The main deck is 5.09 meters high, with the lower deck 3.11 meters.
The maximum cargo capacity is 105.9 tons, with 650 cubic meters in volume with maximum range of 9630 km, the most economical twin engine freighter with the longest range and largest capacity.
The Boeing 777F meets "QC2" noise standards, which allows it to operate in most noise sensitive airports.
China Southern (GUN) Cargo offers 15 freighter routes, including:
• Guangzhou - Chongqing - Amsterdam - Guangzhou
• Guangzhou - Amsterdam - Guangzhou
• Guangzhou - Frankfurt - Guangzhou
• Guangzhou - Vienna - Frankfurt - Guangzhou
• Guangzhou - Qingdao - Los Angeles - Zhengzhou - Guangzhou
• Shanghai - Amsterdam - Chongqing - Shanghai
• Shanghai - Amsterdam - Shanghai
• Shanghai - Amsterdam - Vienna - Shanghai
• Shanghai - Frankfurt - Shanghai
• Shanghai - Los Angeles - Shanghai
• Shanghai - Los Angeles - Vancouver - Shanghai
• Shanghai - Chicago - Shanghai
• Shanghai - Zhengzhou - Chicago - Shanghai
• Los Angeles - Tianjin - Guangzhou, and
• Los Angeles - Tianjin - Shanghai
China Southern (GUN) Cargo offers "belly cargo" on more than >500 passenger plans, covering China and Asia, with links to the major cities of Europe, America, Australia, and Africa.
In addition, China Southern (GUN) Cargo has ground trucking networks in Europe, North America, Middle East, Australia, and Japan, as well as major cities throughout China including Guangzhou, Shanghai, Shenzhen, Beijing, Chongqing, and Zhengzhou.
In Europe, China Southern Airlines (GUN) Cargo is transported to more than >100 cities in Western and Eastern Europe through trucking service from Amsterdam, Frankfurt, Vienna, Paris, and London; in North America, cargo can be carried to more than >90 cities, including Boston, Houston, Seattle, and Portland, as well as Edmonton, Toronto, Montreal, and Calgary, Canada.
China Southern Airlines (GUN) Cargo also utilizes 10 trucking networks in Middle East, seven in Oceania, and five in Japan.
737-86N (41252, B-1979), (GECAS) (GEF) leased, 2 777-31BERs (43221, B-2007; 43222, B-2008), and 2 A321-231s (6233, B-1847; 6241, B-1848), deliveries.
September 2014: China Southern Airlines (GUN) reported a first-half net loss of -CNY1 billion/-$162 million, reversed from a net profit of +CNY302 million in the year-ago period. (GUN) had predicted the net loss in its preliminary earnings statement released in July.
It attributed the losses to the slow recovery of domestic market demand (especially in the Southeast Asian market and Xinjiang market), overcapacity, high-speed rail competition, and yuan depreciation.
First-half operating revenue climbed +42% to CNY50 billion, while operating expenses jumped +39% to CNY45 billion.
Passenger boardings rose +8% to 47.4 million in the first half, with an average load factor of 79.2% LF, down -1.12 points over the year-ago period. Capacity increased +10% to 98 billion (ASK)s against a +10% increase in passenger revenue to 78 billion (RPK)s. Cargo traffic volumes rose +12% to 663,120 tonnes.
China Eastern (CEA) and Air China (BEJ) reported first-half profit declines for the similar reasons.
Looking to the second half, (GUN) said, “Opportunities and challenges would remain,” but the “robust growth of Chinese economy” and “improvement of Chinese people’s life standards” would provide vast market potential for domestic carriers.
(GUN) reported that its August passenger traffic increased +8.14% year on year, due to high travel demand in the peak summer season.
(GUN) served 9.88 million passengers in the past month, up +8.14% over the same period last year. Domestic passengers rose +6.81% and international passengers jumped +22.82%. The passenger load factor declined -2.09% points to 81.26% LF.
(GUN) registered a year-on-year growth of +14.28% in cargo traffic, with 122,580 tonnes of cargo and mail.
China Southern Airlines (GUN) has introduced a new international destination from its Shenzhen (SZX) base. On August 27th, (GUN) began twice-weekly (Wednesdays and Saturdays) flights on the 2,070 km route to Seoul Incheon (ICN) using an A320. Competition is provided by Asiana Airlines (AAR) (daily flights) and Korean Air (KAL) (daily flights) and Shenzhen Airlines (SHZ) (8x-weekly flights). (GUN) now offers 131 non-stop flights per week to Seoul Incheon from 16 airports across China.
(GUN) will start 3x-weekly service from Wuhan to San Francisco, flying out of its base in Guangzhou, as it aims to explore international potential posed by China’s tier-two cities. The service is scheduled to start mid-December, using a Boeing 787-8 under flight numbers CZ659 AND CZ660.
The service adds to (GUN)’s existing North American services to New York, Los Angeles, and Vancouver, and extends the tally of airlines seeking to tap into the potential markets in China’s central and western cities (many of them with multi-million and relatively affluent populations).
The new service will establish a link between the inland manufacturing and port city to the key USA import zones around San Francisco, and underlines (GUN)’s intent to make more business in the expanding transpacific sector. It also recently launched a service from Changsha, Hunan Province to Frankfurt, as well as a direct flight from Shenzhen to Mauritius.
Although China Southern (GUN) is the first Chinese carrier to fly from an inland tier-two city to the USA, many others have seen the potential of non-Shanghai/Beijing based schedules. Recent international additions include China Eastern Airlines (CEA)’s 2x-weekly Boeing 767 service to Moscow from Xi’an, in Shaanxi Province, Air China (BEJ)’s routing from Chengdu to Frankfurt and (CEA)’s increased schedule from Kunming to Dubai.
Low-cost carriers (LCCs) are also eyeing the prospects of the inland China market. Long-haul (LCC) AirAsia X (ASX) says it is currently researching potential tier two destinations. “We currently have five staff looking at possible local [Chinese] markets, and have up to 10 new locations we might use,” (ASX) (CEO), Azran Osman-Rani said.
The introduction of these new tier-two city services marks a significant step in the development of the China aviation sector. Although Wuhan, Kunming, and Xi’an are not on China’s coastal boom strip, many have significant population and industrial attractions, as well as strong backing from local governments who have both the cash and land to build attractive modern airports for potential operators.
China Southern Airlines (GUN), the country's largest airline by fleet size, is to launch flights from Lanzhou to Dubai via Urumqi on September 29. The new route will use Boeing 737-800 airplanes to make four flights each week in both directions on Mondays, Wednesdays, Fridays and Sundays. It will be the first international flight by (GUN) from Lanzhou, the capital of Northwest China's Gansu Province.
Currently, passengers traveling between northwestern China and the Gulf need to make a detour through eastern Chinese cities such as Beijing and Shanghai. The new Lanzhou - Urumqi - Dubai flights will cut the journey time by half. (GUN) said the journey time between Urumqi, capital of northwest China's Xinjiang Uygur Autonomous Region, and Dubai will be about five hours, the shortest air route from China to the United Arab Emirates (UAE).
Demand for air services between China and the (UAE) cities is rising fast thanks to growing trade and cultural links between China and Gulf countries. Direct flights are already in service between Dubai and Beijing, Guangzhou, Kunming, and Shanghai.
China Southern Airlines (GUN) plans Lanzhou - Urumqi - Tbilisi flights on September 30. The service will be operated 3x-weekly on Tuesdays, Thursdays and Saturdays, using Boeing 737-800 airplanes. The outbound flight CZ6039 is scheduled to depart Lanzhou Zhongchuan Airport (LHW) at 3:15 pm, land at Urumqi Diwopu International Airport (URC) for refueling and take off again at 7:30 pm, and arrive in Tbilisi at 9:10 pm; while the return flight CZ6040 will take off from Tbilisi International Airport (TBS) at 10:40 pm and arrive in Lanzhou after a short stopover in Urumqi (all local time).
The new service will further promote economic and trade exchanges and cooperation between China and Georgia by establishing an air bridge connecting Lanzhou, Urumqi and Tbilisi (three cities along the Silk Road).
China Southern Airlines Henan Company, Ltd, a joint venture (JV) between China Southern Airlines (GUN) and the Henan Civil Development and Investment Company, Ltd, was officially launched at Zhengzhou Xinzheng International Airport (CGO). The subsidiary will start scheduled services independently from now on.
The new airline was established based on the assets of China Southern (GUN)'s Henan Branch that dominates the Henan market with more than a >50% market share.
China Southern Henan owns a fleet of 25 Boeing 737s and operates 96 domestic and international services to 32 destinations with more than >600 flights per week.
The Civil Aviation Administration of China (CAAC) gave the green light for the launch of China Southern Henan in July 2013. The airline has a registered capital of 6 billion yuan, with 3.6 billion yuan from China Southern (GUN) for a 60% stake and 2.4 billion yuan from the Henan Civil Aviation Development and Investment Company for the remaining 40% stake.
China Southern Henan will commence operations using China Southern (GUN)'s visual identity system, with a goal to create a strong local airline in Henan by taking advantage of China Southern (GUN)'s domestic and international route network.
China Southern’s Henan Airlines subsidiary has begun formal operations. The new venture operates a fleet of 25 airplanes on 51 domestic and international routes, including Seoul and Bangkok. In addition, the carrier opened a cargo route to Chicago to take advantage of the robust growth of Zhengzhou cargo market.
Chairman Si Xianmin said China Southern (GUN) would make Zhengzhou its core air transport market in central China by increasing capacity and opening more routes.
Another Zhengzhou-based carrier named Henan Airlines suspended operations after a fatal crash in August 2010. Its controlling stakeholder, Air China (BEJ)’s subsidiary, Shenzhen Airlines (SHZ), has reduced its ownership to 30% from 51%; Henan Civil Aviation Development & Investment Company is now the controlling stakeholder with a 70% share. Henan Airlines began bankruptcy reorganization in November 2011 and owed debts of CNY423.4 million as of December 31, 2012. It remains unknown when it will resume operations.
October 2014: China Southern Airlines (GUN) has approved the takeover of Hebei Airlines (NTE) by its subsidiary, Xiamen Airlines (XIA). (XIA) will purchase 99.2% stakes in the loss-making carrier for CNY749 million/$122 million, according to a statement released through the Hong Kong Stock Exchange.
Hebei Airlines (NTE) parent, the Hebei Aviation Group, which is controlled by the Hebei Jizhong Energy Group, holds a 62% stake. Sichuan Airlines (sic) and the Shenyang Zhongrui Company hold a 35% and 3% stake, respectively.
China Southern (GUN) also approved the (XIA)’s purchase of the remaining 0.77% stake held by the Shenyang Zhongrui Company.
In 2010, Hebei Airlines (NTE) had planned to attain an operating revenue of more than >CNY10 billion and expand its fleet to more than >20 airplanes by 2015. However, (NTE) has posted consecutive losses since it was launched three years ago. It reported a net loss of -CNY200 million and nearly -CNY500 million in 2011 and 2012, respectively. It posted a net loss of more than >-CNY300 million in 2013.
In order to save Hebei Airlines (NTE), (GUN) also approved a CNY1 billion short-term loan by (XIA) to Hebei. It also approved a capital injection of CNY800 million to the Shijiazhuang-based carrier over the next three years.
(XIA) has maintained a consecutive profit for 27 years. It operates 106 Boeing airplanes on 244 domestic and international routes.
November 2014: News Item A-1: China Southern Airlines (GUN) and Asiana Airlines (AAR) continued to expand their code sharing partnership on some major routes between China and South Korea, according to an agreement jointly signed by the two sides earlier.
Effective from October 26, the two carriers started code sharing on Shenyang - Busan, Changchun - Seoul, and Harbin - Seoul routes, among which Asiana Airlines (AAR) operates flights OZ345/346, OZ303/304 and OZ339/340, while China Southern (GUN) operates flights CZ665/666, CZ687/688 and CZ683/684.
News Item A-2: China Southern Airlines (GUN) has unveiled a fresh-new bilingual in-flight safety video, a Chinese painting-themed safety demonstration. It is the first in-flight safety video mixing with the elements of traditional Chinese painting among Chinese airlines. See video - - http://www.wcarn.com/news/39/39355.html
(GUN) said the latest version is themed to continue its emphasis on safety in an engaging way, and it hopes to provide passengers with innovative visual experience by launching the new bilingual safety video.
Integrated with the bilingual instructions of flight attendants (CA), the timelapse video shows an elegant, classic and quaint visual picture of traditional Chinese Culture in the background of the freely flying animations of traditional paintings.
News Item A-3: China Southern Airlines (GUN) is set to retire its entire Boeing 777-200ER fleet by the end of this year. Next month, the 4 777-200ERs (B-2055, B-2056, B-2057 & B-2058), will be phased out in two batches, marking the end of 19 years' service for (GUN).
In 1992, (GUN) signed a deal with Boeing (TBC) for purchasing 6 Boeing 777 airplanes including 2 777-200Bs. On December 30, 1995, (GUN) took delivery of the first 777-200ER (B-2055).
In the past decades, (GUN)'s 4 777-200ERs have kept excellent flight safety records and flown international routes to Amsterdam, Los Angeles, Brisbane, Sydney, Melbourne, Dubai, and Paris.
December 2014: News Item A-1: Uncertainty has gripped the mainland's booming aviation industry in the wake of a corruption probe involving executives at China Southern Airlines (GUN), the country's largest carrier, with questions raised over whether it is the start of a wider crackdown or an isolated case. China Southern (GUN)'s Executive VP, Chen Gang, and Chief Operating Officer (COO), Tian Xiaodong were under investigation for suspected "job-related crimes" and had been dismissed from their posts, (GUN) said in a stock exchange notice posted after the market closed.
A source at (GUN) (China's largest by fleet size and passenger volume) told the "South China Morning Post" that an internal circular said the two men duo had already been detained on corruption-related charges, although the amount involved was not disclosed. "These are our highest-ranking executives in years to fall," the source said.
China Southern (GUN) was the only airline among a total of 13 state-owned enterprises and organisations to have just undergone a month-long on-site inspection during December, since the end of November, by the Central Commission for Discipline Inspection in their third and most intense round of inspection in 2014.
Beijing-based "China Times" said that at least +3 more China Southern (GUN) executives, including Hu Zhiqun, Deputy Director Party Affairs and the head of its subsidiary, CS Air Holding Construction & Development, Hu Zhiqun were also involved.
Company reports show Chen, 49, had been a VP of the airline since August 2009 and the had been head of the Sales & Marketing, a lucrative department that had been at the center of (GUN)'s previous corruption scandal. In late 2013, up to 10 people from the department, including two deputies, were investigated by the police for fraudulently using abusing the ticketing system to accumulate differences, amounting to several sums worth millions of yuan.
Tian, 45, was promoted to (COO) in charge of Flight Operations in June 2012, according to the company's 2013 annual report. "Flight Operations are usually technical and not easily associated with corruption, so we were quite puzzled," the source said.
A Hong Kong-based equity analyst said the wider impact of the case remained to be seen, depending on whether any more senior executives at the airline were caught up. While the executives concerned were senior, "it is not like an investigation into its Chairman or anything like that," the analyst said. That explained why (GUN)'s shares were not affected by the news, he added.
(GUN) said that it had "zero tolerance for any behavior against rules and regulations, no matter who is concerned."
January 2015: During the past 12 months, China Southern Airlines (GUN) handled 100.76 million passengers, up +9.78%, making it the first Chinese airline to transport more than >100 million passengers in a single year.
(GUN) accomplished a total turnover of 19.75 billion tonnes kilometers in 2014, up +13.06% year on year. (GUN) also reported a +12.22% increase in cargo volume to 1.43 million tonnes, with 13.5 million safe hours.
China Southern (GUN) ended the year with a total of 612 aircraft including Airbus A380s, A330s, 777-300ERs, and 787 Dreamliners, ranking the fifth in the world by terms of fleet size. (GUN) operates 2,000 flights daily heading to over >190 destinations among 40 countries and regions worldwide.
Notably, (GUN) registered +14% growth in international passenger volume, owing to the outbound boom and (GUN)'s global expansion. During the year, in order to meet increasing outbound travel needs, (GUN) launched Guangzhou - New York, Guangzhou - Changsha - Frankfurt, Guangzhou - Wuhan - Moscow, Guangzhou - Wuhan - San Francisco, and adjusted flight schedules and frequencies on international routes to Southeast Asia, Australia and New Zealand. At present, China Southern (GUN) operates more than >800 cargo and passenger services during winter/spring flight season, connecting to 1,052 destinations among 177 countries and regions via the extensive shared network of the SkyTeam (STM) Alliance.
2 737-81Bs (41326, B-1736; 41606, B-1737), ex-(N-1786B & N-1787B), 777-F1B (41637, B-2010), A321-231 (6440, B-1616), ex-(D-AVZA), and A330-323E (1593, B-5965), ex-(F-WWYG), deliveries.
February 2015: News Item A-1: China Southern Airlines (GUN) has introduced another cross-Straits service to its network. On February 15th, (GUN) began a weekly (Sunday) service on the 501 km route between Shantou (SWA) and Taipei Taoyuan (TPE). Frequency on the route is scheduled to increase to 3x-weekly by the end of March. There is no competition on the route which will be operated by (GUN)’s 737-800s.
China Southern (GUN) now serves 26 destinations non-stop from Shantou, while Taipei is now served from 15 airports across China.
News Item A-2: China Southern Airlines (GUN) will operate a daily A380 service between Beijing and Amsterdam from June. The A380 will be deployed on the long-haul service starting June 20, replacing an A330-300.
Flight CZ345 is scheduled to take off from Beijing at 0:50 am and arrive in Amsterdam at 5:40 am, with the return flight CZ346 departing Amsterdam at 2:50 pm and arriving in Beijing at 6:20 am the next day, according to the website of the airline.
As the only Chinese airline to order and operate the A380, (GUN) currently has five A380s in its fleet.
The first A380 for China Southern (GUN) entered revenue service in October 2011 with round-trip flights linking Beijing and Guangzhou. After this introductory domestic service, (GUN) began using the A380 on international routes starting with flights between Guangzhou and Los Angeles in October 2012. It also operates a seasonal A380 service from Guangzhou to Sydney every southern hemisphere summer during the peak travel period.
March 2015: China Southern Airlines (GUN) on March 19th began operating four times weekly on the 1,996 km route between its main base at Guangzhou (CAN) and Linzhi (LZY) in Tibet. (GUN)’s A319s will operate the service. Linzhi Airport is almost 3,000 m above sea level and opened in 2006. According to Official Airline Guide (OAG) data, Linzhi’s only other scheduled services are to Chengdu (operated by Air China (BEJ), Sichuan Airlines (SIC), and Tibet Airlines (TBZ)), while Tibet Airlines (TBZ) also serves Chongqing and Lhasa with scheduled flights.
737-81B (41328, B-1748), (ALE) leased, and A321-231 (6504, B-1626), ex-(D-AVZW), deliveries.
April 2015: News Item A-1: China Southern Airlines (GUN) has reported a net profit of +CNY1.8 billion in 2014, down -6.4% over a net income of +CNY1.89 billion in 2013.
Operating revenue jumped +10.4% to CNY108.31 billion against a +9.3% increase in operating expenses to CNY95.15 billion. (GUN) attributed the profit drop to fierce market competition, the high-speed rail and exchange losses due to yuan depreciation.
