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FORMED IN 1992 AND STARTED OPERATIONS IN 1993. LOCATED ON THE CHINESE MAINLAND JUST ACROSS THE WATER FROM HONG KONG. SCHEDULED, DOMESTIC & REGIONAL, PASSENGER & CARGO, JET AIRPLANE SERVICES.
BAOAN INTERNATIONAL AIRPORT
SHENZHEN 518128, 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.
Shenzhen with a population of some 13 million people has been China’s fastest growing city for many years. Its tourist attractions include the Windows Of The World theme park, which contains 118 miniature (and not so miniature) replicas of famous buildings from across the globe including the Eiffel Tower, Sydney Opera House and Taj Mahal. The Eiffel Tower, at 108 m tall, is around one-third the height of the original.
Shenzhen airport caters primarily for domestic passengers and has grown from around 9 million passengers in 2002 to over 18 million in 2006.
APRIL 1993: SERVICES TO BEIJING, CHENGDU, HAIKOU, HANGZHOU, MEIXAN, NANJING, SHANGHAI, WENZHOU, XIAMEN, YANTAI & ZENGZHOU.
2 737-3K9'S (PS691; PS692), BAVARIA (BAV) LEASED.
JUNE 1995: DISCUSSIONS REGARDING POSSIBLE JOINT VENTURE, CARGO OPERATION OF 747-200F. ALSO INTERESTED IN ATR 42.
APRIL 1996: TO STANDARDIZE (CFM56-3B1) ENGINES TO (CFM56-3C1).
GAO JUN YUE, PRESIDENT & GENERAL MANAGER (EX-PRESIDENT & GENERAL MANAGER) (CNW).
RETURNED LEASED 737-300 TO (ZHO).
JUNE 1996: ALL (CFM56-3B1) ENGINES NOW CONVERTED TO (CFM56-3C1). RECEIVED 5TH 737-300 (6TH BY THE END OF 1996), (PQ486) (ILF) LEASED.
SEPTEMBER 1996: SHENZHEN AIRLINES (SHZ) IS TRYING TO RESIST (CAAC) (CAC) PRESSURE TO BUY 5 CHINESE MADE MD-90-30'S, INSTEAD OF BOEING (TBC) 737'S. IT IS DUE TO RECEIVE ITS 6TH 737 IN NOVEMBER 1996, +2 IN 1997. (SHZ) WANTS TO STAY WITH (TBC) TO SIMPLIFY OPERATIONS AND SUPPORT.
OCTOBER 1996: 1 737-300 (PS629), ANSETT WORLDWIDE (AWW) LEASED.
NOVEMBER 1996: GAO JUN YUE, PRESIDENT AND DELEGATION OF BOARD MEMBERS ARE VISITING USA AIRLINES TO GAIN INSIGHT INTO AIRLINE MANAGEMENT TECHNIQUES, & WILL CONCLUDE VISIT IN SEATTLE FOR THE DELIVERY OF 737-300 (PS629).
JANUARY 1997: POSSIBLE INTEREST IN 777 AIRPLANES.
FEBRUARY 1997: A BABY BOY WAS BORN ON A FLIGHT FROM YIWU TO SHENZHEN (THE INFANT WAS AWARDED A LIFETIME PASS TO FLY (SHZ))!
LOOKING AT LEASE OF 737-300QC'S (23499; 23500), FROM (GUI), BECAUSE OF GETTING INTO THE CARGO BUSINESS.
APRIL 1997: ZHANG PEI (BILLY) VICE GENERAL MANAGER MAINTENANCE ENGINEERING. MAO RUI DIRECTOR ENGINEERING/MAINTENANCE & SPARES; XIAO KUN ZHOU ROTATIONAL DUTY MANAGER.
JUNE 1997: ZHANG PEI (BILLY) DIRECTOR CABIN SERVICE & SECURITY. CAI JIAN JIANG VP MAINTENANCE ENGINEERING & SPARES.
SEPTEMBER 1997: DUAN DA YANG (PREVIOUS PRESIDENT) HIRED AS A CONSULTANT, TO VISIT BOEING SEATTLE FOR 737 DISCUSSIONS.
OCTOBER 1997: FORMS A "STAR AIRLINE UNION" WITH 5 OTHER REGIONAL AIRLINES: HAINAN AIRLINES (HNA), ZHONGYANG (ZHO), SICHUAN (SIC), SHANGDONG (SHG), & WUHAN (WUH) TO SHARE PARTS, TECHNICAL FACILITIES & RESOURCES, CHECK-IN & PRE-FLIGHT SERVICES.