Passenger boardings climbed +9.9% to 100.9 million, with an average load factor of 79.4% LF, down -0.05 points year-over-year. Passenger revenue grew +12.3% to 166.63 billion (RPK)s against a +12.3% increase in passenger capacity to 209.807 billion (ASK)s. Cargo traffic volume increased +12.3% to 1.43 million tonnes.
(GUN) took delivery of 64 new airplanes and phased out 24 old airplanes last year. As of December 31, 2014, (GUN) operated 612 airplanes with an average fleet age of 5.92 years. This year, China Southern (GUN) is scheduled to introduce 57 new airplanes and retire 13 old airplanes, which would expand its fleet to 656 airplanes at the end of this year.
Looking ahead, (GUN) expects “stable growth of domestic market demand” will continue, but warns market competition will intensify and low airfares will remain unchanged.
China’s big three carriers have all reported a turnaround in the first quarter due to market demand growth and lower fuel prices.
According to financial pre-announcements, Air China (BEJ)’s first-quarter net income increased +CNY1.6 billion/+$262 million to +CNY1.8 billion, up from a net profit of +CNY93 million in the year-ago quarter. China Southern Airlines (GUN) reported a first-quarter net income of +CNY1.8 billion to +CNY2 billion, reversed from a net loss of -CNY306 million year-over-year. China Eastern Airlines (CEA) posted a net income of +CNY1.5 billion to 1.6 billion, reversed from a net deficit of -CNY205 million in the same quarter of 2014.
Air China (BEJ)’s passenger boardings grew +7.6% to 21.71 million with an average load factor of 80.2% LF, down -1.5 points over the year-ago period. Passenger revenue rose +8.1% to 40.6 billion (RPK)s against a +10% increase in passenger capacity to 50.6 billion (ASK)s.
China Southern (GUN)’s passenger traffic climbed +12% to 26.8 million with an average load factor of 81.37% LF, up +1.16 points over the same quarter last year. Passenger revenue grew +15.5% to 46.4 billion (RPK)s, while capacity rose +13.8% to 57 billion (ASK)s.
China Eastern (CEA)’s passenger boardings grew +9.43% to 22 million with an average load factor of 80% LF, down -3 points year-over-year. Revenue jumped +10.6% to 34.43 billion (RPK)s against a +11% capacity increase to 42.95 billion (ASK)s.
Looking ahead, industry analysts predict China’s big three will see a better 2015 owing to robust growth of market demand, capacity slowdown, lower fuel prices and stable exchange rates.
News Item A-2: China Southern Airlines (GUN), China's largest carrier, reported a +721.9% jump in net profit for the first quarter of 2015 helped by higher revenue and lower fuel costs.
Operating revenue rose +6.81% to 27.72 billion yuan for the January - to - March period, with net profit soaring +721.9% to 1.90 billion yuan.
The rapid growth came from strong demands and the plummeting oil prices, (GUN) said.
News Item A-3: Perth Airport has welcomed the arrival of its fourth Boeing 787 operator with a traditional water cannon salute. China Southern (GUN) Flight CZ319 touched down in the West Australian capital at 5:58 am local time on April 1st after a seven hour and 21 minute trip from (GUN)'s Guangzhou hub.
It was the Chinese flag carrier's first 787 service to an Australian destination. China Southern (GUN) has 10 787-8s in its fleet.
The 787-8 (B-2732), was on the ground for about two hours and 45 minutes before operating the reciprocal Flight CZ320 to Guangzhou.
(GUN) confirmed it would increase its frequency to Perth to four flights a week from July 16, 2015, from three weekly flights currently. (GUN) is the only carrier offering direct flights from Perth to mainland China. "The upgrade to the 787 Dreamliner will provide even further capacity for business and leisure travellers to fly direct from Perth to Guangzhou and connect to over >160 domestic destinations within China and beyond," China Southern regional Managing Director for Australia and New Zealand, Louis Lu said.
Perth Airport has already welcomed Air New Zealand (ANZ), Thai Airways (TII) and Scoot (SCT), as airlines with service to the West Australian capital using the new generation airplanes.
News Item A-4: China Southern Airlines (CZ)'s Dalian Branch is planning to add four additional flights to Tokyo for the upcoming Labor Day Holiday.
The extra flights will be operated on April 25, April 30, May 5 and May 9, in a bid to meet the increasing demands during the holiday.
Flight CZ629 is scheduled to depart from Dalian at 8:00 am and arrive in Tokyo at 12:45 pm, with the inbound flight CZ630 taking off from Tokyo at 1:45 pm and landing in Dalian at 2:40 pm (all local time).
Meanwhile, China Southern (GUN) Dalian will continue to expand capacity in South Korea and Japan market from May by deploying larger Airbus A321 airplanes on its Dalian - Seoul and Dalian - Tokyo routes. After the adjustment, (GUN) can provide +672 more seats on the two routes each week, bringing the total to 8,558.
News Item A-5: See attached "GUN-2015-04 - TOP 25 WORLD TRAFFIC.jpg."
May 2015: China Southern Airlines (GUN) will operate its daily flight between Beijing - Amsterdam with an Airbus A380 beginning June 20. Until the end of October, the A380 replaces the Airbus A330-200, doubling the current daily amount of seats to 506. This is the first time (GUN) operates an A380 on a European route.
2 737-81Bs (41609, B-1776; 41610, B-1780), AerCap (DEA) leased, 737-86N (43404, B-1781), (GEF) leased, and A320-232 (6342, B-1651), ex-(B-504L) deliveries.
June 2015: News Item A-1: China Southern Airlines (GUN) has enhanced its service to the USA by commencing non-stop flights from Guangzhou (CAN) to San Francisco (SFO) on June 22. The 11,075 km service will be operated 4x-times weekly by the SkyTeam (STM) Alliance carrier’s 787s. Previously, passengers had to make a stop in Wuhan. This thrice-weekly service will continue to operate. China Southern (GUN) also serves Los Angeles (11x-weekly) and New York (JFK) (10x-weekly). There are now a total of 42 weekly non-stop flights between San Francisco and China. Air China (BEJ) and United Airlines (UAL) both serve Beijing daily, China Eastern Airlines (CEA) and (UAL) both serve Shanghai daily, while (UAL) also serves Chengdu daily.
News Item A-2: China Southern Airlines (GUN) has reactivated one of two 747-41BFs it retired from active commercial service in 2013. China's "WCARN" news portal reports 747-41BF (32803, B-2473) has been flown to Guangzhou in anticipation of a return to service in July.
Sistership 747-41BF (32804, B-2461) is slated to return to service in August.
China Southern (GUN)'s cargo fleet currently consists of nine 777-F1Bs.
News Item A-3: Beijing may merge the cargo subsidiaries of China’s big three carriers (Air China (BEJ), China Southern Airlines (GUN) and China Eastern Airlines (CEA) in an effort to improve the competitiveness of domestic cargo companies.
China Southern (GUN) currently operates 505 airplanes to 43 countries, to 204 destinations, on 921 routes and 2,024 daily flights.
July 2015: News Item A-1: China Southern Airlines (GUN) is expected to make a big turnaround in the first half, according to a statement released by Shanghai Stock Exchange.
(GUN) predicted it would report a net income between +CNY3.4 billion and +CNY3.6 billion/+$554 million and +$587 million, reversed from a net loss of -CNY1.018 billion in the year-ago period.
(GUN) cited a robust growth of domestic market demand and lower fuel prices as main reasons for the much-improved performance.
Other Chinese carriers are also expected to report huge profits in the first half. According to the Civil Aviation Administration of China (CAAC), China’s airline industry will report a much higher cumulative net income for the first six months of this year than the net profits reported in the whole year of 2014.
Passengers carried by Chinese airlines climbed +12.5% to 210 million, while cargo traffic volume jumped +6.6% to 2.991 million tonnes in the first half, the (CAAC) noted.
News Item A-2: China Southern Airlines (GUN) posted its performance statistics for June, showing +19.1% and +16.3% annual growth in (RPK)s and (ASK)s, respectively, with passenger load factor climbing +1.9% points to 79.8% LF.
(GUN) carried more than >8.6 million passengers last month, up +12.4% over the same period a year earlier, according to operating statistics. Passenger numbers for the first half of this year ending June 30 totaled 53.5 million, up +12.9% year on year.
Specifically, domestic passenger traffic registered a +10.1% year-on-year growth to 7.5 million in June, while that on international and regional routes rose +39% and +6.9%, respectively.
The cargo and mail turnover saw a year-on-year increase of +9% to 118,310 tonnes in June, among which 79,820 tonnes were transported on domestic routes, 37,050 tonnes on international routes and 1,440 on regional routes.
The passenger load factor rose by +1.9% points year on year to 79.8% LF in June, and the freighter load factor was up nearly 1% point to 70.69% LF.
In the first half of 2015, (GUN) transported a total of 53.5 million passengers and 712,640 million tonnes of cargo and mail, increasing +12.5% and +7.4% over the previous year.
News Item A-3: China Southern Airlines (GUN) has agreed to purchase 4% equity interests in Xiamen Airlines (XIA) from Xiamen (C&D) Inc at a consideration of 586 million yuan on July 14, 2015.
The board approved the Jizhong Engergy Group to transfer its all 15% stake in Xiamen Airlines (XIA). The state-owned coal enterprise sold its stake to Xiamen C&D at a total price of 2.2 billion yuan; then transferred the 15% stake in (XIA) to China Southern (GUN) (4%) and Fujian Investment (11%).
Upon completion of the acquisition, (GUN) increased its stake in Xiamen airlines (XIA) from current its 51% to 55%. The shareholding in (XIA) will be 55% held by China Southern (GUN), 34% by Xiamen C&D, and 11% by the Fujian (I&D) Group.
In the first quarter of 2015, Xiamen Airlines (XIA) achieved a net profit of +308 million yuan.
News Item A-4: China Southern Airlines (GUN) launched its latest route on July 16, a service that connects Lanzhou (LHW) with St Petersburg (LED), via an intermediate stop in Urumqi (URC). Flights on the 5,737 km sector connecting the three cities will operate 4x-weekly using the SkyTeam (STM) Alliance member’s 757-200s, with neither services from Lanzhou and Urumqi facing direct competition on the route to Russia’s second city.
News Item A-5: China Southern Airlines (GUN), China's largest carrier, is now waiting governmental approval to launch two new international services from Changsha to Hiroshima and Fukuoka, Japan, via Dalian in August.
Pending government approval, (GUN) will operate the Changsha - Dalian - Hiroshima service 3x-weekly, and offer the Changsha - Dalian - Fukuoka route with 4x-weekly, using Airbus A319/A320/A321 aircraft.
(GUN) will compete with Air China (BEJ) on the legs from Dalian to Fukuoka and Hiroshima.
News Item A-6: China Southern Airlines (GUN) celebrated the inaugural Lanzhou - Urumqi - St Petersburg flight at Lanzhou Zhongchuan International Airport (LHW), marking the official launch of the first transcontinental service at Lanzhou airport.
The 4x-weekly flight is operated on Mondays, Tuesdays, Thursdays and Saturdays, using a 380-seat 757. The St Petersburg bound flight CZ6035 is scheduled to take off from Lanzhou at 2:00 pm and land in Urumqi at 4:45 pm, with the second leg leaving Urumqi at 6:00 pm and reaching St Petersburg at 7:00 pm. The return flight CZ6036 is scheduled to depart from St Petersburg at 8:20 pm and arrive in Urumqi at 7:10 am the next day, with the second leg leaving Urumqi at 8:25 am and reaching Lanzhou at 10:55 am (all local times).
The 5-hour trip from Urumqi to St Petersburg is the shortest route from China to this Russian tourism resort.
News Item A-7: China Southern Airlines (GUN) has expanded its international network from Shenzhen (SZX) with the addition of two new routes to Japan. On July 23, (GUN) began 4x-weekly flights on the 2,549 km route to Osaka Kansai (KIX) using its A320s. The route is already served by Shenzhen Airlines (SHZ) with 2x-weekly flights. On July 25, another new Japanese route was started to Ibaraki (IBR) near Tokyo with 2x-weekly A320 flights. The 2,969 km route is not served by any other carrier. China Southern (GUN) now serves 60 destinations from Shenzhen of which 51 are to domestic destinations. (GUN)’s nine international routes from Shenzhen now comprise its two new Japanese routes, three destinations in Thailand, and one each in Indonesia, Mauritius, Taiwan, and Vietnam.
News Item A-8: "Chengdu Airport Welcomes 1st A380 Service" by Lena Ge, WCARN.com, July 2, 2015.
The world's largest airliner, the Airbus A380 touched down in Chengdu on July 1st, 2015, marking that China Southern Airlines (GUN) officially launched daily A380 services between Beijing and Chengdu.
It is the first time the Superjumbo operated a passenger flight to Chengdu and its second appearance after transporting quake relief materials by Airbus (EDS) in 2008.
The inaugural flight CZ6183 arrived at Chengdu Shuangliu International Airport (CTU) at 2:16 pm with the return flight landing in Beijing at 7:59 pm, July 1st. Passenger load factor of the inaugural flight reached 85% LF, with 90% LF on the return flight CZ6184.
As the only Chinese airline operating the A380 Superjumbo, (GUN) the Guangzhou-based carrier currently has five A380s in its fleet, which mainly serve routes from Guangzhou to Beijing, Sydney, and Los Angeles, and from Beijing to Shenzhen.
Specifically, (GUN) started flying its A380 Superjumbo from Beijing to Amsterdam from June 20, marking the first European gateway that (GUN) serves with an A380.
News Item A-9: "China Southern (GUN) Ramps Up Australian Routes"
By Mark Elliott, Travel Daily Media, July 20, 2015.
China Southern Airlines (GUN) will enhance its Australian operations in the coming months, with the addition of more flights to Perth and Melbourne.
(GUN) added an extra weekly flight on its Guangzhou - Perth route. This means China Southern (GUN) now operates four weekly flights to the Western Australian city, every Tuesday, Wednesday, Friday and Saturday.
All flights are operated using (GUN)'s new three-class Boeing 787-8 Dreamliner, which offers 4F seats in first class, 24C seats in business class, and 200Y in economy.
And (GUN) is also planning to increase the frequency of its Guangzhou - Melbourne route. Between September 13 and December 5, 2015, (GUN) will gradually add four more weekly flights to the route, taking the total frequency to daily.
The additional flights will run every Monday, Tuesday, Thursday and Sunday using a 275-seat Airbus A330-300 aircraft.
News Item A-10: INCDT: A China Southern Airlines (GUN) 737-81B (CFM56-7B26) (1806-34248, /05 B-5122) en route from Guangzhou to Bangkok was forced to make an emergency landing at Sanya Phoenix International Airport (SYX) due to a fire alert, resulting in injuries to 16 passengers during the evacuation.
According to VeryZhun, China's leading flight status service provider, the 737-81B, performing flight CZ3081 departed from Guangzhou Baiyun International Airport (CAN) at 12:56 pm and had to divert to (SYX) at 2:10 pm on July 3, as a safety precaution after a fire alarm triggered in the airplane.
The airplane was towed back to the specific gate and the runway reopened at 2:58 pm. Two arrival flights 3U8431 and JD5180 were diverted to neighboring Haikou airport, according to a source familiar with the matter.
Fire-fighting and search-and-rescue teams were sent to the plane. Sanya airport confirmed the emergency landing, adding that emergency exits were opened to evacuate passengers.
The airline confirmed an emergency landing in Sanya after a fire indication for one of the engines. All 132 passengers and seven crew were evacuated safely from the airplane, but two passengers received serious (ankle fractures), and 14 others sustained minor injuries during the evacuation.
Sanya airport reported that an initial inspection of the engine revealed no evidence of an engine fire.
The injured passengers were taken to hotels and others were provided with accommodation.
A replacement 737-800 (B-1701) was dispatched to Sanya, which took off from Guangzhou at 4:29 pm and arrived at (SYX) at 5:40 pm.
News Item A-11: China Southern Airlines (GUN) issued a performance forecast on July 8th in which it estimated to report a net profit of +3.4 billion yuan to 3.6 billion yuan for the first half of 2015, compared with a loss of -1.02 billion yuan in the same period of last year.
The rapid growth came from strong demands and the plummeting oil prices, (GUN) said in a statement to the Shanghai stock exchange.
For the full year of 2014, it had reported a profit of +1.77 billion yuan.
News Item A-12: On July 15, another Boeing 747-41BF (32804, B-2461) jumbo freighter of China Southern Airlines (GUN) flew back to Guangzhou after two years' break in Shanghai.
It's learnt that (GUN) stored two 747-41BFs at Shanghai Pudong International Airport (PVG) on September 3, 2013. The first 747-41BF (32803, B-2473) jumbo freighter, was transfered to Guangzhou on June 17.
(GUN) took delivery of its first 747-41BF on June 19, 2002.
News Item A-13: China Southern Airlines (GUN) took delivery of its 35th Airbus A330 wide body aircraft at Guangzhou Baiyun International Airport (CAN) on July 22.
The new A330-300 (B-5970), is also the third A330 featuring the SkyTeam (STM) Alliance livery following an A330-200 (B-6528) and A330-200 (B-5928).
The Guangzhou-based carrier joined the leading global airline network on November 15, 2007, becoming the 11th member carrier and the first Chinese member airline. In 2009, China Southern (GUN) painted its first airplane in SkyTeam (STM) livery, a Boeing 777-200 (B-2056). In 2011, the airline unveiled its first SkyTeam (STM) livery A330 (6528).
Boeing delivered to China Southern Airlines Cargo its 12th 777-200F freighter (B-2028) on July 22 at Seattle.
The new 777-F1B expands (GUN)'s cargo fleet to 14 airplanes, including 2 747-400Fs and 12 777Fs.
August 2015: News Item A-1: China Southern Airlines (GUN) reported a 2015 first-half net profit of +CNY3.48 billion/+$567.8 million, reversed from a net loss of -CNY1.02 billion in the year-ago period. (GUN) credited lower fuel prices and sold market demand growth as main reasons for the much-improved performance.
Operating revenue rose +6.2% to CNY53.33 billion, while operating expenses increased +4.14% to CNY43.56 billion, mainly due to a -28% decrease in fuel costs. (GUN) noted that operating revenue on international routes climbed +18.32% to CNY11.95 billion.
Passenger boardings jumped +12.9% to 53.48 million, with an average load factor of 80.9% LF, up +2.15 points over the year-ago period. Passenger revenue increased +17.2% to 91.3 billion (RPK)s against a +14.8% increase in passenger capacity to 112.94 billion (ASK)s. Cargo traffic volume rose +7.47% to 712,640 tonnes.
In the first half, (GUN) introduced 27 aircraft and phased out one aircraft. As of June 30, it operated 638 aircraft with an average fleet age of 6.2 years.
Looking ahead, (GUN) expects to continue to benefit from lower fuel prices and robust market demand growth, but it said many uncertainties remain, including exchange rate fluctuations.
In the second half, China Southern (GUN) expects to optimize its fleet by taking delivery of 28 aircraft and retiring nine aircraft.
News Item A-2: China Southern Airlines (GUN) on July 31 began 4x-weekly flights on the 1,516 km route between Shenzhen (SZX) and Ho Chi Minh City (SGN) in Vietnam. No other carrier currently operates this route. The following day, (GUN) began 2x-weekly flights (Tuesdays and Saturdays) on the 528 km route between Harbin (HRB) in north-east China and Vladivostok (VVO) in Russia. (GUN) will operate this route until October 10 and face competition from Aeroflot (ARO), which also operates the route with 2x-weekly flights. Both of these new routes will be served by (GUN)'s A320 fleet.
China Southern Airlines (GUN) has launched its first ever route to Africa from its main hub with the commencement of flights from Guangzhou (CAN) to Nairobi (NBO) in Kenya. (GUN)’s A330-200 touched down at Jomo Kenyatta International Airport at 07:00 on the morning of Wednesday August 5, having departed from (GUN)’s biggest base at 00:45. Flights on the 8,763 km route operate 3x-weekly on Mondays, Wednesdays and Fridays. Although China Southern (GUN) does not face any direct competition on the route, Kenya Airways (KEN) (which is also a member of the SkyTeam (STM) alliance) operates daily flights between Nairobi and Guangzhou, but with an intermediate stop in either Hanoi (on three days of the week) or Bangkok (on four days of the week).
China Southern Airlines (GUN) will start offering nonstop flights between Harbin, capital of Northeast China's Heilongjiang Province, and Ibaraki, Japan in the upcoming winter/spring flight season.
(GUN) has added another city pair to its expanding China - Japan network. On August 25 (GUN) began 3x-weekly flights (Tuesdays, Thursdays and Saturdays) on the 2,409 km sector between Zhengzhou (CGO) and Tokyo Narita (NRT) using its 737-800s. No other carrier serves this route. However, (GUN) and Spring Airlines (CQH) already serve Osaka Kansai from Zhengzhou. Last year Zhengzhou Xinzheng International Airport handled 15.8 million passengers (up +20.3%) making it China’s 17th busiest airport and fastest-growing among China’s top 20 airports.
From October 25, 2015 to March 26, 2016, (GUN) will operate the Harbin - Ibaraki service 2x-week on Tuesdays and Saturdays, using Airbus A320 aircraft.
Flight CZ6085 is scheduled to take off from Harbin Taiping International Airport (HRB) at 8:05 am and arrive in Ibaraki at 11:50 am, with the return flight CZ6086 leaving Japan at 12:50 pm and landing in Harbin at 2:45 pm.
Ibaraki Airport (IBR) is the third airport in Tokyo metropolitan area, after Haneda and Narita airports, and is designed as a secondary airport for Tokyo.
The new nonstop flights will facilitate travel and boost exchanges between northeast China and Japan in the fields of economy, tourism, personnel and others.
News Item A-3: China Southern Airlines (GUN) has joined (IAG) Cargo’s Partner Plus Program, an enhanced version of interline cooperation, which will allow (IAG) customers to book cargo space on a wide range of China Southern (GUN) destinations including Auckland International, Brisbane International, Melbourne Tullamarine, Perth International, and Urumqi.
“With the addition of China Southern (GUN), our program now offers our customers extended network reach across all the world’s key markets," Steve Gunning, (CEO) of (IAG) Cargo, said. "Our focus is now shifting away from adding new members and onto deepening our commercial relationships with the existing members of the program.”
As the freight arm of British Airways (BAB) and Iberia (IBE), (IAG) Cargo’s Partner Plus Program also counts Qatar Airways (QTA), (JAL) - Japan Airlines, the Avianca (AVI) Group, American Airlines (AAL)), and Finnair (FIN) as members.
News Item A-4: An Airbus A320 (B-1697) aircraft, assembled in Tianjin, arrived at Shenzhen Bao'an International Airport (SZX) on August 8 to join the fleet of China Southern Airlines (GUN)'s Shenzhen Branch (SHZ). So far, the branch company owns 42 aircraft.
The aircraft is (GUN)'s first A320 aircraft painted with "SkyTeam" (STM) Alliance livery and the branch company's first "SkyTeam" aircraft.
With the delivery of this new aircraft, (GUN) is believed to enhance its transport capacity in Shenzhen for the summer travel season.
September 2015: News Item A-1: China Southern Cargo (GUN) and Martinair Cargo (MTH), a subsidiary of Air France (AFA) - (KLM), signed a Memorandum of Understanding (MOU) to cooperate on air freight services on September 15.
This new move will deepen the partnership between the two carriers, providing more efficient cargo services for each other's customers by making full use of their respective advantages.
China Southern (GUN) has a complete route network in Asia Pacific, while Martinair Cargo (MTH) is one of the largest cargo carriers in the European, African and trans-Atlantic market.
The two parties have agreed to open passenger and cargo capacity to each other on Sino - Europe routes and access to each other's exclusive destinations. Martinair Cargo (MTH) will take advantage of (GUN)'s Asia-Pacific network to transport cargo to Sydney and Melbourne in Australia, Hanoi and Ho Chi Min City in Vietnam from Guangzhou. China Southern (GUN) Cargo will transport their cargo on Martinair Cargo (MTH)'s wide body aircraft through Paris and Amsterdam to Atlanta, Miami, St Paul, Buenos Aires, Lagos, and other destinations.
In their initial cooperation, the two parties will focus on improving connections and efficiency in order to offer smooth and seamless journey for clients.
What's more, the two sides will also strengthen cooperation to jointly create express and mail transport products so as to meet the travel demands of surging transborder e-commerce between Asia and Europe.
News Item A-2: Hundreds of flights to and from Taiwan were affected due to the approach of Typhoon Dujuan on September 28.
Xiamen Airlines (XIA) announced it had canceled all flights to and from Taiwan on September 28 affected by super Typhoon Dujuan, which landed in Taiwan early in the morning. The involved flights were MF881, MF882, MF883, MF884, MF887, MF888, MF879 and MF880, between Fuzhou, Xiamen, and Taiwan.
It was estimated that flight operations would continue to be disturbed in Fuzhou, Xiamen, and Quanzhou on September 29 as a result of the northwestward moving of Typhoon Dujuan to southeast China's Fujian province.
Taiwan-based China Airlines (CHI) announced it was cancelling 20 flights for September 28 and September 29.
China Southern Airlines (GUN), the largest airline in Asia by passengers carried, has planned to cancel 18 flights to and from Taiwan on September 28.
Shandong Airlines (SHG) canceled its flights to Taipei from Jinan and Yantai on September 28.
News Item A-3: China Southern Airlines (GUN)has cancelled its flights to Nepal from September 29 until October 10, stating that it would not be able to fly without refueling at Kathmandu's Tribhuvan International Airport (TIA). More airlines are likely to follow suit.
Citing that jet fuel crisis is likely to deepen on the heels of the unofficial trade embargo imposed by India, the airport authority has barred foreign carriers to refuel at (TIA) from September 29 onwards.
The airport authorities on September 28 sent a notice to foreign airlines flying the Nepal sector that the cutbacks would come into effect by 12:00 pm on September 29.
(TIA) officials have said that the tough decision was taken in response to requests made to them by the Nepal Oil Corporation (NOC).
"We are sorry to inform passengers that due to jet fuel problem in Nepal, China Southern Airlines (GUN) has canceled its flight from Guangzhou - Kathmandu - Guangzhou effective from September 29 to October 10," the airline said in its Facebook page.
More airlines are preparing to suspend flights to Nepal for a temporary period, according to airlines' officials.
Dhiraj Chandra Shrestha, Deputy Sales Manager of (GUN), said that they have been flying a 115-seater A319 on the Kathmandu - Guangzhou route and the plane cannot carry a full load of passengers, cargo and a full load of fuel.
He said that (GUN)the airline is also is on a "wait and see" mode after October 10. "We also have been discussing with Bangladesh to provide refueling facilities."
News Item A-4: China Southern Airlines (GUN) has selected Thales (THL) Dual Head Up Displays (HUD) configuration across 30 of their new Airbus A320s, alongside the company’s Flight Management System (FMS) and Low Range Radio Altimeter (LRRA). The order represents Thales (THL)’s largest contract for (HUD)s and the first for a dual configuration system since the Civil Aviation Authority of China (CAAC) made it mandatory for all Chinese registered aircraft to be equipped with (HUD)s.
October 2015: News Item A-1: China Southern Airlines (GUN) will launch two non-stop flights to Malaysia, said its General Manager in Kuala Lumpur, Li Yi Dong.
He said the routes, from Kuala Lumpur to Changsha, would start next month, and Kota Kinabalu (Sabah) to Guangzhou in December.
"We will operate a daily flight from Kuala Lumpur to Changsha and the frequency for Kota Kinabalu - Guangzhou route is still in discussion," he said.
Li said (GUN) had also planned to increase its flight frequencies between Guangzhou and Kuala Lumpur soon.
"Currently, we have three flights per day. However, we have not decided the new frequencies, as it depends on the market and other elements," he said.
News Item A-2: China Southern Airlines (GUN) announced to launch three new services between Wuhan and Tokyo, Rome, and Dubai in the upcoming winter/spring flight season from October 25, 2015 to March 26, 2016.
Starting October 27, the 2x-weekly Wuhan - Tokyo service will be operated on Tuesdays and Fridays. The Tokyo-bound flight is scheduled to take off from Wuhan at 8:20 am and land in Tokyo at 1:30 pm (all local times).
From December 16, the Guangzhou - Wuhan - Rome service will be operated every Monday, Wednesday and Friday. The Rome-bound flight is scheduled to depart from Guangzhou at 9:30 pm and arrive in Wuhan at 11:20 pm, with the second leg leaving Wuhan at 0:45 am the next day and reaching Rome at 6:15 am the next day (all local times).
The Shenzhen - Wuhan - Dubai service is set to operate on Tuesdays, Thursdays, and Saturdays starting January 12, 2016. The Dubai-bound flight is scheduled to take off from Shenzhen at 12:00 pm and land in Wuhan at 1:55 pm, with the next leg leaving Wuhan at 3:25 pm and reaching Dubai at 9:05 pm (all local times).
During the 154-day long new flight season, (GUN) will operate 15 international and regional routes starting from Wuhan, covering San Francisco, Moscow, Rome, Dubai, Bangkok, Phuket, Seoul, Jeju, Tokyo, Shizuoka, Nagoya, Kaohsiung, Taipei, Macao, and Hong Kong.
Moreover, (GUN) plans to launch a new nonstop service linking Guangzhou with Christchurch in New Zealand from December 16, thus promoting (GUN)'s destinations in New Zealand to six (Sydney (three flights per day), Melbourne (18x-weekly), Brisbane (one flight per day), Perth (4x-weekly), Auckland (two flights per day) and Christchurch (3x-weekly).
In North America,(GUN) plans to increase the Guangzhou - New York flight to daily, and Guangzhou - Los Angeles to 10x-weekly. Of which the night flight CZ327 is till performed by the world's largest Airbus A380 superjumbo. The daily, Guangzhou - Vancouver and 4x-weekly Guangzhou - Wuhan - San Francisco service will be operated by 787 Dreamliners.
In Europe, (GUN) could reach eight cities including Amsterdam, London, Paris Rome, Frankfurt, Istanbul, Moscow, and St Petersburg. During peak season, the Beijing - Amsterdam flight will be flown by A380 aircraft.
China Southern Airlines (GUN) will expand its capacity on Southeast Asia, South Asia, and Central West Asia routes during the new flight season.
News Item A-3: "China Southern Plans More International Routes in New Flight Season" by Michelangelo Ji, WCARN.com October 26, 2015.
Since October 25, China's civil aviation sectors has entered the 2015 - 2016 winter/spring flight season, during which China Southern Airlines (GUN) plans to open 41 new air routes, including 23 international and regional services, plus 18 domestic services.
What's worth to note is that it is the first time (GUN) deploys more capacity on regional & international routes than domestic ones, an increase of >30%.
In the new flight season, (GUN) will operate more than >1,600 flights daily on 605 routes to 195 domestic and overseas destinations.
The 23 international services are mainly alongside "the Silk Road Economic Belt and the 21st-Century Maritime Silk Road". From December 16, (GUN) will launch a 3x-weekly, Guangzhou - Wuhan - Rome service, using A330-200 aircraft, which is its first flight to Italy.
By then, China Southern (GUN) will operate 10 routes and 50 flights weekly to Europe, along with its direct services from Guangzhou to Paris, Amsterdam, London, Frankfurt, Moscow, and Beijing - Amsterdam - Istanbul, as well as Lanzhou - Urumqi - St Petersburg routes.
Meanwhile, in order to meet travel demand, (GUN) will add more flights to Southeast Asia, by resuming the Guangzhou - Sabah route and launch new flight from Shanghai Pudong to Pattaya, Thailand. Besides, a series of new routes connecting inner cities to Southeast Asia will also be planned, including Yinchuan - Changsha - Kuala Lumpur, Lanzhou - Changsha - Kuala Lumpur, Harbin - Wuhan - Bangkok, Dalian - Zhengzhou - Bangkok, and Changsha - Nanning - Chiang Mai routes.
For the Middle East, China Southern (GUN) plans to open Shenzhen - Wuhan - Dubai in January 2016 and increase flight frequencies of Urumqi - Alma-Ata and Urumqi - Astana routes.
Apart from regions along the "Belt and Road," (GUN) also ramps up capacity in other overseas markets, such as Australia, New Zealand, North America, etc.
(GUN) will provide more flights to New Zealand and Australia. Starting December 16, (GUN) will launch a 3x-weekly, 787 service from Guangzhou to Christchurch, marking (GUN) will extend its reach to the south part of New Zealand.
A new nonstop service linking Shenzhen and Sydney will be operated 3x-week. In addition, (GUN) will use an A380 superjumbo to fly between Guangzhou and Sydney. In December, Guangzhou - Sydney and Guangzhou - Melbourne services will be further enhanced, when (GUN) would operate 70 flights weekly to Australia and New Zealand, marking a new high.
In North American market, (GUN) will deploy more-advanced aircraft such as A380, 787 and 777-300ER. Flights departing from Guangzhou to Vancouver, New York, and San Francisco will fly on a daily basis, while the Guangzhou - Los Angles service will be offered 10x-week.
For domestic routes, (GUN) will improve flight schedules on key routes like Beijing, Shanghai, Shenzhen, Chengdu, Guangzhou, Sanya, and Urumqi, adding more flights on domestic popular routes and adjusting time tables.
News Item A-4: China Southern Airlines (GUN) has launched six new routes at the start of the winter season, three within China and a further three to Japan. Only the 2,884 km route between Changsha (CSX) and Tokyo Narita (NRT) is not already served by at least one other carrier.
Beihai (BHY) to Guilin (KWL), 737-800 7x-weekly, vs China Express Airlines (HXA) 3x, to Xi'an (XIY) - via (KWL), 7x, vs Sichuan Airlines (SIC);
Changsha (CSX) to Tokyo (NRT), A320 2x;
Dalian (DLC) to Fukuoka (FUK), A320 3x, vs Air China (BEJ) 7x;
Guangzhou (CAN) to Tokyo (HND), E190 14x, vs All Nippon Airways (ANA) 7x, Japan Airlines (JPL);
Nanchang (KHN) to Ningbo (NGB), 737-800, 5x, vs China Eastern Airlines (CEA) 4x, (SIC) 3x.
News Item A-5: China Southern Airlines (GUN) has officially launched its cadet pilot (FC) program for 2016 as it continues to expand its fleet size and international route network.
(GUN) plans to recruit up to 800 cadet pilots (FC) in 13 provinces across the country next year, including 90 cadets from Hubei Province.
Cadet pilots (FC) should be male high school graduates between the ages of 16 and 20. Applicants will be tested on physical, personality, mental and behavioral criteria to see whether they have potential as pilots (FC).
Once recruited, the cadet pilots (FC) will be admitted to Beijing University of Aeronautics & Astronautics and Civil Aviation Flight University of China. After that, they will be sent abroad for flight training. It takes about four years to become a qualified pilot (FC).
In addition, China Southern (GUN) will provide cadet pilots (FC) with up to 1.1 million yuan for paying tuition.
November 2015: News Item A-1: "China Southern Nearly Quadruples 9-month Net Income" by (ATW) Katie Cantl, November 4, 2015.
China Southern Airlines (GUN) reported a net income of +CNY4.66 billion/+$734 million for the first nine months of 2015, up nearly fourfold from +CNY1.26 billion in the year-ago period.
Operating revenue for the nine-month period rose +4.3% to CNY 85.33 billion, while operating expenses decreased -0.9% to CNY80.67 billion.
(GUN) attributed the profit increase to lower fuel prices and market demand growth.
However, for the third quarter, China Southern (GUN) reported a profit drop of -36.4% with a net profit of +CNY1.65 billion compared to +CNY2.6 billion in the year-ago quarter. Industry analysts said yuan depreciation was the main culprit for the decline.
News Item A-2: RoutesNews, November 18, 2015
China Southern Airlines (GUN) is canceling service to Mauritius, as the Skyteam (STM) Alliance member closed reservations for Shenzhen – Mauritius flights on/after November 28, 2015. This route is currently served by Airbus A330-300 aircraft, 2x-weekly. The last flight is scheduled on November 23/24, 2015.
News Item A-3: "China Southern Chairman Named in Corruption Investigations" by (ATW) Jeremy Torr, November 10, 2015.
The Chairman of China Southern Airlines (GUN), Si Xianmin, is being investigated for “severe violations of discipline,” according to a statement from Chinese corruption monitoring agency, the Central Commission for Discipline Inspection (CCDI).
(GUN), one of China’s “big three” state-owned carriers and the largest in Asia with a 500-plus aircraft fleet, has seen ongoing inquiries into the practices of its senior executives in recent months.
Si is the sixth executive to be named by corruption investigators looking at China Southern (GUN). Earlier this year, the (CCDI) named (CFO), Xu Jiebo and high-ranking executives, Tian Xiaodong, Chen Gang and Zhou Yuehai as being under suspension and investigation for “job-related crimes,” which has been used previously as a descriptor for corruption.
And in October, (GUN) fired Executive VP, Liu Qian after he was named as a suspect in a corruption investigation. At the time, the carrier said “the case for investigation of Liu Qian [is] due to the suspicion of bribery crime.”
Additionally, reports indicate that several Civil Aviation Administration of China (CAAC) officials and the General Manager of Beijing Capital Airport, Shi Boli, had been detained and were being investigated on suspicion of corruption.
China Southern (GUN) reported an increase in profit for the first nine months of 2015, but third-quarter profit was down -36% compared to the same quarter last year.
News Item A-4: China Southern Airlines (GUN) plans its flights with Lufthansa Systems (LHS)’ Lido/Flight. (GUN) has been a Lufthansa Systems customer since 2007 and is also using the NetLine/Plan and NetLine/Sched solutions from the airline Information Technology (IT) specialist for its medium- and short-range flight planning.
December 2015: News Item A-1: "Virgin America (VUS) Launches Code Share Agreement with China Southern Airlines (GUN)" December 29, 2015.
Virgin America (VUS) and China Southern Airlines (GUN) announced a code share agreement to offer seamless booking and travel between China, SE Asia and multiple (VUS) destinations across the (USA).
Under the new agreement, (GUN) will place its two-digit airline code (CZ) and flight numbers on a range of (VUS) routes operating from Los Angeles and San Francisco (including West Coast flights to and from Boston, Chicago, Dallas Love Field, Fort Lauderdale, Las Vegas, Newark, New York (JFK), Seattle, San Diego, and Washington DC). This partnership will bring expanded choice and convenience for travelers flying between (GUN)'s numerous Chinese and Southeast Asia destinations and the USA.