DECEMBER 1997: AS PART OF "STAR AIRLINE UNION," SHENZHEN AIRLINES (SHZ) WILL BE HQ TECHNICAL LIAISON OFFICE FOR MAINTENANCE, ENGINEERING & SPARES.
MARCH 1998: LAST 3 737-300'S "C" MAINTENANCE CHECKS AT (TAECO), XIAMEN.
APRIL 1998: 363 EMPLOYEES.
MAY 1998: ZHANG PEI (BILLY) TO SEATTLE FOR 3 MONTHS TO DO BOEING (TBC) INSTITUTE OF AVIATION LEADERSHIP PROGRAM.
JUNE 1998: 2 ORDERS (SEPTEMBER 1998) 737-700'S BY VIRTUE OF A CONTRACT DEFAULT BY (XIH).
AUGUST 1998: THE (CAAC) (CAC) ALLOCATES 2 737-700'S (OF NEW 36 ORDERS) TO SHENZHEN AIRLINES (SHZ), FOR DELIVERY IN OCTOBER 1998.
OCTOBER 1998: 5 YEARS ANNIVERSARY!
2 737-79K'S (29190, 29191), BAVARIA (BAV) LEASED.
APRIL 1999: 363 EMPLOYEES.
JUNE 1999: CAI JIAN JIANG PRESIDENT & GENERAL MANAGER, EX-VP MAINTENANCE & ENGINEERING REPLACES GAO JUN YUE, WHO RETIRED. JIANG SHI WEI VP MAINTENANCE, ENGINEERING & SPARES, EX-VP FLIGHT OPERATIONS.
DECEMBER 1999: POSSIBLE INTEREST IN 4 737-800'S.
APRIL 2000: 3 ORDERS 737-700'S ORIGINALLY ORDERED BY XINJIANG AIRLINES (XIJ). THE 2 ORDERS MD-90'S FROM AVIC (ASSEMBLED IN SHANGHAI) ARE TO BE SOLD.
JULY 2000: 1999 = 930 MILLION (RPK) TRAFFIC; 1.84 MILLION (FTK) FREIGHT TRAFFIC; 659,000 PASSENGERS (PAX).
AUGUST 2000: 1 737-78S (30169, B-2666) DELIVERY.
SEPTEMBER 2000: +1 ORDER 737-700. 1 737-78S (30170, B-2667) DELIVERY.
DECEMBER 2000: 1 737-78S (30171, B-2668) DELIVERY.
APRIL 2001: WANG GUO XIAN DEPUTY DIRECTOR MAINTENANCE.
LETTER OF INTENT (LOI) 2 ORDERS 737-700QC'S AND 10 ORDERS 737-800'S.
MAY 2001: MEMO OF UNDERSTANDING (MOU) 2 ORDERS (OCTOBER 2001) 737-330QC'S (23524; 835), LUFTHANSA (DLH) LEASED.
JUNE 2001: JOINS CHINA SKY AVIATION ENTERPRISE GROUP ALLIANCE (CSAEGA): INCLUDING SHANDONG (SHG), SHANGHAI (SHA), SICHUAN (SIC), WUHAN (WUH) AND CHINA POSTAL AIRLINES.
IN 2000, CARRIED 8.1 MILLION PASSENGERS (PAX) (35% OF DOMESTIC MARKET) WITH 103 AIRPLANES AND 533 ROUTES. WILL CODE SHARE AND JOINT MANAGE AIRPLANES, EQUIPMENT, GROUND HANDLING, ENGINEERING, MAINTENANCE, AND CARGO.
SEPTEMBER 2001: NEGOTIATIONS WITH (GECAS) (GEH) FOR POSSIBLE 5 737-700'S, 8 YEAR LEASED.
DECEMBER 2001: 1 737-77L (32722, B-2669) DELIVERY.
JANUARY 2002: 2 737-7LQC'S, GECAS (GEF) LEASED (29893; 32244), EX-MIDWAY (MID). 10 ORDERS 737-900'S.
MARCH 2002: 850 EMPLOYEES.
APRIL 2002: 844 EMPLOYEES (INCLUDING 103 FLIGHT CREW (FC); 99 CABIN ATTENDANTS (CA); & 158 MAINTENANCE TECHNICIANS (MT).
2 737-8Q8 (28241; 30628), (ILF) 7 YEAR LEASED.