This agreement is unique in that (GUN) is the only airline offering non-stop service between Guangzhou and Wuhan and the (USA). This code share arrangement allows a one-stop booking process, a single ticket and one-stop check-in, including baggage handling, for the entire journey. Code share flights can be booked today via (GUN)'s website, call center (+86-4008695539-1-4), the Global Distribution System (GDS), and travel agents.
"China is a significant inbound and outbound tourism market and we are extremely pleased to partner with (GUN), Asia's largest carrier by fleet size, and an airline that shares (VUS)'s commitment to providing excellent, guest-focused service," said Adam Green, (VUS)'s Director of Network Planning. "We look forward to welcoming (GUN) guests on board our flights, as we provide them with our signature, award-winning (VUS) service to and from destinations across our USA route network."
"We are thrilled to expand our network further into the USA with (VUS)," said Mr Zhao Xiaosong, Senior VP International Affairs & Alliances of (GUN). "The USA is a substantial market for us and through this partnership we could offer our passengers more travel destinations via Guangzhou. We look forward to working closely with (VUS) in the future."
(GUN), which is headquartered in Guangzhou, offers daily flights from Guangzhou to San Francisco (3x-weekly with one stop in Wuhan), 10x-weekly from Guangzhou to Los Angeles, and daily flights from Guangzhou to New York. (GUN) has the most extensive network in China and in Asia and a strong presence in Europe and Oceania.
The agreement announced today builds and expands on (GUN)'s existing interline arrangement with (VUS). (GUN) is (VUS)'s sixth code share agreement and joins (VUS)'s growing partner portfolio. (VUS) offers mood-lit aircraft with three custom-designed classes of service, touch-screen personal entertainment and an on-demand food and cocktail menu on every flight. In addition to a Main Cabin that offers custom leather seating with a deeper, more comfortable pitch, (VUS)'s First Class (F) cabin offers plush white leather seating with 55 inches of pitch, 165 degrees of recline and lumbar massagers. (VUS)'s Main Cabin Select service offers 38-inches of pitch, free food and cocktails, an all-access pass to media, dedicated overhead bins and priority check-in/boarding.
The Red™ entertainment platform offers guests their own seat back touch-screen, with +20 latest release films, TV, interactive maps, video games, a 3,000 song library, surround sound technology and an on-demand menu, which allows flyers to order from their seat back any time during a flight. With a full service First Class (F) menu and a unique on-demand menu in the Main Cabin, (VUS) was named "Travel + Leisure" Magazine's "Best USA Airline for Food" in 2014 and 2015. (VUS) has also been a stand-out in the industry for its operational performance. For the past three years, (VUS) has been recognized as the number one ranked carrier in the Airline Quality Rating (AQR) report, an annual study of USA domestic airline performance conducted by professors at Wichita State University and Embry-Riddle Aeronautical University (measuring on-time performance, customer complaints, denied boarding and mishandled bags).
Since its 2007 launch, (VUS)irgin America has created nearly 3,000 jobs. As of March 15th, 2016, (VUS) will serve 24 destinations in the USA and Mexico.
* About Virgin America (VUS):
Known for its mood-lit cabins, beautifully designed classes of service and innovative fleet wide amenities (like touch-screen personal entertainment, WiFi and power outlets at every seat, (VUS) has built a loyal following of flyers and earned a host of awards since launching in 2007 (including being named both the "Best USA Airline" in both Conde Nast Traveler Readers' Choice Awards and "Best Domestic Airline" in Travel + Leisure World's Best Awards for the past eight consecutive years. (VUS) serves Austin, Boston, Cancun, Chicago, Denver (as of March 15, 2016), Dallas Love Field, Fort Lauderdale, Las Vegas, Los Angeles, Los Cabos, Newark, New York (JFK) and (LGA), Orlando, Palm Springs (seasonal), Portland, Puerto Vallarta, San Diego, San Francisco, Seattle, Washington D C (IAD) and (DCA), Honolulu, and Maui - Kahului.
* About China Southern Airlines (GUN):
Established in 1991, (GUN) is one of the three major carriers in mainland China, with over >100,000 employees around the globe. (GUN) ranks 1st in Asia and 3rd in the world with regards to traffic volume in 2014, with the highest safety record in China. Together with 19 SkyTeam (STM) members, (GUN) connects passengers with 16,000 daily flights to over >1,052 destinations in 177 countries and regions. (GUN) has been awarded as a Skytrax 4 star airline, with continues efforts to provide passengers seamless and attentive travel experience.
News Item A-2: China Southern (GUN) will purchase an additional 4% stake in subsidiary, Xiamen Airlines (XIA) for CNY627 million/$97.7 million to enhance the synergy between the two carriers.
(GUN) currently holds a 51% stake in (XIA), while the Xiamen Construction & Development Company holds 34% ownership and the Jizhong Energy Group holds the remaining 15%. According to a statement released by (GUN), the Jizhong Energy Group is expected to transfer its 15% stake in Xiamen Airlines (XIA) to the Xiamen Construction & Development Company, which would be followed by (GUN)’s and the Fujian Investment Company’s purchase of 4% and 11% stakes in (XIA), respectively, from the Xiamen Construction & Development Company.
After the deal is complete, (GUN) will hold 55% ownership of (XIA), while the Xiamen Construction & Development Company will hold a 34% stake and the Fujian Investment Company will hold an 11% share.
One of most profitable carriers in China, Xiamen Airlines (XIA) has maintained a consecutive profit for 27 years. In 2014, it reported a net profit of +CNY752 million and posted a net income of +CNY1.13 billion for the first nine months of 2015.
News Item A-3: "Guangzhou Airport Slots Sold at Auction for 550 Million Yuan" By Lena Ge, China Aviation Daily, December 30, 2015.
The Civil Aviation Administration of China (CAAC) (CAC) auctioned nine slot pairs at Guangzhou Baiyun International Airport (CAN), marking the first airport auction in the history of Chinese civil aviation industry.
According to a notice on the official website of the (CAAC) Central and Southern Regional Administration, as many as 34 airlines took part in the auction. Six Chinese airlines including Urumqi Airlines (URQ), China Southern Airlines (GUN) and Colorful Guizhou Airlines have won in the auction for nine coveted slots at Guangzhou Airport, bidding 550 million yuan totally.
With the next-highest bid of 90.99 million, start-up carrier Urumqi Airlines (URQ) won the fourth slot pair at the auction, giving the Urumqi-based airline its first entry into Guangzhou. The next-highest bid was 90.3 million yuan.
Colorful Guizhou Airlines (GIZ) bid 30.1 million yuan for the first slot pair, or the right to operate four round-trips a week at Guangzhou airport.
Shenzhen Airlines (SHZ) won the second and the seventh slot pairs by bidding 26.15 million yuan and 90.09 million yuan.
China Southern Airlines (GUN) won the third and sixth slot pair at the auction, offering 81 million yuan and 90 million yuan, respectively.
Start-up (URQ) offered 90.99 million yuan for the fourth slot pair, becoming the top bidder in the auction, according to bidding data.
China Eastern Airlines (CEA) won the fifth slot pair at the auction for 90.3 million yuan. Shantou Airlines (SHT), a subsidiary of (CEA), bid 143 million yuan for the first round, but gave up.
For the last airport slot pairs, Xiamen Airlines (XIA) and Zhuhai Airlines (ZHU) won the bids at 30.01 million yuan for each.
Early December 2015, China's aviation watchdog announced to pilot competitive slot allocation at two key airports next year - Shanghai Pudong International Airport (PVG) and Guangzhou Airport, a move that could give private airlines a fairer opportunity to get some desired slots compared with state-owned carriers which have been favored so far.
Under the proposed pilot (FC) reform, half of the 196 new weekly slots at each airport next year will be allocated on international routes by the (CAAC); while the other half for domestic services will be decided by "auction" and "lottery plus paid fees."
Slots are valid for three years, during which carriers will be allowed to exchange, transfer or lease them in the secondary market.
News Item A-4: China Southern Airlines (GUN) has committed to 30 Boeing 737NGs and 50 737 MAXs, valued at $8.4 billion at current list prices, and its Xiamen Airlines (XIA) subsidiary is to take 30 Boeing 737 MAXs.
January 2016: China Southern Airlines (GUN) on January 27 launched its fifth route between China and Australia, its second to Sydney (SYD) and its first from Shenzhen (SZX). The new 3x-weekly service on the 7,424 km route will be operated by (GUN), the SkyTeam (STM) member’s 284-seat A330-300s. Flights depart China on Wednesday, Friday and Sunday evenings arriving in Australia early the following morning. The return flights depart Sydney on Mondays, Thursdays and Saturdays. (GUN) already serves four Australian airports (including Sydney) from its Guangzhou hub.
February 2016: News Item A-1: China Southern Airlines (GUN) began 3x-weekly, Shenzhen - Sydney Airbus A330-300 service.
News Item A-2: Chongqing Airlines ((IATA) code OQ) (CGQ) has launched its first international service. On February 4, (CGQ), a subsidiary of China Southern Airlines (GUN), began 3x-weekly flights between Chongqing (CKG) and Bangkok Suvarnabhumi (BKK) using its A320s. The 1,881 km route is already served by Thai Airways (TII) with a daily A320 service while indirect competition comes from Thai AirAsia (THA), who operates a 2x-daily service between Chongqing and Bangkok Don Mueang. (CGQ) operates a fleet of 12 narrow-body Airbus aircraft, four A319s and eight A320s. (CGQ) operates a raft of domestic routes from Chongqing Jiangbei International Airport, which last year handled 32.4 million passengers, making it China’s ninth busiest airport.
News Item A-3: "Guangzhou Airport Passenger Traffic Up +6.6% in January 2016" by Joy Wong, China Aviation Daily, February 17, 2016.
As many as 4.75 million passengers traveled through Guangzhou Baiyun International Airport in January, up +6.6% over the same period last year, the airport said on February 16.
The airport handled 35,758 aircraft movements in the past month, climbing +4.3% from a year earlier.
Cargo traffic amounted to 137,801 tonnes, an increase of +8.9% year on year.
February 2016: PacAvi, a USA-based conversion specialist and component Maintenance Repair & Overhaul (MRO), and Guangzhou Aircraft Maintenance Engineering (GAMECO) have completed preliminary design review of their joint A320 and A321 passenger-to-freighter (PTF) conversion program and remain on track to bring it to market in 2017. The (PTF) conversion on the A320 will take place in Guangzhou, where (GAMECO) will also develop PacAvi’s A321 (LITE) prototype.
March 2016: News Item A-1: "China Southern to Launch Yiwu - Taipei Service on March 31" by Lena Ge, China Aviation Daily, March 09, 2016.
To meet increasing travel demand to Taiwan, China Southern Airlines (GUN) plans to launch a Yiwu - Taipei service on March 31.
(GUN) will deploy Boeing 737-800s on the once weekly service. Every Thursday, flight CZ603 is scheduled to take off from Taipei Taoyuan International Airport at 5:05 pm and arrived in Yiwu at 6:40 pm, with the return flight CZ604 leaving for Taipei at 7:10 pm.
As of now, China Southern (GUN) has operated 19 nonstop flights between mainland China and Taiwan. With the new Yiwu - Taipei service, (GUN) will be the only operator on the route.
News Item A-2: "Direct Flights to Link China's Guiyang with Seoul, Tokyo" by Xinhua, March 16, 2016.
Direct air routes linking Guiyang, capital of southwest China's Guizhou Province, with Seoul, South Korea, and Tokyo, Japan, are expected to be launched in April and August, respectively, according to China Southern Airlines (GUN).
There will be three flights between Guiyang and Seoul and two flights between Guiyang and the Japanese capital each week, according to (GUN). Guizhou, a mountainous, lesser-developed province in southwest China, currently has international routes with Bangkok and Phuket in Thailand as well as Osaka, Japan.
News Item A-3: "New Chairman Appointed for China Southern Airlines (GUN)" by (ATW) Katie Cantle, March 1, 2016.
The Chinese government has appointed former Transport of China Vice Mminister, Wang Changshun as China Southern Airlines (GUN)’s new Chairman. He succeeds Si Xianmin, who stepped down due to a “severe violation of discipline and laws” in early November 2015.
Wang was (GUN)’s Vice Chairman between October 2000 and July 2004, when he was appointed as Vice Minister of the Civil Aviation Administration of China (CAAC).
Along with other Chinese carriers that predict big full-year profit increases for 2015, China Southern (GUN) estimates its net income will jump +110% to +130% in 2015, compared to a net profit of +CNY1.77 billion/+$288 million in 2014.
(GUN) cited the rapid increase of market demand (especially since international routes have become a new growth point) and lower fuel prices as main reasons for the projected profit increase.
News Item A-4: First (WOW) Air A330 Emerges from Paint Shop at Guangzhou" by China Aviation Daily, March 18, 2016.
Guangzhou Aircraft Maintenance & Engineering (GAMECO), which is based at China's Guangzhou Baiyun International Airport, has completed painting of (WOW) Air's first Airbus A330 aircraft.
(WOW) Air is set to take delivery of its first A330-300 aircraft from (ICBC) Leasing later this month, which will be used on its long-haul flights to San Francisco and Los Angeles in June 2016.
Powered by Rolls-Royce (RRC) (Trent 772B engines-60), the A330-300 aircraft is configured with 340 seats in an all-economy layout. Seat pitch will vary from 30 inches as standard to 34 inches at an additional charge.
To sever its new North American routes, (WOW) Air will have three all-economy A330-300s in its fleet, with the second and third one pending delivery in June and July, (WOW) said.
April 2016: News Item A-1: China Southern Airlines (GUN) reported a net profit of +CNY3.85 billion/+$593 million in 2015, more than doubled from a net income of +CNY1.77 billion in 2014.
Full-year operating revenue rose +3% to CNY 111.47 billion, while operating expenses fell -3.7% to CNY91.38 billion.
(GUN) credited lower fuel prices and the rapid growth of outbound travel as main reasons for the much-improved performance.
Passenger boardings increased +8.4% to 109.4 million with an average load factor of 80.5% LF, up +1.39 points over the prior year. Passenger capacity grew +12.3% to 235.62 billion (ASK)s against an increase of +13.8% increase in passenger revenue to 189.59 billion (RPK)s. Cargo traffic volume rose +5.5% to 1.5 million tonnes.
(GUN) introduced 58 new airplanes and retired three airplanes in 2015. As of December 31, 2015, it operated 667 airplanes.
Looking ahead, (GUN) predicts the robust growth of air transport market will continue, but it warns that exchange rate fluctuations and “increasingly fierce competition from low-cost carriers (LCC)s, high-speed rail, and foreign carriers” still remain as challenges. This year, it plans to take delivery of 58 airplanes and phase out 18 airplanes.
News Item A-2: Guangzhou Aircraft Maintenance Engineering (GAMECO) has opened a new 18,000 sq m landing gear overhaul facility close to Baiyun International Airport in Guangzhou. The shop will disassemble, clean, repair, machine, plate, assemble and test gear on Airbus A320 family aircraft, A330s, and variants of Boeing 737s. It will service China Southern Airlines (GUN) and other customers.
July 2016: News Item A-1: China Southern Airlines (GUN) is seeking rights to launch a nonstop service between Shenzhen and Jakarta, Indonesia in this August.
Pending government approval, (GUN) will use Airbus A321/A320/A319 aircraft on the Shenzhen - Jakarta route, according to a notice released Monday by the Civil Aviation Administration of China (CAAC).
(GUN) plans to operate the service on a daily basis.
News Item A-2: China Southern Airlines (GUN), the largest airline in China, announced an expansion of their code share cooperation with Aeroflot (ARO). Both (GUN) and (ARO) are members of the SkyTeam (STM) Alliance.
Starting this month, Aeroflot (ARO) will place its SU code on China Southern Airlines (GUN) flights between Guangzhou and Moscow, as well as its Guangzhou - Wuhan - Moscow service.
(GUN) and (ARO) code share cooperation originated in 2007 and with this new arrangement in place, both SkyTeam (STM) affiliated airlines will provide more convenient travel services to passengers traveling between China and Russia.
According to the Russia Tourism Administration, from the first quarter of 2014, China became the biggest outbound tourism market to Russia.
In 2015, approximately 67,000 Chinese passengers traveled to Russia, an increase of +67% compared with the previous year. Considering this huge market growth potential, (GUN) launched several scheduled flights between China and Russia, including Guangzhou to Moscow and Urumqi to St Petersburg.
News Item A-3: The first Airbus A320neo aircraft for China Southern Airlines (GUN) has taken to the skies on its test flights. (GUN)'s first A320neo (B-8545), completed its first flights on July 1, 2016.
In early 2015, China Southern (GUN) signed an agreement with Dutch lessor, AerCap (DEA) for 24 A320neo aircraft. Delivery of the A320neos to (GUN) is scheduled between 2016 and 2019.
August 2016: 737-81B (43891, B-7970), (ICBC) Leasing leased, A320-214 (7151, B-8547), ex-(B-OOOP), and A321-211 (7250, B-8639), ex-(D-AYAG) deliveries.
September 2016: News Item A-1: China Southern Airlines (GUN) has deployed a Boeing 787-8 Dreamliner on its route from Guangzhou, South China's Guangdong Province, to Urumqi, Northwest China's Xinjiang Uyghur Autonomous Region.
The 787-8, one of the latest Boeing airplanes will be the first that China Southern (GUN) has introduced on such a route.
The Boeing 787 family has created an abundance of design and technical applications in terms of technology and environmental protection, illustrating a modern green concept. It has a better engine casing design that can help reduce noise both inside and outside the cabin. It has large passenger windows, and passengers can adjust the brightness around their seats with (LED) lighting.
(GUN) has equipped every economy (Y) class seat on the 787-8 with nine-inch entertain screens, on which passengers can listen to music and watch movies and television shows. Because the monitors are equipped with (USB) ports, passengers can use them to browse photos, (PDF) files, and check the flight's real-time route map.
The headrest on every economy (Y) class seats can be adjusted in four directions, and the position of the seat cushion can be changed with the backrest to make it easier for passengers to relax on their flight.
The Boeing 787-8 offers passengers amenities such as larger windows, larger stow bins, modern (LED) lighting, higher humidity and cleaner air, making for an altogether smoother ride.
* Doubling Down
China Southern (GUN) deployed its first Boeing 787-8 in 2013. That plane has 228 seats: 4F in first class, 24C in business class and 200Y in economy class. Compared with airplanes of similar size, the 787-8 consumes -20% less fuel.
At a forum in May with Xinjiang officials, China Southern Airlines (GUN) Group executives mentioned building the region into an international transport hub.
(GUN)'s branch in Xinjiang has introduced five new Boeing 737-800 and has made an effort to get a 787-8 flight to the region.
In September, the branch plans to open routes from Lanzhou to Moscow and Beijing to Tbilisi (both via Urumqi) to encourage local aviation hub construction.
With the help of the local government, China Southern (GUN) has rapidly grown its business, boosted its capacity investment and raised awareness of its brand in the region, said Fu Puyan, General Manager of (GUN)'s Xinjiang branch. Every year, (GUN) has continued to increase its number of routes and passengers.
During the period of China's 13th Five-Year plan (2016-20), China Southern (GUN) will actively participate in the construction of the Silk Road in Xinjiang Economic Zone, continue to increase its transport capacity, and increase its domestic and international routes to promote the rapid development of Xinjiang's air transport market.
The region's Gross Domestic Product (GDP) grew by +8% year-on-year in the first half of 2016, up by +1.1% point from the first quarter. The growth rate was the 13th highest of China's 31 provinces and regions.