October 2002: 2 737-7BX's (30741; 30742), ex-Midway (MID), (GECAS) (GEF) leased.
March 2003: Plans to establish a separate cargo business and seeks rights to operate international passenger services, starting September 2003 to Singapore, Bangkok, and Vietnam.
2 orders (June 2003) A300-600F's.
April 2003: 1,200 employees.
Parent organization/shareholders: Guangdong Development Bank (65%); (CNAC) Air China (BEJ) (25%); & Shenzhen Investment Management (10%).
August 2003: (GECAS) (GEF) announced it has leased 2 737-800 airplanes to Shenzhen Airlines (SHZ) of China. In addition to these 2 airplanes, (GEF) leases 4 737-700 airplanes to (SHZ).
(SHZ) is 1 of the fastest growing regional air carriers in China, with scheduled domestic service to >20 destinations.
2 737-800's (28639, B-5049; 28643, B-5050), (GECAS) (GEF) leased.
November 2003: $2.4 billion, 30 orders 737's (CFM56) to be distributed to: Air China (BEJ) (5 737-700's), Xiamen Airlines (XIA) (5 737-700's), Hainan Airlines (HNA) (8 737-800's), Shandong (SHG) (7: 3 737-700's & 4 737-800's), and Shenzhen Airlines (SHZ) (5 737-900's).
May 2004: Parent organiztion/shareholders: Guangdong Development Bank (65%); (CNAC) (Air China (BEJ) (25%); & Shenzhen Investment Management (10%).
July 2004: Cooperation talks with Lufthansa Cargo (LUB), whereby (SHZ) will take a minority stake in a joint venture with (LUB), who currently operates 10x-weekly to China, including 5x- each to Shanghai and Beijing.
737-36N (28555, B-2610), (GECAS) (GEF) leased.
October 2004: Lufthansa Cargo (LUB) and Shenzhen Airlines (SHZ) signed an agreement to establish a new cargo airline to be called "Jade Cargo International (JDC)" based in Shenzhen. European investment institute (DEG) is part of the joint venture. (SHZ) will have a 51% stake, (LUB) (25%), & (DEG) (24%). It will start operations in the Chinese new year 2005. Initially, (JDC) plans to operate 2 A300-600F's to cities within China and to India, Malaysia, Singapore, & Thailand. Service to destinations outside Asia could be launched later. Rudolf Tewes General Manager (JDC) stated (JDC) will focus mainly in standard cargo business.
November 2004: 1,200 employees.
February 2005: 2 737-36N's (28559; 28573), (GEF) leased.
April 2005: Launch of Jade Cargo International (JDC), the joint cargo carrier between Lufthansa Cargo (LUB) and Shenzhen Airlines (SHZ) with 3 A300-600F's has been deferred until autumn.
May 2005: Huirun Investment Company, Shenzhen, and Bright Oceans Corporation, Beijing, with # 2.72 Billion yuan/$328.5 Million outbid nearest rival Air China (BEJ) to take control of Shenzhen Airlines (SHZ). (BEJ) is the 2nd-largest stakeholder in (SHZ) with 25%.
A320-214 (994, B-2416), ex-Iberia Airlines (IBE), (ILF) leased.
June 2005: Selects Rockwell Collins sensors, radar & satellite communications for its 6/18 orders A319/A320's.
737-97L (33648, B-5106) delivery.
July 2005: 2 737-97L's (33644, B-5102; 33649, B-5109), deliveries.
August 2005: Shenzhen Airlines (SHZ) chose (CFM56-5B)s to power 3 A320s and 2 A319s on order. (CFMI) valued the engine deal at $60 million at list prices. (GE) will provide total maintenance support for the engines under a 15-year OnPoint Solution services agreement potentially worth up to $240 million.
2 737-97L's (33645, B-5103; 33646, B-5105), deliveries.
September 2005: Shenzhen Airlines (SHZ) launched daily service to Kuala Lumpur.
November 2005: China signed a deal for 70 737-700/800s 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).
December 2005: Liftoff for Jade Cargo International (JDC), an all-cargo joint venture between Lufthansa Cargo (LUB) and Shenzhen Airlines (SHZ) founded in October 2004, apparently has been pushed back again.