As of Friday, there were 700 aircraft in China Southern (GUN)'s fleet (the fourth largest in the world. (GUN) said it plans to increase the size of its fleet to 1,000 airplanes by 2020. Currently, (GUN)'s international capacity accounts for 31% of its total transport capacity, and it has created four transfer hubs, one each in Guangzhou, Urumqi, Beijing, and Chongqing.
News Item A-2: China Southern Airlines (GUN) is planning to open a route between Shenzhen, China, and Brisbane, Australia, in November, joining China Eastern Airlines (CEA) in commencing services to the eastern Australian city this year.
(GUN) proposes to fly daily between Brisbane and the highly-developed city in China’s Guangdong province. Brisbane is Australia’s 3rd-largest city, with a population of around 2.3 million, when the adjacent city of Gold Coast is included. The city is attracting much attention from Chinese real estate developers. But (GUN) is likely to be targeting mainly tourist traffic, since Brisbane is also the gateway to many sunny attractions in Australia’s Queensland state, including Gold Coast.
Demand for holidays in Australia is the key factor behind Chinese airlines’ heavy preference for opening routes to the country over the past 2 years.
Airbus A330-200s and A330-300s, Boeing 787s or 777-300ERs will
be used on the Brisbane service, the Civil Aviation Administration
of China (CAAC) said in announcing China Southern (GUN)’s plans.
In December, China Eastern (CEA) will resume a Shanghai – Brisbane
service that it tried out early in 2015. It will also fly daily.
(GUN) is also proposing to fly 3X-weekly between Moscow and Changsha, China, with an extension to Guangzhou, China, (GUN)’s home base. This service is planned to commence in December, using A330-200s, A330-300s or 787s.
Tianjin Airlines (GCR), part of the (HNA) Group, proposed in February
to open a weekly service between Moscow and Chongqing, China,
starting in June, but it has not yet done so. (GCR) is, however, operating on the Moscow – Tianjin, China, route.
Bradley Perrett, email@example.com Research by Ryan Wang.
October 2016: China Southern Airlines (GUN) has ordered 12 Boeing 787-9 airplanes in an effort to facilitate its rapid international expansion. The deal is worth $3.25 billion at list prices, according to a filing released by the Guangzhou-based carrier through the Shanghai Stock Exchange.
The 787-9s are scheduled to be delivered between 2018 and 2020. 5 787-9s will be delivered in 2018, 4 in 2019 and 3 in 2020. The transaction still needs (GUN) shareholder and government approval.
(GUN) was the 1st Chinese carrier to introduce 787-8 airplanes in 2013. (GUN) operates 10 787-8s on international routes from Guangzhou to London, Rome, Vancouver, Perth, Auckland, and Christchurch, as well as on two business (C)-focused domestic routes from Guangzhou to Beijing and Shanghai.
November 2016: News Item A-1: China Southern Airlines (GUN) reported a 3rd-quarter net profit of CNY3.3 billion/+$495 million, nearly tripled from a net income of +CNY1.2 billion in the year-ago quarter.
Operating revenue rose +1.8% to CNY32.6 billion while operating expenses fell -5.8% to CNY29.1 billion because of a -33% decrease in exchange rate losses. Industry analysts credited continuous market demand growth and lower fuel prices as main reasons for the much-improved performance.
From January to October, (GUN) posted a net income of +CNY6.4 billion, up +37.5% from a net profit of +CNY4.7 billion for the same period last year. Operating revenue was up +1.5% year-over-year to CNY86.7 billion against a -0.15% decrease in operating expenses to CNY80.5 billion.
News Item A-2: China Southern Airlines (GUN) and Baidu signed a strategic cooperation agreement at the 3rd World Internet Conference in Wuzhen, an ancient water town in Zhejiang province. The agreement covers 8 fields, such as geographic position-based mobility service, internet marketing, user research, cloud calculation and big data.
Baidu President Zhang Yaqin said the 2 sides will build a 1-stop intelligent mobility platform for users, based on their cutting-edge big data marketing and information technology.
Wang Changshun Chairman of China Southern Airlines Company (GUN), and Robin Li Chairman & (CEO) of Baidu, exchanged gifts of car and airplane models at the ceremony. Since September, (GUN) has been making efforts to promote its e-commerce platform, "China Southern E-Journey." Wang said the aim of the project is to realize 70% of all its functions through mobile phone application in 1 year and all functions in 3 years.
News Item A-3: Chinese carriers have accelerated their international expansion pace as outbound travel continues to grow.
In October, Beijing-based Air China (BEJ) experienced a +18.6% year-over-year (YOY) growth in (RPK)s on international routes. Shanghai-based China Eastern (CEA) reported a +30.4% (YOY) growth; Guangzhou-based China Southern (GUN) posted a 23.9% (YOY) growth; and Haikou-based Hainan Airlines (HNA) saw a 47.4% (YOY) growth.
Air China (BEJ) transported 11.2 million passengers on international routes in October, up +23.2% (YOY); China Eastern (CEA), 12.1 million, up +17.2% (YOY); China Southern (GUN), 11.6 million, up +19.1% (YOY); and Hainan Airlines (HNA), 18.7 million, up +57% (YOY).
In September, domestic airlines transported 4.2 million passengers on international routes, up +19.9% (YOY), which outpaced a +13% growth on domestic routes.
Hainan (HNA) opened 2x-weekly Xi'an - Sydney and Changsha - Sydney routes in September and 2x-weekly Haikou - Da Nang services in October.
China Eastern (CEA) opened 13 international routes in the (1H) and +2 European routes to St Petersburg and Madrid, in addition to boosting flight frequencies on routes to Europe and the USA.
Industry analysts point out domestic airlines still need to face severe challenges including overcapacity; shortage of slots and aviation professionals, such as pilots (FC) and Maintenance Repair & Overhaul (MRO) (MT) staff; and should focus more on profits than market shares, when they speed up their international expansion pace.
December 2016: News Item A-1: "China Southern Accelerates Market Expansion in Australia" by Katie Cantle, December 14, 2016.
China Southern Airlines (GUN) has opened new service from Guangzhou to Adelaide, Australia, to better position itself in the fast-growing Sino-Australia market after the 2 countries reached an "Open Skies" agreement earlier this month that removed all capacity limits from the China - Australia market.
This new route (a 3x-weekly Guangzhou - Adelaide Airbus A330-200 service) is (GUN)’s 6th Sino - Australia route, which include routes from Guangzhou to Sydney, Melbourne, Brisbane, and Perth, as well as Shenzhen - Sydney service.
In addition, (GUN) subsidiary, Xiamen Airlines (XIA) also opened 3 Sino - Australia routes, which include Fuzhou - Sydney, Xiamen - Sydney, and Xiamen - Melbourne.
China Southern (GUN) operates a total of 132 Sino - Australia weekly flights, making it the biggest carrier on Sino - Australia routes. Last year, (GUN) transported 866,000 passengers on Sino - Australia routes. >55% were transfer passengers, accounting for >30% share of Sino - Australia market. “(GUN)’s route network has connected with all the main cities of Australia [by opening this new route] and we have also maintained an absolute advantage in airport slots and flights connectivity,” China Southern (GUN) Group General Manager Tan Wangeng said. “In the future, we will continue to optimize the Sino - Australia route network and open more new destinations to better connect our Guangzhou hub with Australia and Europe, the USA, Japan, Korea, Middle East and Southeast Asia. Our goal is to make our Guangzhou hub the best connect point between Australia and the rest of the world.”
In 2015, passenger boardings reached 2.4 million on Sino - Australia routes, up +13.5% over 2014. It is predicted this figure will reach 3 million this year. This year, 7 Chinese carriers: Air China (BEJ), China Eastern (CEA), China Southern (GUN), Xiamen Airlines (XIA), Hainan Airlines (HNA), Sichuan Airlines (SIC) and Capital Airlines (DER) have opened about 10 Sino - Australia routes.
News Itewm A-2: China Southern Airlines (GUN) took delivery of the country's 1st Airbus A320neo aircraft (B-8545), which arrived at Guangzhou Baiyun International Airport on December 15 after a delivery ceremony in Toulouse, France on December 13.
In early 2015, China Southern signed an agreement with Dutch lessor, AerCap (DEA) for 24 A320neo aircraft. Delivery of the A320neos to China Airlines is scheduled between 2016 and 2019.
January 2017: China Southern Airlines (GUN)s’ parent China Southern Group transported 115 million passengers in 2016, up +4.8% over 2015.
The Group reported a +3.2% increase in operating revenue to CNY115.8 billion/16.7 billion and a “record high profit,” although the company did not disclose figures.
Industry analysts credited low fuel prices and continuous market demand growth as main reasons for the improvement, despite airfare declines on international routes resulting from fierce competition and fast capacity growth.
Last year, (GUN) accelerated its international expansion pace, opening new routes, including Guangzhou - Toronto, Guangzhou - Adelaide, Shenzhen - Sydney, and Shenzhen - Wuhan - Dubai. (GUN) also added 13 routes to Asian and African countries as part of China’s national “One Belt, One Road” initiative, with 940 weekly roundtrip flights, up +8.9% over 2015.
This year, (GUN) is expected to embrace a more international focus, boosting capacity +32%. According to China Southern Group General Manager Tan Wangeng, (GUN) will open Guangzhou - Vancouver - Mexico and Guangzhou - Keynes services as well as increase frequencies to SE Asia.
Separately, the Group reportedly will introduce an Information Technology (IT) company as a strategic investor and shareholder, or set up subsidiaries, although the company does not have a specific plan.
A321-211 (7506, B-8848), ex-(D-AVZO) delivery.
February 2017: News Item A-1: Guangzhou-based China Southern Airlines (GUN) has agreed to lease 5 Boeing 787-9s from Air Lease Corporation (ALE), the Los Angeles-based lessor said. The 787-9s will be powered by (GE) Aviation (GEnx) engines. Deliveries of the leased 787-9s to (GUN) will start in the 2019 1st quarter. (GUN) will receive 3 of the 787-9s in 2019 and 2 in 2020, according to (ALE).
China Southern (GUN) currently operates 10 787-8s. It announced in a Shanghai Stock Exchange filing in October 2016 that it was ordering 12 787-9s, but these orders are not yet listed by Boeing (TBC). Those deliveries are slated to start in 2018. It is not clear whether the 5 (ALE) 787-9s are considered part of those 12 787-9s or are in addition to them. (ALE) has ordered 46 787s and has so far taken delivery of 3, all (GEnx)-powered 787-9s, according to Boeing. (ALE) still has 17 787-9 orders unfilled, including 11 designated to be powered by (GEnx) engines, according to Boeing (TBC).
News Item A-2: Xiamen Airlines (XIA) has obtained approval to provide a US$5.5 million loan guarantee for Hebei Airlines (NTE) to lease a Boeing 737-800 (B-6868) from the Tianlan (Tianjin) Aircraft Leasing Company.
In a statement on the Shanghai Stock Exchange, China Southern Airlines (GUN), parent of Xiamen (XIA), said that the guarantee will help (NTE) broaden its financing channels and cut its financial and leasing costs. As of now, (XIA) has already provided 800 million yuan in loans to Hebei Airlines (NTE).
(NTE), 99.47% owned by (XIA), now operates a fleet of 12 Boeing 737s and 6 Embraer E190s.
4 A320-271neo (7269, B-8670; 7343, B-8671; 7449, B-8672), AerCap (DEA) leased and A321-211 (7558, B-8849), ex-(D-AZAX) delivery.
March 2017: News Item A-1: American Airlines (AAL) is in negotiations to buy a stake in China Southern Airlines (GUN) in an effort to strengthen both carriers’ position on Sino - USA routes.
According to news reports, (AAL) plans to buy Guangzhou-based China Southern (GUN)’s "H" shares, released by the Hong Kong Stock Exchange, via a $200 million investment. (GUN) is worth about $10 billion at market value. As a stakeholder, (AAL) would be able to nominate an observer without voting rights on to (GUN)’s board. However, industry sources said that since a final agreement had not yet been reached, specific details of the deal could still change or ultimately fail.
China Southern (GUN) suspended stock trading March 23 because it was “planning an important strategic cooperation deal.” However, (GUN) went on to say it would “reveal the important strategic cooperation deal within 5 working days and resume stock trading.” At its annual meeting in January, (GUN) said it would “focus on conducting cross shareholding with global leading players or set up a joint subsidiary with them to promote the reforms of diversifying its ownerships [required by Beijing] in 2017.”
Industry analysts pointed out both carriers could enhance their positions on the fiercely competitive Sino - (USA) routes.
“(GUN) is the largest airline in China and is the ideal carrier for (AAL), the largest airline in the world, to build a relationship within this critically important market.” (AAL) President Robert Isom added, “(GUN)’s extensive network within China touches developing and thriving markets that only a Chinese carrier can reach. We are 2 of the biggest carriers in the world, and our networks are highly complementary, with the potential to offer (GUN) and (AAL) customers an unmatched range of destinations in 2 critical markets for business (C) and leisure (Y) travelers.”
(AAL) flies to Beijing and Shanghai from Chicago O’Hare and Dallas/Fort Worth, and to Shanghai from Los Angeles.
(AAL) said the 2 carriers are expected later this year to begin code share and interline agreements. “(AAL) customers will be able to access nearly 40 destinations beyond Beijing and >30 destinations beyond Shanghai. China Southern (GUN) customers will gain access to almost 80 destinations beyond [Los Angeles], San Francisco and [New York JFK] in North and South America.” The code share routes are expected to include reciprocal loyalty program benefits, through-bag checking and the ability to book travel on a sing ticket.
According to China Merchants Securities, Beijing-based Air China (BEJ), which holds a 20% market share of Sino - (USA) routes, has a strategic cooperation deal with fellow Star (SAL) Alliance member United Airlines (UAL), which has a 22% market share. Shanghai-based China Eastern Airlines (CEA), which finalized an expanded partnership agreement with Delta Air Lines (DAL) in 2015, has a 17% market share, while SkyTeam (STM) member (DAL) has a 10% market share.
News Item A-2: China Southern Airlines (GUN) on March 19 began operating 4x-weekly on the 1,996 km route between its main base at Guangzhou (CAN) and Linzhi (LZY) in Tibet. (GUN)’s A319s will operate the service. Linzhi Airport is almost 3,000 metres above sea level and opened in 2006. Linzhi’s only other scheduled services are to Chengdu (operated by Air China (BEJ), Sichuan Airlines (SIC) and Tibet Airlines (TBZ)), while Tibet Airlines (TBZ) also serves Chongqing and Lhasa with scheduled flights.
See video: "China Southern 777-300ER Guangzhou to NY."
April 2017: News Item A-1: China's economic planner on April 13th approved China Eastern Airlines (CEA)'s 13.2-billion-yuan/US$1.92 billion plan for a base at an expansive new airport in Beijing that could eventually be the world's largest, when completed.
The National Development & Reform Commission said on its website that the base will cover 1.17 million square metres, and 30% of the investment, or 3.96 billion yuan, will be funded by (CEA). The remaining 9.24 billion yuan will be financed using domestic bank loans.
China plans to complete the 1st phase by 2019, and will be able to serve 45 million passengers a year with 4 runways on the 1st opening. 2 more phases would push the capacity to an annual count of 100 million passengers. That would put the airport as the world's largest in surface area, roughly in line with Hartsfield-Jackson Atlanta International Airport, the world's busiest by number of annual passengers.
Upon completion, rival state carrier, China Southern Airlines (GUN), will also relocate to the new airport from the existing Beijing Capital International Airport, the airport project managers told reporters last year. They said (CEA) and (GUN) will handle 40% of the new airport's footfalls.
News Item A-2: China Southern Airlines (GUN) has placed an order for 20 Airbus A350-900 aircraft in an effort to facilitate its rapid international expansion.
According to a filing released by the Shanghai Stock Exchange April 26, the deal is worth $6 billion at list prices.
The 20 A350s will be delivered between 2019 and 2022. 6 are scheduled for 2019, 6 for 2020, 4 for 2021 and 4 for 2022.
(GUN) noted the aircraft will increase capacity +12.1% in ATKs.
Airbus (EDS), which confirmed the order, said it has recorded a total of 841 firm orders for the A350 XWB from 45 customers.
May 2017: China Southern Airlines (GUN) turned in a (1Q) net profit of +CNY1.6 billion, down -42.4% (YOY) compared to net income of +CNY2.7 billion in the previous year’s 1st quarter. Operating revenue for the (1Q) jumped +10.6% (YOY) to CNY31 billion, while operating expenses increased +18.6% to CNY29.4 billion.
737-31B (27520, B-2959) last (GUN) 737-300 withdrawn from service; 737-81B (63238, B-1583), A321-211 (7652, B-8966), ex-(D-AVYK) deliveries.
July 2017: News Item A-1: Abu Dhabi-based Etihad Airways (EHD) and Guangzhou-based China Southern Airlines (GUN) have begun a new code share partnership.
Under the agreement, SkyTeam (STM) Alliance member China Southern Airlines (GUN) will put its CZ code on Etihad Airways (EHD)’s daily services from Abu Dhabi to Beijing, Shanghai Pudong, and Chengdu.
(EHD) said the new partnership increases its number of code share agreements to 53.
(EHD) Executive VP Commercial Mohammad Al Bulooki called the code share a “significant milestone in the airlines’ network development strategy and a key component of its footprint in the China market.”
Both carriers plan to implement a reciprocal loyalty partnership in the near future, enabling passengers to earn and redeem miles on each other’s flights network-wide.
News Item A-2: China Eastern Airlines (CEA) plans to allocate 150 - 200 aircraft to Beijing’s new airport in Daxing, which is expected to open in 2019. The airport has not yet been named.
(CEA) said the aircraft would be a mix of narrow bodies and wide bodies, which would operate on domestic Hong Kong, Macau and Taiwan routes and international routes to America, Europe, Australia, Japan, Korea and SE Asia. (CEA) currently has no direct intercontinental long-haul service from Beijing.
China Eastern (CEA) will invest CNY13.2 billion/$1.9 billion in its infrastructure at the new airport in an effort to enhance its position in the Beijing market. (CEA) previously said it plans to designate Beijing’s new airport as its core strategic hub for the most profitable Beijing - Shanghai route. This should increase the number of long-haul routes from Beijing and strengthen cooperations with other SkyTeam (STM) Alliance members.
(CEA) has also signed a framework cooperation agreement with the local Daxing government to cooperate in areas including (MRO), logistics, air catering and aviation media.
China Southern (GUN) has had a cooperation agreement with the Beijing government as early as 2011 to allocate 200 Airbus A330s and A380s to the new airport over the next 10 years.
China Eastern (CEA) and China Southern (GUN) are expected to build their own infrastructures at Beijing’s new airport based on their respective passenger boardings. This would account for 40% of the airport’s annual passenger volume (which is projected to be 45 million in 2020, 72 million in 2025 and 100 million in the longer term).
Air China (BEJ) and other Star (SAL) Alliance member carriers (including Hainan Airlines (HNA)) are expected to remain at Beijing Capital Airport, which has a slot shortage.
September 2017: News Item A-1: Air China (BEJ) and China Southern Airlines (GUN) were impacted by higher fuel prices in the 2017 1st half as the 2 carriers reported year-over-year (YOY) 6-month net profit decreases of -3.8% and -11.6%, respectively, to CNY3.3 billion/$486 million and CNY2.8 billion.
(BEJ)’s (1H) operating revenue rose +8.7% (YOY) to CNY58.2 billion, while operating expenses rose +15.8% to CNY47.7 billion. Fuel costs jumped +40.1% (YOY) to CNY13.6 billion during the period.
(GUN)’s (1H) operating revenue grew +11.5% (YOY) to CNY60.3 billion, while operating expenses increased +20% to CNY53 billion. Fuel costs rose +50.1% to CNY15.4 billion.
Air China (BEJ)’s passenger boardings were up +5% (YOY) to 49.2 million with an average load factor of 81% LF, up +1.2 points over the year-ago period. Passenger capacity rose +5% (YOY) to 119 billion (ASK)s, while traffic rose +6.5% (YOY) to 96.4 billion (RPK)s. Cargo traffic volume grew +4.7% (YOY) to 873,733 tonnes.
China Southern (GUN) transported 52 million passengers in the (1H), up +12% (YOY), with an average load factor of 82.3% LF, up +2.2 points. Passenger capacity increased +9.4% (YOY) to 134.5 billion (ASK)s, while passenger traffic jumped +12.5% to 110.7 billion (RPK)s. Cargo traffic volume increased +7.8% to 810,480 tonnes.
(BEJ) introduced 16 aircraft during the January - June period, comprising 1 Airbus A330-300, 4 737-800s, 8 A320 family aircraft, 2 Boeing 787-9s and 1 737-700. It phased out 11 older airplanes during the period, expanding its total fleet to 628 airplanes with an average age of 6.5 years.
(GUN) took delivery of 28 aircraft, consisting of 1 Airbus A330-300, 12 A320 family aircraft, 2 787-9s and 13 737-800s. (GUN) retired 13 older airplanes, expanding its total fleet to 717 airplanes with an average age of 6.7 years.
News Item A-2: China Southern Airlines (GUN) began 3 new westbound services on 3 consecutive days during the past month to destinations in Sri Lanka, Laos, and Russia, with the former 2 being new country markets for (GUN).
3x-weekly operations from Guangzhou (CAN) to Colombo (CMB) and from Guangzhou to Vientiane (VTE) in Laos commenced on September 26 and 27, respectively. The Guangzhou to Colombo service has been incorporated into (GUN)’s existing service from Guangzhou to Male, with the flight now operating Guangzhou to Colombo to Male to Colombo to Guangzhou.
China Southern (GUN) then launched services from Shenzhen (SZX) to Moscow Sheremetyevo (SVO) on September 28, (GUN)’s 4th non-stop route to the Russian capital airport after Guangzhou, Urumqi, and Wuhan. The latest link between China and Russia will operate 2x-weekly (Mondays and Thursdays), with flights performed by a mixture of (GUN)’s A330-200s and A330-300s.
Guangzhou to Colombo will be operated by (GUN)’s A330-300s, while Vientiane is scheduled to be flown by a mixture of (GUN)’s 737s and A320s. There is existing competition on the Guangzhou to Colombo route from SriLankan Airlines (SRI) which already provides a daily service. On the link between Guangzhou and Vientiane, (GUN) will be competing with Lao Airlines which operates the route 3x-weekly. There is no competition on the Shenzhen to Moscow Sheremetyevo airport pair. The average sector length of the 3 new routes is 4,118 km.
News Item A-3: China Southern Airlines (GUN) has established a branch company in Sichuan an effort to enhance its position in the fast-growing West China market. “With the establishment of our Sichuan Branch company, we will launch Air Express of Beijing to Chengdu, Guangzhou to Chengdu and Shenzhen to Chengdu [services] and add more domestic routes from Chengdu, including services to Lhasa. In addition, we [plan to] open international routes starting from Chengdu at a proper time,” China Southern Sichuan Branch Company General Manager He Xiaojing said.
As early as 1995, (GUN) set up a sales office in Chengdu, the Sichuan province capital, and opened 4 routes from Chengdu to Guangzhou, Zhengzhou, Shenzhen and Wuhan. As of August 2017, (GUN) operated 29 domestic routes from Chengdu.
7 other Chinese carriers: — comprising Air China (BEJ), China Eastern (CEA), Chengdu Airlines (UEG), Tibet Air (TBZ), Lucky Air (LKY), Shenzhen Airlines (SHZ) and Sichuan Airlines (SIC) have also opened branch companies in Sichuan.
Air China (BEJ) and Lhasa-based Tibet Air (TBZ) take up a 32% share of the Chengdu market in terms of capacity allocation, followed by Sichuan Airlines (SIC) and China Eastern (CEA) that have a 19% and 13% share, respectively. (GUN) has a 9% share of the Chengdu market.
As the 4th biggest airport in terms of passenger throughput, Chengdu Airport has experienced rapid growth in recent years. The airport’s passenger throughput increased 8.7% to 33 million for the 1st 8 months of this year and it is predicted the figure will reach >50 million in the full-year 2017. The airport’s aircraft movements rose 5.9% to 222,400.
October 2017: News Item A-1: "China Southern to Assign 250 Airplanes to Beijing’s New Airport by 2025" by Katie Cantle (ATW) Plus, October 11, 2017.
China Southern Airlines (GUN) plans to assign 250 airplanes to Beijing’s new airport to operate more 900 daily flights by 2025 in an effort to enhance its position in the Beijing market.
As early as 2011, (GUN) signed a cooperation agreement with the Beijing government to allocate 200 aircraft (Airbus A330s and A380s) to the airport over the next 10 years.
The new airport (which broke ground earlier this week and is scheduled to open in 2019) is projected to handle 45 million passengers in 2020, 72 million in 2025, and 100 million in the longer term.
China Southern (GUN) expects to invest CNY14.8 billion/$2.3 billion in the new 1.09 million sq m Beijing airport.
The company has mapped out 3 development phases for the new base:
* Phase 1 will gradually transfer (GUN)’s operation from current Terminal 2 of Beijing capital airport to the new airport by 2019;
* Phase 2 will build a domestic and international route network between 2020 and 2025; and
* Phase 3 will broaden its domestic and international route network by a big margin and boost flight frequencies between 2026 and 2030.
(GUN) established a Beijing branch company in 2005. So far, (GUN) has allocated 70 aircraft, including its 5 Airbus A380s for the Beijing market on 52 domestic and international routes with >240 daily flights. 10 Chinese carriers are committed with moving to Beijing’s new airport. Shanghai-based China Eastern Airlines (CEA) also plans to assign 150 to 200 aircraft to Beijing’s new airport.
News Item A-2: China Southern Airlines (GUN) has placed an order for 8 Boeing 777-300ERs and 30 737-800s in an effort to facilitate its expansion at Beijing’s new airport, which is scheduled to open in 2019. The deal, which is worth $5.7 billion at list prices, is contingent on regulatory approval. These airplanes are scheduled to be delivered between 2019 and 2020; 5 777-300ERs and 12 737-800s will be delivered in 2019 and the rest will be delivered in 2020.
November 2017: 5 737-800 (CFM56-7) (63230, B-1407; 63235, B-1208; 63245, B-1206; 63249, B-1201; 63250, B-1402), and 2 A330-343E (1821, B-8365; 1826, B-8366), ex-(F-WWKP & F-WWYX) deliveries.
December 2017: News Item A-1: The UK and China have announced a major expansion of air connections between the 2 nations. The new agreement, announced this month, will increase by around +50% the number of flights allowed between the countries. Notably, the agreement allows for considerable growth in Chinese routes from UK regional airports, not just London. In 2016, the 1st services from a UK regional airport to China were launched by Manchester Airport, in NW England.
The announcement builds on an October 2016 agreement that saw limits on passenger flights between the 2 countries raised from 40 per week from each country to a maximum of 100. That figure will increase to 150 under the latest deal.
The rapidly increasing number of Chinese tourists visiting other countries makes the new traffic agreement potentially lucrative for the UK. Between January and June 2017, 115,000 Chinese visitors arrived in the UK, a rise of +47% on the same period in 2016. Chinese tourists are some of the UK’s highest spenders, staying longer and traveling more than visitors from other countries. Spending by them over the January to June period rose 54%, to £231 million/$310 million.
“These agreements are an important part of preparing Britain for a post-Brexit world and making sure we have access to key markets in the Far East,” UK Transport Secretary Chris Grayling said.
In 2016, restrictions were also relaxed on freight services between the 2 countries, allowing an unlimited number of cargo flights to operate. By the end of 2016, >74,000 tonnes of freight had been transported between the UK and China by air, a rise of +27% compared to 2015.
January 2018: News Item A-1: China’s big 3 carriers: China Southern (GUN), China Eastern (CEA) and Air China (BEJ) each reported passenger boardings of >100 million in 2017 as market demand continued to grow.
Last year, (GUN) transported 126 million passengers, up +10.2% over 2016. Domestic passengers were up +10.3% to 109 million and international passengers jumped +11.1% to 15.4 million. (GUN) carried 2.3 million passengers on regional routes (Hong Kong, Macau and Taiwan). Average passenger load factor was up +1.7 points to 82.2% LF.
China Eastern (CEA) transported 111 million passengers last year, up +9% over 2016. Domestic passengers were up +10% year-over-year (YOY) to 92.6 million. International passengers increased 2.4% to 14.7 million. (CEA) carried 3.5 million passengers on regional routes (Hong Kong, Macau and Taiwan). Average passenger load factor decreased 0.17 point to 81.1% LF.
Air China (BEJ) transported 101.6 million passengers last year, up +5.1% over 2016. Domestic passengers were up +6% to 83.5 million on domestic routes and 13.5 million on international routes, up +2%. Air China carried 4.6 million passengers on regional routes (Hong Kong, Macau and Taiwan). (BEJ)’s average passenger load factor increased 0.4 point to 81.1% LF.
Hainan Airlines (HNA) also experienced large growth last year. (HNA) transported a total of 71.7 million passengers in 2017, up +52.5% over 2016. (HNA) carried 67.4 million domestic passengers, up +51.7%; international passengers jumped +75.3% to 4 million. (HNA) carried 289,700 passengers on regional routes (Hong Kong, Macau and Taiwan). Average passenger load factor dropped -=1.8 points to 86.1% LF.
Chinese carriers transported a total of 7.1 million tonnes of cargo in 2017, up +5.7% (YOY). The airlines carried 4.8 million tonnes on domestic routes, up +2% (YOY) and 2.2 million tonnes, up +15% (YOY), on international routes.
February 2018: News Item A-1: China Southern Airlines (GUN) plans to cooperate with Boeing (TBC) to establish a 737NG passenger-to-freighter (P2F) conversion production line in Guangzhou, China. According to a deal signed February 2 between (GUN) and (TBC), in addition to the airplane conversion production line, the 2 companies will launch several partner programs.
News Item A-2: A321-271 (7530, B-8367) AerCap (DEA) leased.
March 2018: News Item A-1: China Southern Airlines (GUN) has taken delivery of its 1st A321neo and 1st in service in China. (GUN) currently operates 303 Airbus aircraft including 253 A320 Family aircraft (including 7 A320neos), 45 A330 Family aircraft and 5 A380s.
Powered by Pratt & Whitney (PRW) Geared Turbofan engines, (GUN)'s A321neo aircraft features a comfortable 3-class cabin layout, (4C business, 24PY premium economy and 167Y economy class seats). (GUN) will operate the new aircraft on its domestic and international routes.
The A320neo Family incorporates the very latest technologies including new generation engines and Sharklets, which together deliver >15% fuel savings at entry into service and up to 20% by 2020. With >6,000 orders received from >90 customers since its launch in 2010, the A320neo Family has captured some 60% market share.
News Item A-2: China Southern Airlines (GUN) has set up a branch company in the SW Chinese province Yunnan, a stronghold of rival China Eastern Airlines (CEA).
8 new (GUN) domestic routes from Yunnan will be opened in March and a service to Islamabad, Pakistan, from provincial capital Kunming will begin in June. These moves by (GUN) support a government policy to use Yunnan as a hub through which to connect with the economies of neighboring countries in S and SE Asia.
The branch company was established in Kunming March 6. Branch companies are treated by authorities preferentially in the allocation of service rights and runway slots. Yunnan is also growing strongly as a domestic market for air transportation, because of its tourism attractions.
(GUN) has not said what aircraft it will assign to the branch.
In 2005, China Eastern (CEA) acquired Yunnan Airlines (YUN), giving it a stronger presence in the region. It now operates under the name China Eastern Yunnan Airlines (YUN).
News Item A-3: China Southern (GUN) subsidiary XiamenAir (XIA) has ordered 30 Boeing 737 MAX family airplanes, comprising 20 737 MAX 8s and 10 737 MAX 10s, according to a filing released through the Shanghai Stock Exchange. The order is worth $3.24 billion at list prices.
Deliveries will be from 2019 to 2022 (5 737 MAX 8s in 2019; 7 737 MAX 8s in 2020; 8 737 MAX 8s and 7 737 MAX 10s in 2021; and 3 737 MAX 10s in 2022.
China Southern (GUN) said the airplanes will increase capacity by +3.74% for the China Southern Group, which comprises China Southern (GUN) and (XIA).
(XIA), which currently operates 195 airplanes, plans to grow its fleet to >200 airplanes (and expand its wide body airplanes to 18) in 2018.
News Item A-4: 737-800 (63259, B-1236; 787-9 (63978, B-1242) deliveries.
May 2018: News Item A-1: "China Eastern, China Southern to Benefit from New (CAAC) Policies" by Katie Cantle, ATWOnline, May 18, 2018.
China Eastern Airlines (CEA) and China Southern Airlines (GUN), which have been designated as main operators at Beijing’s new airport (are expected to benefit from the Civil Aviation Administration of China’s (CAAC) (CAC) new policies on international operations and Beijing’s “1 city, 2 airports” rules, which are scheduled to take effect on October 1. Beijing’s new airport is scheduled to open in 2019.
The new policies governing international services allow main airport operators to apply for more routes to America, Europe (excluding Russia), Oceania and Africa. The (CAAC) is gradually abandoning an old practice that “1 intercontinental route can only be operated by 1 domestic carrier” to encourage competition to maximize public interest.
In addition, the Beijing Capital Airport and the yet-to-be opened Beijing’s new airport will be considered 1 destination, which means an international route originating from either airport will be regarded as the same route based on Beijing’s “1 city 2 airports” international air traffic rights allocation policy.
If domestic carriers want to apply as a new operator, the (CAAC) noted it would make a comprehensive evaluation based on 4 indexes: consumer interests, hub development, resource utilization efficiency and operation quality.
Local industry analysts point out SkyTeam (STM) Alliance members China Eastern (CEA) and China Southern (GUN) will take advantage of the new international policies despite the fact there is little room for adding more new services in the Sino - USA market in the short term because of a saturation of air traffic rights.
(GUN) previously said it would plan to fly between Beijing and London Heathrow (LHR) once Beijing’s new airport is open next year. So far, Air China (BEJ) is the only Chinese carrier that operates a Beijing to London route with 2x-daily flights; British Airways (BAB) operates this service with 1x-daily flight.
(CEA) Chairman Liu Shaoyong in March said Beijing’s new airport should be given priority when distributing international slots to open routes to developed countries.
In addition, the (CAAC) said SkyTeam (STM) Alliance member carriers that are designated to move to the new airport, will transfer their current international routes operated from Beijing Capital Airport within 4 years after the new airport opens. Currently (GUN) operates only 1 direct intercontinental service between Beijing and Amsterdam; (CEA) has no direct intercontinental service from Beijing.
Chinese carriers have seen a rapid growth of international demand in recent months, although yield is declining on some international routes, especially on USA and Australia services, which are experiencing overcapacity.
According to the (CAAC), Chinese airlines carried 50.7 million passengers in April, up +15.3% from the year-ago period when international passenger boardings jumped +25.1% and maintained >20% growth rate for 2 consecutive months.
Domestic carriers also transported 605,000 tonnes of goods last month; cargo traffic volume on international routes rose +11.6% year-over-year.
News Item A-2: "China Southern Airlines Traffic up +9.8% in 1st Quarter 2018; 2017 Marks 1st Year of Double-digit Passenger Growth Since 2010; Shenzhen Expanding Fast" by http://www.anna.aero.com Airline Analysis, May 31, 2018.
China Southern Airlines (GUN) is China’s largest carrier, and overall it is the 6th biggest airline in the world with regards to seat capacity. Offering 120.72 million one-way seats in 2017, it sits just behind Ryanair (RYR) (135.24 million one-way seats in 2017), but ahead of China Eastern Airlines (CEA) (115.22 million) in the global rankings. As an airline, (GUN) is currently operating 542 commercial airplanes (includes units leased to other operators), but with >280 still on the order books, (GUN) is certainly staying in expansion mode. Since 2008, (GUN) has increased its annual traffic by +117%, growing from 58.24 million passengers a decade ago to 126.30 million last year, and (GUN)’s latest statistics show that the growth rate is not only being maintained, but is starting to accelerate.
* Traffic up in 1st quarter (Q1).
Between January and March, China Southern Airlines (GUN) flew 33.25 million passengers, up +9.8% versus the 30.29 million that it flew during the same quarter of 2017. Last year, (GUN), the SkyTeam (STM) member flew 126.30 million people, representing an increase in traffic, when compared to 2016, of >10%. That means 2017 was the 1st year since 2010 in which (GUN) has posted a double-digit growth in passenger numbers. If (GUN) is able to maintain its +9.8% growth rate from (Q1) for the remainder of 2018, then (GUN) can expect to carry around 138.68 million passengers for the calendar year.
Breaking down last year’s data into geographic categories, it was the domestic sector which welcomed the most traffic, with 86% of customers (108.62 million) flying on inter-Chinese flights in 2017. The remaining 14% of passengers (17.68 million) flew internationally with (GUN), with this also taking into account flights to Hong Kong, Macau and Taiwan. Last year, domestic passenger traffic grew by >+10%, while the international market advanced at a rate of +9.5% when compared to the totals of 2016. For (Q1) 2018, domestic traffic rose by +9.4%, whereas the international sector encountered +12% growth.
* Guangzhou operation 2x- as big as Beijing.
Guangzhou is by far (GUN)’s leading hub, with it operating 39.76 million seats to and from the airport serving the capital of Guangdong Province in 2018. (GUN) has increased its seat capacity output at Guangzhou by +3.8% this year when compared to 2017, with it growing faster than (GUN)’s 2nd largest hub in Beijing. Despite the capacity limitations at China’s leading airport, (GUN) has still managed to increase its seat offering there by +3.5% this year. While both of these airports are still way out in front, in terms of operational size, with regards to growth they were the worst performing of all those in the top 12. The best airport was (GUN)’s 8th largest hub ( Shenyang) with its seat capacity growing by >13% at the airport serving the capital of Liaoning Province.
While Shenyang is reporting the best capacity increase this year in terms of percentage growth, Shenzhen is the leading airport within the top 12 pack in regards to net seat expansion. (GUN)’s 3rd largest hub will see +1.64 million additional seats in 2018, with the 2nd best airport for net growth being (GUN)’s leading hub (Guangzhou) where 1.64 million seats are being added.
Outside of (GUN)’s top 12, many other airports are seeing sound rises in seat capacity, including: Guiyang (13th largest airport; +6.5% rise in seat capacity in 2018); Xi’an (14th; +4.0%); Changchun (15th; +11%); Haikou (16th; +1.1%); Shanghai Hongqiao (17th; +5.8%); Kunming (18th; +7.8%); Sanya (19th; +2.8%); and Chongqing (20th; +6.9%).
* Good Morning, Vietnam!
The Vietnamese market appears to be a key focus for (GUN) in 2018, with it increasing its seat capacity to that nation by +26% this year. As a result of this, Vietnam has overtaken Australia to become (GUN)’s 4th biggest international market, with it now very close in size to the Japan market. This summer, (GUN) is offering schedule service to 5 destinations in Vietnam on a total of 11 routes. This compares to 4 destinations and 8 routes in summer 2017. The new destination which joined the network was Da Nang, with (GUN) connecting to the coastal city from Beihai on November 22, 2017, a route that originates in Zhengzhou. As of June 1 (GUN) will also connect to the city from its leading hub at Guangzhou. Along with these services, (GUN) has also introduced a scheduled connection between Shenzhen and Hanoi during the past 12 months, adding to its existing Guangzhou and Changsha routes from the North Vietnam airport.
2 737-800s (63260, B-1239; 63262, B-1241), 787-9 (63979, B-1243), deliveries and 2 A321-271neos (PW) (7544, B-8368; 7548, B-8369), AerCap (DEA) leased.
June 2018: News Item A-1: China Southern Airlines (GUN) began 2 new routes in quick succession launching services from Wuhan (WUH) to London Heathrow (LHR) on May 30, followed by flights from Guangzhou (CAN) to Da Nang (DAD) on June 1. The 8,867 km Wuhan to Heathrow service will be flown 3x-weekly using (GUN)’s A330-200s, with no direct competition being provided.
(GUN) already operates into (LHR) from Guangzhou and, in addition to the new Wuhan route it will add a further connection to the London hub in July when it introduces a 2x-weekly service from Sanya. The 975 km Asian link between Guangzhou and Da Nang will be operated daily by (GUN)’s mixed fleet of 737s. This route faces incumbent competition in the form of Vietnam Airlines (VIE) (3x-weekly) and Hainan Airlines (HNA) (2x-weekly).
July 2018: China Southern Airlines (GUN) continued its international expansion with 3 new routes: Guangzhou (CAN) to Rome Fiumicino (FCO) 3x-weekly, commencing July 13; Sanya (SYX) to London Heathrow (LHR) 2x-weekly on Thursdays and Sundays from July 12; and Shenzhen (SZX) to Singapore (SIN) flown on a daily basis from July 13.
These city pairs are currently operated year round using (GUN) the SkyTeam (STM) carrier’s 787, A330-200 and A321 fleets, respectively.
There are no incumbent carriers on the Fiumicino and (LHR) routes. However, 3 competitors exist on the Shenzhen to Singapore route: Scoot (SCT), operating 5x-weekly, Shenzhen Airlines (SHZ) with a 2x-daily service and SilkAir (SLK) with a daily service.
August 2018: "China Southern Receives its 1st 787-9 with 3-class Layout" by Chen Chuanren (ATWOnline) (Chuanren@purplelightvisuals.com)
August 27, 2018.
China Southern Airlines (GUN) received its 1st 3-class Boeing 787-9 Dreamliner on August 24. 787-9 (B-1169), is the 6th 787-9 to enter (GUN)’s fleet, and seats 28C passengers in business-class, 28PY in premium economy and 220Y in economy. Previous 5 787-9s have been configured in a 2-class layout, with 28C in business and 269Y in economy.
(GUN) will receive 7 more 787-9s in the 3-class configuration. The 787-9s delivered to-date are plying domestic routes between Guangzhou and Shanghai before transiting to international routes.
New to (GUN)’s Dreamliner product ((GUN) also flies 787-8s), the new 787-9’s premium economy (PY) seats are arranged in a 2-3-2 layout, with 38-inch legroom, a 7-inch recline and a 13-inch (LCD) screen at each location. Premium economy (PY) is also available on (GUN)’s Boeing 777s, Airbus A330s and A380s.
(GUN) took delivery of its 1st 787-9 May 4, and has +14 more on order, including 8 on lease from Air Lease Corporation (ALE) and (BOC) Aviation (SIL).
October 2018: AerCap (DEA) took delivery of its 1st Boeing 737 MAX 8 and leased it to China Southern Airlines (GUN).
Click below for photos:
GUN-737-700 - 2015-04.jpg
GUN-737-800 - 2012-06
GUN-777-21BER - 2014-12
GUN-777-300ER - 2014-08
GUN-777-F1B 820-37312 B-2075 - 2016-10.jpg
GUN-777F - 2015-08.jpg
GUN-787 - 2015-06.jpg
GUN-787 1ST - 2013-06
GUN-787 B-2725 LHR 2018-09.jpg
GUN-787-8 - 2016-12.jpg
GUN-A319 - 2004-09
GUN-A320 - 2015-08-Skyteam Livery.jpg
GUN-A320neo - 2016-07.jpg
GUN-A321neo 1st 2018-03.jpg
GUN-A330-300 - 2012-10
GUN-A350-900 - 2017-04.jpg
GUN-A380 - 1ST 2011-10
GUN-A380 - 2013-11
GUN-A380 - 2017-01.jpg
GUN-A380-841 - 2012-05
0 737-3L9 (CFM56-3) (1815-24571, /90), EX-(MRS), (TOM) LEASED 2000-06. RETURNED.
0 737-3Q8 (CFM56-3B1) (2523-27271, /93 B-2920; 2528-27286, /93 B-2921), LEASED TO (WUH), 148Y.
0 737-3Y9 (CFM56-3C1) (2405-25604, /92 B-2994), (DEA) LEASED 1993-01. LEASED TO (WUH). RETURNED. 145Y.
0 737-3YO (CFM56-3B1) (2089-25172, /91 B-2526; 2097-25173, /91 B-2527; 2168-25174, /91 B-2528; X306-26068, /92 B-2529; 2456-26082, /93 B-2909; 2459-26083, /93 B-2910; 2460-26084, /93 B-2911), (GEH) LEASED, 3 LEASED TO (SHT), 3 LEASED TO (ZHU). 25173; TO (CPZ) FOR CONVERSION TO FREIGHTER. 8C, 130Y.
00 737-31B (CFM56-3B1) (2499-25895, /93 B-2582; 2554-25897, /93 B-2583; 2437-27151, /93 B-2596; 2555-27272, /93 B-2922; 2565-27275, /93 B-2923; 2575-27287, /94 B-2924; 2593-27289, /94 B-2926; 2595-27290, /94 B-2927; 2619-27343, /94 B-2929; 2622-27344, /94 B-2941; 2678-27519, /94 B-2952), 3 LEASED TO (GIZ), 1 LEASED TO (HNA), 4 LEASED TO (ZHO), 4 LEASED TO (WUH). 148Y.
0 737-31L (CFM56-3B1) (2556-27273, /93 B-2930; 2567-27276, /93 B-2931), 27276; OPERATES FOR (XIJ) 2004-11. 144Y.
0 737-341QC (CFM56-3B2) (1645-24276, /88 B-5046 2004-02; 1658-24277, /88 B-5071 2004-03; 1660-24278, /88 B-5047 2003-12; 1673-24279, /89 B-5072 2004-03), (GEH) LEASED, CONVERTED BY (PEMCO), JOINT OPERATIONS WITH CHINA POSTAL AIRLINES (CPZ). FREIGHTER.
0 737-37K (CFM56-3C1) (2547-27283, /94 B-2935; 2609-27335, /94 B-2936; 2655-27375, /94 B-2946; 3100-29407, /99 B-2574; 3104-29408, /99 B-2575), EX-(ZHO) 2002-01. 8C, 130Y.
0 737-5YO (CFM56-3B1) (1960-24696, /91 B-2541), (TCI) LEASED 1991-02. RETURNED. 132Y.
0 737-5YO (CFM56-3B1) (2079-24898, /91 B-2543), (BBB) LEASED 1991-07. RETURNED. 132Y.
0 737-5YO (CFM56-3B1) (2003-24897, /91 B-2542; 2093-24899, /91 B-2544; 2095-24900, /91 B-2545; 2150-25175, /91 B-2546; 2155-25176, /91 B-2547; 2211-25182, /92 B-2548; 2218-25183, /92 B-2549; 2238-25188, /92 B-2550; 2538-26100, /93 B-2912; 2544-26101, /93 B-2915), 4 LEASED TO (GUX), 2 LEASED TO (HNA), 6 LEASED TO CHANGSHA. 24897; 24899; 24900; RETURNED, LEASED TO (ARG) 2005-03. 25176; RETURNED, LEASED TO (ARG) 2006-02. (GEF) LEASED. RETURNED. 132Y.
2 737-7K9 (CFM56-7B20) (909-30041, /01 B-2162; 931-30042, /01 B-2163), (XIJ) OPERATES 2004-11. EX-(N341TR & N342TR). 24PY, 119Y.
16 737-71B (CFM56-7B) (1430-32933, /04 B-5068; 1465-32934, /04 B-5069; 1507-32935, /04 B-5070; 1531-32936, /04 B-2169; 1569-32937, /04 B-2620; 1603-32938, /04 B-2622; 1607-32939, /04 B-2916; 1624-32940, /04 B-2917; 2077-35361, B-5233, 2006-10; 2066-35363, B-5238, 2006-10; 2980-35377, B-5247, 2009-07; 35382, B-5252, 2009-09; 35383, B-5253; 3922-38917, B-5285, 2012-02; 38925, B-5290, 2012-07; 38962, B-5291, 2012-07). 8C, 24PY, 88Y.
10 737-71B (CFM56-7B24) (1872-29366, B-5221, 2006-02; 1896-29367, B-5222, 2006-03; 2137-29370, B-5235, 2006-12; 2064-29371, B-5230, 2006-10; 2131-29372, B-5237, 2006-12; 2051-35360, B-5232, 2006-09; 2156-35364, B-5239, 2007-01; 2264-35368, B-5240, 2007-05; 2346-35378, B-5250, 2007-08; 2446-35384, B-5251, (2007-12), (ILF) LEASED. 8C, 24PY, 88Y.
2 737-76N (CFM56-7B20) (994-32583, /01 B-2698, 1028-32596, /01 B-2699), (GEF) LEASED 2001-12. (XIJ) OPERATIONS 2004-11. 8C, 24PY, 88PY.
1 737-8K5 (CFM56-7B27) (804-30783, /01 B-5155), EX-(HAP), (TOM) LEASED 2006-04. 8C, 24PY, 132Y.
10 ORDERS (2014-02) 737-800 (CFM56-7B), (GEF) LEASED. WITH WINGLETS. 8C, 24PY, 132Y:
57 737-81B (CFM56-7B26) (1187-32921, /02 B-2693; 1199-32922, /02 B-2694; 1213-32923, /02 B-2695; 1230-32924, /02 B-2696; 1250-32925, /02 B-2697; 1268-32926, /03 B-5020; 1290-32927, /03 B-5021; 1323-32928, /03 B-5022; 1348-32929, /03 B-5040; 1355-32930, /03 B-5041; 1362-32931, /03 B-5042; 1395-32932, /03 B-5067; 1784-34250, /05 B-5113; 1806-34248, /05 B-5112; 1915-30697, /06 B-5147; 1933-30699, /06 B-5149; 1961-30709, /06 B-5165; 1983-33006, B-5166, 2006-07; 2087-30708, /06 B-5163; 2191-35365, /07 B-5189; 2223-35366, B-5190, 2007-03; 2237-35367, /07 B-5191; 2272-35369, /07 B-5192; 2299-35370, /07 B-5193; 2302-35371, /07 B-5195; 2314-35375, /07 B-5300; 2329-35376, /07 B-5310; 2372-35380, /07 B-5339; 2402-35381, /07 B-5340; 2486-35385, /08 B-5356; 2881-35373, /09 B-5421; 2940-35374, /09 B-5420; 2957-35379, B-5419, 2009-07; 3068-35386, /09 B-5468; 35387, /09 B-5469; 3144-35389, /10 B-5446; 3154-35388, /10 B-5445; 38916, /12 B-5642; 38936, /13 B-5715; 38937, /13 B-5716; 38947, /13 B-5743; 38948, /13 B-5745; 38953, /13 B-5746; 38961, /13 B-5747; 38963, /11 B-5609; 41326, /15 B-1736; 41606, /15 B-1737; 41609, B-1776, 2015-05; 41610, B-1780, 2015-05; 63230, B-1407, 2017-11; 63235, B-1208, 2017-11 ;63238, B-1583, 2017-05; 63245, B-1206, 2017-11; 63249, B-1201, 2017-11; 63250, B-1402, 2017-11; 63259, B-1236, 2018-03). 1 WET-LEASED TO (GIZ) 2003-09. 8C, 24PY, 132Y.
1 737-81B (CFM56-7B26) (41328, B-1748), (ALE) LEASED 2015-03. 8C, 24PY, 132Y.
1 737-81B (CFM56-7B26) (43891, B-7970), (ICBC) LEASING LEASED, EX-(D-AYAG) 2016-08. 8C, 24PY, 132Y.
4 737-83N (CFM56-7B27) (1024-32580, /06 B-5120; 1059-32609, /06 B-5121; 1110-32610, /O6 B-5122; 1135-32611, /06 B-5123), (GEF) LEASED. 8C, 27PY, 124Y.
4 +2 ORDERS 737-86N (CFM56-7B26) (34248, B-5112; 1851-34252, B-5133, 2006-01; 41252, B-1979, 2014-08; 43404, B-1781, 2015-05), (GEF) LEASED, FOR (XIA) OPERATIONS. 8C, 159Y.
30 ORDERS (2019-02) 737-800 TO BE BASED AT THE NEW BEIJING AIRPORT WHICH OPENS IN 2019:
30 ORDERS 737NG (CFM56-7B):
6 +445 ORDERS 737 MAX (6625-63249, B-1201).
0 747-47UF (CF6-50) (1169-29253, N492MC), (TLS) WET-LEASED 2000-04 FOR 1 YEAR. WET-LEASED 2002-11. RETURNED.
2 747-41BF (SCD) (PW4062) (1306-32803, /02 B-2473; 1312-32804, /02 B-2461), LEASED. FREIGHTER.
2 757-2YO (RB211-535E4) (482-26153, /92 B-2831; 503-26156, /92 B-2827), EX-(XIN). (GEF) LEASED. 8C, 196Y.
27 757-21BER (RB211-535E4) (144-24014, /87 B-2801; 148-24015, /87 B-2802; 150-24016, /87 B-2803; 200-24330, /88 B-2804; 203-24331, /88 B-2805; 232-24401, /89 B-2806; 233-24402, /89 B-2807; 262-24714, /90 B-2811; 288-24774, /90 B-2815; 359-25083, /91 B-2816; 389-25258, /91 B-2817; 392-25259, /91 B-2818; 461-25884, /92 B-2822; 575-25888, /93 B-2823; 585-25889, /93 B-2825), 3 LEASED TO (HNA), 2 LEASED TO (SHZ), 1 LEASED TO (ZHU), 3 LEASED TO (WUH), 2 WET-LEASED TO (ANE) 2000-05. 24401 (PSS) LEASED. 14 (ETOPS), 8C, 30PY, 154Y.
1 757-236 (RB211-535E4) (445-25598, /92 B-2835), 8C, 192Y.
2 757-236 (RB211-535E4) (873-29945, /99 B-2860; 877-29946, /99 B-2861), (PEB) LEASED 2004-06. RETURNED. 8C, 192Y.
3 757-28S (RB211-535E4) (797-29215; /98 B-2851; 811-29216, /98 B-2853; 818-29217, /99 B-2859). NOT (ETOPS). (XIJ) OPERATIONS 2004-11. 8F, 192Y.
3 757-28S (RB211-535E4) (961-32341, /01 B-2812; 966-32342, /01 B-2813; 1015-322343, /02 B-2830), 8C, 23PY, 166Y.
0 777-21B (GE90-85B) (20-27357, /95 B-2051; 24-27358, /96 B-2052; 46-27359, /96 B-2053; 48-27360, /96 B-2054), 27357; 27360; LEASED TO (BNG) UNTIL 2000-04 FOR HADJ. 27360; WET-LEASED TO (GIA) 2009-11 FOR HAJJ FLIGHTS. 18F, 40PY, 316Y.
0 777-21BER IGW (GE90-92B) (55-27524, /97 B-2055; 66-27525 /97 B-2056; 106-27604, /98 B-2057 "PEARL OF THE SOUTH;" 110-27605, /98, B-2058; 121-27606*, /98 B-2062; 472-32703*, /04 B-2070). +2 ORDERS. *27606; 32703; RETURNED TO ALAFCO (ALV) & LEASED TO NORDWIND AIRLINES (NWD) 2013-02. 24F, 53C, 207Y.
12 777-F1B (GE90-110B1) (760-37309, /09 B-2071; 770-37310, /09 B-2072; 811-37311, /09 B-2073; 820-37312, /09 B-2075, - - SEE PHOTO - - "GUN-747F-2009-03;" 888-37313, /10 B-2081; 41637, B-2028, 2015-01; B-2028, 2015-07), FREIGHTER.
4 +6 ORDERS 777-31BER (43221, B-2007, 2014-08; 43222, B-2008, 2014-08; B-2009, 2014-08 - SEE PHOTO - - "GUN-777-300ER - 2014-08;" 43228, B-7588), 4F, 34C, 44 PY, 227Y (ECONOMY 3-3-3 CONFIGURATION, 32 INCH SEAT PITCH):
8 ORDERS (2019-02) 777-300ER TO BE BASED AT THE NEW BEIJING AIRPORT WHICH OPENS IN 2019.
10 787-81B DREAMLINER (GEnx-1B64) (34924, /13 B-2726; 43-34925, /12 B-2727 - - SEE PHOTO - - "GUN-2012-11 - 1ST 787;" B-2732; 34927, /13 B-2733; 34928, /13 B-2737; 34930, /13 B-2736; 38494, /13 B-5759; 38950, /13 B-5782; 38957, /13 B-5780; 38958, /13 B-5781), INCLUDING 6 FOR (XIA). 4F, 24C, 200Y.
6 +7 ORDERS 787-9 (GEnx) (B-1169 (6TH) 2018-08); 63978, B-1242 (1 OF 1ST 5)); INCLUDING 5 (ALE) LEASED, 3 (BOC) AVIATION (SIL). 6TH & 7 LATER 787-9S IN 28C, 28PY, 220Y (3 CLASS CONFIGURATION), 1ST 5 IN 28C, 269Y (2 CLASS).
11 MD-82 (JT8D-217A/217C) (1240-49425, /85 B2104; 1241-49428, /85 B-2105; 1300-49502, /88 B-2108; 1381-49505, /88 B-2121; 1400-49506, /89 B-2122; 1514-49510, /89 B-2126; 1548-49512, /89 B-2128; 1589-49514, /90 B-2130; 1622-49516, /90 B-2132; 1647-49518, /90 B-2134; 1671-49520, /91 B-2136; 1724-49523, /91 B-2139; 1746-49524, /91 B-2140; 1798-49850, /92 B-2142; 1807-49851, /92 B-2150; 1959-49852, /93 B-2151; 1981-49853, /94 B-2145; 2010-53162, /92 B-2146; 2025-53163, /92 B-2147; 2041-53164, /92 B-2152; 2063-53169, /93 B-2148; 2065-53170, /93 B-212149; 2067-53171, /93 B-2150), (POL) LEASED, 3 FROM (CNS) 1999-03, 7 SOLD. 49852 TO (XIN) 2005-01. (SHY) OPERATIONS 2004-11. 12 GROUNDED WFU 2008-11. 12F, 133Y.
6 MD-90-30 (V2525-A5) (2143-53523, /96 B-2250; 2146-53524, /96 B-2251; 2150-53525, /96 B-2252; 2170-53526, /97 B-2253; 2175-53527, /97 B-2254; 2177-53528, /97 B-2254; 2220-53529, /98 B-2255; 2222-53530, /98 B-2260; 2228-53531, /98 B-2261; 2253-53532, /99 B-2266; 2258-53533, /99 B-2267), 3 OPERATIONS BY (CNS). OTHERS OPERATIONS BY (SHY). 53523; 53526; ST (DAL). 12F, 145Y.
2 MD-90-30 (V2525-A5) (4001-60001, /00 B-2100; 4002-60002, /00 B-2103), 2000-08 CHINA MANUFACTURED. (SHY) OPERATIONS 2004-11. 12F, 145Y.
0 A300B4-622R (PW4158) (733, /94 B-2315; 734, /94 B-2316; 739, /94 B-2323; 750, /95 B-2327; 756, /95 B-2328; 762, /95 B-2329), 739; 750; 756; 762; OPERATES FOR (SHY) 2004-11. TO BE CONVERTED TO FREIGHTER BY 2007-11. 6 AIRPLANES SOLD TO TIGRIS INTERNATIONAL (TGS), NETHERLANDS ANTILLES VIA GALINK AVIATION TECHNOLOGY, HONG KONG. 24F, 250Y. 733; CONVERTED TO FREIGHTER.
5 ORDERS A320 FAMILY AIRPLANES:
3 A319-112 (CFM56-5B6/3) (3983, /09B-6195; 4038, /09 B-6408; 4071, /09B-6409), 8C, 24PY, 90Y.
6 A319-115 (CFM56-5B7/P) (2519, /05 B-6200; 2541, /05 B-6201; 2546, /05 B-6202, 2554, /05 B-6203; 2555, /05 B-6208; 2558, /05 B-6209), 8C, 24PY, 90C.
23 A319-132 (V2524-A5) (2200, /04 B-6039; 2203, /04 B-6040; 2232, /04 B-6041; 2273*, /04 B-6042; 2371 /05 B-2294; 2408, /05 B-2295; 2426, /05 B-2296; 2435, /05 B-2297; 2505, /05 B-6205; 2574, /05 B-6206; 2579, /05 B-6207; 2667, /06 B-6219; 2815, /06 B-6220; 2901, /06 B-6158; 2940, /06 B-6160; 2948, /06 B-6161; 2969, /06 B-6162; 3020, /07 B-6168; 3144, /07 B-6239; 3258, /07 B-6240; 3269, /07 B-6241; 3311, /07 B-6242; 3342, /07 B-6243), (ILF) LEASED. *(AWW) LEASED. 8C, 24PY, 90Y.
4 A319-112 (V2524-A5) (3983, B-6195, 2009-08; 4038, B-6408, 2009-09; 4071, B-6409, 2009-10), (ILF) LEASED. 8C, 24PY, 90Y.
18 A319-132 (V2524-A5) (1971, /03 B-6018; 1986, /03 B-6019; 2004, /03 B-6020; 2008, /03 B-6021; 3828, B-6183, 2009-03; 3860, B-6190, 2009-04; 3890, B-6191; 3903, B-6187, 2009-05; 3983, B-6195, 2009-08; 4036, B-6407, 2009-09; 4038, B-6408, 2009-09), (ILF) LEASED. 8C, 24PY, 90Y.
2 A319-132 (V2524-A5) (3860 /09 B-6190; 3890 /09 B-6191), 8C, 24PY, 90Y.
80 ORDERS (2016-02) A320 FAMILY AIRPLANES: INCLUDING 30 A320ceo & 50 A320neo FAMILY (PW1100G-JM),(INCLUDING 24 AERCAP HOLDINGS (DEA) LEASED:
7 +16 A320-200neo (B-8545, 2016-12), AERCAP (DEA) LEASED.
1 A320-200 (B-1697, 2015-08), TIANJIN ASSEMBLED, IN SKYTEAM (STM) ALLIANCE LIVERY.
19 A320-214 (CFM56-55/P) (2334, B-2407 2004-12; 2343, B-2405 2004-12; 2345, B-2374, 2004-12; 2354, 2005-01; 2361, 2005-02; 2275; 2484, B-6251, 2005-07; 2506; 2511, B-6253, 2005-07; 2680, B-6275, 2006-02; 2708, B-6263, 2006-02; 2714, B-6278, 2006-02; 2743, B-6269, 2006-04; 2796, B-6281, 2006-06; 2855, B-6288, 2006-08; 2861, B-6289, 2006-08; 2960, B-6292, 2006-11; 2986, B-6293, 2006-12; 4172, B-6620, 2010-01; 4260, B-6651, 2010-04; 4325, B-6682, 2010-09; 4550, B-6739, 2011-04). 8C, 24PY, 120Y.
1 A320-214 (CFM56-55/P) (4880, B-6817), EX-(D-AVVA), (GEF) LEASED 2011-10.
3 A320-214 (CFM56-55/P) (2689, B-6276, 2006-03; 2701, B-6277, 2006-03; 2772, B-6279, 2006-05), (SIL) LEASED. 8C, 24PY, 120Y.
3 A320-214 (CFM56-55/P) (2708, B-6263, 2006-03; 2770, B-6272, 2006-05; 2950, B-6303, 2006-11), (ILF) LEASED. 8C, 24PY, 120Y.
1 A320-214 (CFM56-55/P) (4671, B-6776), (ICBC) LEASING LEASED 2011-04, EX-(D-ABFR), 8C, 24PY, 120Y.
1 A320-214 (CFM56-55/P) (5693, B-9929), EX-(F-WWDM), AIRCRAFT PURCHASE FLEET LEASED 2013-07. 8C, 24PY, 120Y.
1 A320-214 (CFM56-55/P) (7151, B-8547), EX-(B-OOOP), 2016-08. 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (5579, B-9932), EX-(B-508L) 2013-07. 8C, 24PY, 120Y.
3 A320-232 (V2527-A5) (2689, B-6276, 2006-03; 2701, B-6277, 2006-03; 2714, B-6278, 2006-03), (SIL) LEASED. 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (2275, B-2403), (TCI) LEASED 2004-09. 8C, 24PY, 120Y.
18 A320-232 (V2527-A5) (881, /98 B-2367; 849, /98 B-2365; 859, /98 B-2366; 895, /98 B-2368). 709 (PSS) LEASED, 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (1005), LEASED TO (ARE) 1999-04, UNTIL 2000-02, 8C, 24PY, 120Y.
24 A320-232 (V2527-A5) (2824, B-6282, 2006-07; 2834, B-6283, 2006-07; 3910, B-6575, 2009-06; 3937, B-6560, 2009-06; 3941, B-6576, 2009-06; 3959, B-6577, 2009-07; 3965, B-6585, 2009-07; 3999, B-6582, 2009-08; 4003, B-6583, 2009-08; 4017, B-6588, 2009-09; 4140, B-6641, 2010-04; 4232, B-6653, 2010-06; 4260, B-6651, 2010-04; 4290, B-6652, 2010-06; 4322, B-6656, 2010-05; 4341, B-6661, 2010-06; 4279, B-6680, 2010-08; 4483; 5202, B-6908, 2012-07; 5214, B-6897, 2012-07; 5225, B-6909, 2012-07; 5561, B-9912, 2013-06; 5564, B-9916, 2013-06; 5750, B-9958, 2013-12; 5797, B-9959, 2013-12; 6342, B-1651, 2015-05), 8C, 24PY, 120Y.
2 A320-232 (V2527-A5) (4864, B-6813, 2011-10; 4883, B-6812), (GCP) LEASED 2011-10. 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (4912, B-6816), EX-(F-WWBQ), (ALE) LEASED 2011-11. 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (4928, B-6815), EX-(D-AXAC), (GEF) LEASED 2011-11. 8C, 24PY, 120Y.
1 A320-232 (V2527-A5) (5288, B-6975), EX-(B-513L), (ICBC) LEASING LEASED 2013-01. 8C, 24PY, 120Y.
4 A320-271neo (7269, B-8670; 7343, B-8671; 7449, B-8672), AERCAP (DEA)
1 A321-200 (6233), (CA-CIB) LEASED 2014-08.
6 A321-211 (CFM56-5B3/3) (4338, /10 B-6663; 4341, /10 B-6661; 7250, /16 B-8639, 2016-08; 7506, B-8848, 2017-01; 7558, B-8849, 2017-02; 7652, B-8966, 2017-05), EX-(D-AYAG, D-AVZO, D-AZAX & D-AVYK). 12C, 24PY, 133Y.
31 A321-231 (V2533-A5) (1596, /01 B-2280; 1614, /01 B-2281; 1776, /02 B-2282; 1788, /02 B-2283; 1974, /03 B-2284; 1995, /03, B-2285; 2080, /03 B-2287; 2067, /03 B-2288; 2521, B-; 2530, B-2418; 3934, B-6578, 2009-06; 3938, B-6579, 2009-06; 3951, B-6580, 2009-06; 3981, B-6581, 2009-07; 4184, B-6625, 2010-02; 4189, B-6626, 2010-02; 4194, B-6622, 2010-02; 4266, B-6657, 2010-04; 4271, B-6658, 2010-04; 4274, B-6662, 2010-05; 4292, B-6659, 2010-05; 4299, B-6660, 2010-05; 4416, B-6685, 2010-08; 4430, B-6687, 2010-09; 5237, B-6913, 2012-07; 5890, B-9960; 6233, B-1847, 2014-08; 6241, B-1848, 2014-08; 6440, B-1616, 2015-01), 1596; 1614; 1776; 1788; OPERATIONS BY (SHY) 2004-11. 12C, 24PY, 133Y.
17 A321-231 (V2533-A5) (2713, B-6365, 2006-04; 2741, B-6267, 2006-04; 2759, B-6270, 2006-05; 2767, B-6271, 2006-06; 2809, B-6273, 2006-07; 2936, B-6302, 2006-11; 2971, B-6305, 2006-12; 3067, B-6306, 2007-03; 3075, B-6307, 2007-04; 3112, B-6308, 2007-05; 3217, B-6317, 2007-07; 3241, B-6319, 2007-09; 3251, B-6318, 2007-09; 3764, B-6389, 2009-01; 3784, B-6397, 2009-02; 3847, B-6398; 3867, B-6552, 2009-04; 3890, B-6191, 2009-05; 3920, B-6553, 2009-05), (ILF) LEASED. 8C, 24PY, 120Y.
4 A321-231 (V2533-A5) (4184, B-6625; 4189, B-6626; 4194, B-6622; 6504, B-1626, 2015-03), 2010-02. 8C, 24PY, 120Y.
1 A320-271 (7530, B-8367), AERCAP (DEA) LEASED 2018-03.
3 A321neo (PRW) GEARED TURBOFAN ENGINES (2018-03; 7544, B-8368, 2018-05; 7548, B-8369, 2018-05) AERCAP (DEA) LEASED. 4C, 24PY, 167Y.
4 A330-223 (PW4170A) (1096, /10 B-6135; 1116, /10 B-6515; 1129, /10 B-6516; 1202, /11 B-6528), 4F, 24C, 48PY, 142Y.
10 A330-243 (TRENT 772B-60) (649, /05 B-6056; 652, /05 B-6057; 656, /05 B-6058; 664, /05 B-6059; 818, B-6077; 840, B-6078, 2007-07), 24C, 50PY, 184Y.
2 A330-323 (1425, B-5922, 2013-06; 1593, B-5965, 2015-01; B-5970, 2015-07;).
10 A330-343 (TRENT 772B-60) (879, /07 B-6086; 889, /07 B-6087; 908, /08 B-6098; 935, /08 B-6111; 937, /08 B-6112; 954, /08 B-6500; 964, /08 B-6501; 958, /08 B-6502), 4F, 24C, 48PY, 208Y.
2 A330-343E (TRENT 772B-60) (1821, B-8365; 1826, B-8366), ex-(F-WWKP & F-WWYX) 2017-11.
20 ORDERS (2019-02) A350-900:
5 A380-841 (TRENT 970-84) (31, /11 B-6136; 36, /11 B -6137; 54, /12 B-6138; 88, B-6139; 120, B-6140), 8F, 70C, 428Y.
1 CESSNA 208 CARAVAN (PT6A-114) (00244, /96 B-3610), 9Y.
3 CESSNA 208B GRAND CARAVAN (PT6A-114A) (0919, /01 B-3637; 0952, /02 B-3640; 0953, /02 B-3641), OPERATES FOR (SHY), 10Y.
4 AN-24B (LYC AL-24).
20 ORDERS (COMAC) (CCC) C919 (LEAP-X):
21 SAP Y-5 (HS5).
5 XAC Y-7-100 (WJ5A-1).
3 SHORTS 360 (PT6A-65R).
5 PILATUS BN-2 ISLANDERS.
3 SAAB 340, WET-LEASED TO (SHG).
5 ATR72-500 (PW127F) (521, /97 B-3022; 531, /97 B-3023; 547, /98 B-3025; 552, /98 B-3026; 555, /98 B-3027), OPERATES FOR (XIJ). 72Y.
9 +19/4 ORDERS EMBRAER ERJ-145EU (701, /03 B-3060; 755, /03 B-3061; 781, /04 B-3062; 804, /04 B-3063; 815, /04 B-3065; 823, /05 B-3066) (451; 524; NTU). 50Y.
7 +13/10 ORDERS EMBRAER E190LR (0456, B-3197, 2010-08 - - SEE PHOTO - - "GUN-2011-08-EMB-190LR 1ST;" 0477, B-3147, 2011-10; 0483, B-3148, 2011-10; 0488, B-3149, B-2011-10; 0556, B-3205, 2012-07; 0560, B-3206, 2012-07; 0564, B-3209, 2012-08), CHINA DEVELOPMENT BANK (CDB) LEASING LEASED.
Click below for photos:
WANG CHANSHUN, CHAIRMAN (2016-03).
LIU MING QI, VICE CHAIRMAN.
HU YUN QI, CHAIRMAN (GAMECO) (2000-12).
TAN WANGENG, CHIEF EXECUTIVE OFFICER (CEO) & GENERAL MANAGER (GUN).
LUO LINQUAN, CHIEF OPERATING OFFICER (COO).
HE ZONGKAI, DEPUTY GENERAL MANAGER.
XU JIEZHONG, VICE MANAGING DIRECTOR.
XU JIEBO, VICE MANAGING DIRECTOR, & CHIEF FINANCIAL OFFICER (CFO).
LI JUN, MANAGING DIRECTOR BEIJING BRANCH.
LI KUN, EXECUTIVE VP.
HU CHENJIE (JERRY), CHIEF INFORMATION OFFICER (CIO).
WAN CHUAN XIAO, SENIOR ADVISOR ENGINEERING (CANIRCZ), (firstname.lastname@example.org).
WANG FU LI, ADVISOR (A320 INTRO).
ZHAO XIAOSONG, SENIOR VP INTERNATIONAL AFFAIRS & ALLIANCES.
LUO LAIJUN, SENIOR VP CARGO.
CAPTAIN JIANG PING, VP FLIGHT OPERATIONS, MAINTENANCE & ENGINEERING, (email@example.com)
CAPTAIN HAO JIAN HUA, CHIEF PILOT.
CAPTAIN SHI YONG QIANG, DIRECTOR FLIGHT OPERATIONS MANAGEMENT.
YANG DEFENG, DEPUTY PUBLIC RELATIONS (PR) DIRECTOR.
HU ZHIQUN, DEPUTY DIRECTOR PARTY AFFAIRS WAS DISMISSED AFTER CORRUPTION PROBE (2014-12).
CAPTAIN FENG HUA NAN, GENERAL MANAGER FLIGHT SAFETY (firstname.lastname@example.org).
CAPTAIN FENG HUA NAN, GENERAL MANAGER FLIGHT SAFETY (email@example.com).
CAPTAIN XIONG DAO SHAN, GENERAL MANAGER CHANGSHA.
CAPTAIN ZHAO LIN SHENG, GENERAL MANAGER GUILIN.
DUAN YAN CHEN, GENERAL MANAGER GUIYANG.
LI YI DONG, GENERAL MANAGER KUALA LUMPUR.
CAPTAIN XUE WEN YU, GENERAL MANAGER SHANTOU.
JIANG JIN MIN, GENERAL MANAGER WUHAN.
ZHANG LING, GENERAL MANAGER ZHENGZHOU.
CAPTAIN YU ZHEN FA, GENERAL MANAGER ZHUHAI.
LIO GUOJEN, GENERAL MANAGER SHENZHEN.
LOUIS LU, REGIONAL MANAGING DIRECTOR AUSTRALIA & NEW ZEALAND.
ZHEN WEIBING, DEPUTY GENERAL MANAGER SHENZHEN.
YUAN XIN AN, VP MAINTENANCE & ENGINEERING (CANMRCZ) (firstname.lastname@example.org).
ZHENG EN REN, VICE PRESIDENT.
HAO JIAN HUA, VICE PRESIDENT.
JIANG PING, VICE PRESIDENT.
REN JI DONG, VICE PRESIDENT.
TANG WAN GENG, VICE PRESIDENT.
HE ZONG KAI, VICE PRESIDENT.
SHEN TAI RAN, GENERAL MANAGER MAINTENANCE & ENGINEERING.
MS WEI GUI LAN, DEPUTY GENERAL MANAGER ENGINEERING & MAINTENANCE (1997-06) (CANMRCZ) (email@example.com).
ZHANG JIAN MIN, CHIEF ENGINEER (COMPUTING).
WANG GANG, AIRCRAFT ENGINEERING MANAGER.
WANG YU HONG, AIRCRAFT ENGINEERING MANAGER.
JIANG AI SHENG, CHIEF INSPECTOR.
CHINA SOUTHERN AIRLINE (GUN) MAINTENANCE ENGINEERING DIVISION (GAMECO):
GUANGZHOU AIRCRAFT MAINTENANCE ENGINEERING (GAMECO) PERSONNEL:
NORBERT MARX, GENERAL MANAGER.
DONG SU GUANG, DEPUTY GENERAL MANAGER (GAMECO) (2002-09).
JOHN TRACCI, DIRECTOR ENGINEERING & MAINTENANCE (GAMECO) (2001-03).
WILLIAM SHEN, DIRECTOR QUALITY ASSURANCE (QA)/QUALITY CONTROL (QC) (GAMECO) (2002-12).
TANG BING, DIRECTOR NEW BUSINESS DEVELOPMENT (2001-03).
ZHOU BAO PING, DIRECTOR SPARES, EX-(CAT) (2002-12).
LIN CHAO ZHONG, QUALITY CONTROL (QC) DEPUTY DIRECTOR (GAMECO).
LUO ZHENG MING, DEPUTY DIRECTOR QUALITY ASSURANCE (QA) (GAMECO).
HU YI KE, DEPUTY DIRECTOR ENGINEERING.
HE XIAOJING, GENERAL MANAGER CHINA SOUTHERN SICHUAN BRANCH COMPANY.
CHEN HUAN HUI, MANAGER PRODUCTION CONTROL (GAMECO).
LI GUANG HENG, ENGINEERING MANAGER.