(JDC) now will receive the 1st of 6 new 747-400ERFs in June 2006, 6 months later than initially announced, with the 2nd and 3rd set to join the Shenzen-based carrier in October and December next year. "The other airplanes will arrive during 2007. 1st routes are intra-Asian services to Nagoya and destinations like South Korea and India," Lufthansa Cargo (LUB) Executive Board Member Andreas Otto said. (JDC) originally was expected to begin operations in the 1st quarter of this year. Further expansion to Europe is expected with the introduction of the 3rd airplane, with service to North America following after the 4th arrives. The airline is recruiting pilots (FC).
At present, no other departure points in China are planned. (SHZ) has a 51% stake in (JDC), with Lufthansa Cargo (DLH) holding 25%, the maximum for a single foreign investor in a joint venture of this kind. The remaining 24% is held by (DEG), a subsidiary of the KfW-Bank Group.
Airbus (EDS)'s negotiations with Chinese authorities resulted in a blockbuster contract as (EDS) reached a "general terms agreement" with Chinese Aviation Supplies Import and Export Group (CSC) for the purchase of 150 A320 family airplanes.
The order comprises A319s, A320s and A321s (the largest single order (EDS) 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 French Prime Minister Dominique de Villepin and Chinese Premier Wen Jiabao during the latter's visit to France.
"Since it was 1st 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 (EDS) 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 6 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 1 day, the signing of a Memo of Understanding (MOU) between Airbus (EDS) and the National Development & Reform Commission of China covering Chinese participation in (EDS) programs including the possibility of establishing a final assembly line "for single-aisle airplanes in China."
5 Chinese companies currently produce parts for (EDS), 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. (EDS) and China Aviation Industry Corporation (CSC) signed a $500 million extension last month to a contract for A320 family wing boxes.
Shenzhen Airlines (SHZ) has placed an order for 5 737-800s. Delivery of the airplanes are expected in 2008.
January 2006: Teledyne Controls said Shenzhen Airlines (SHZ) will add its AirFASE flight data analysis and reporting software tool and its Vision flight animation system to its existing flight operations quality assurance program.
Shenzhen Airlines (SHZ) inaugurated nonstop service from Shenzhen to Seoul. The airline now operates 2x-weekly using a 737.
February 2006: Operates to 46 domestic destinations, plus Kuala Lumpur and Seoul.
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 5 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 5 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 5 years had amounted to only CNY10 billion.
Li Kun President, 45, ex-China Southern (GUN) (with them for 27 years), replaces Dong Lijia.
Shenzhen Airlines (SHZ) will lease 3 additional A320s via (RBC) Aviation Capital. These are the 5th airplanes placed from the (RBS) order for 15 A320s last year, the other 2 went to All Nippon Airways (ANA). (SHZ) expects all 3 to be delivered by January 2008. They will also lease 2 737-800's from (CIT) Leasing (TCI) which will be delivered by October 2006. In addition, (SHZ) stated that they expect to increase fleet size from it's current level of 33 airplanes to 70 by the end of 2008.
2 A319-112's (2672, B-6196; 2684, B-6197), deliveries.
April 2006: Boeing is expected to sign contracts shortly with Chinese airlines for 80 737s. The deal is the 2nd 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) 5, and Shandong Airlines (SHG) 6, 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 CAAC (CAC), listing the orders as part of the year's record-breaking sales.
August 2006: A319-112 (2841, B-6153), delivery.
September 2006: Shenzhen Airlines (SHZ) received its 1st A320 in the airline's new livery - see photo. The airplane will be registered (B-6286), was previously (F-WWDU).
October 2006: A319-112 (2905, B-6157), (CIT) (TCI) leased and A320-214 (2909, B-6286), deliveries.
November 2006: 737-8BK (33020, B-5186), & A319-115X (2935, B-6165), (CIT) Group (TCI) leased.
December 2006: 737-8BK (33828, B-5187), CIT (TCI) leased. 2 A320-214s (2973, B-6296; 2980, B-6297), deliveries.
January 2007: Mesa Air Group signed an agreement with Shenzhen Airlines (SHZ) to create a Chinese regional carrier, yet to be named, that is expected to begin service within the next year operating 50-seat regional jets.
As long ago as last spring, Mesa said it was looking to expand to the Chinese mainland. The deal is the 1st of its kind for any USA regional. Shenzhen (SHZ) will have a 51% stake in the new carrier with an investment of $32.6 million. Mesa will invest $31.3 million for the remaining stake, according to Merrill Lynch.
"We are delighted and privileged to be the first USA passenger airline to form a strategic alliance to create a new airline to operate in the People's Republic of China," Mesa Chairman & (CEO), Jonathan Ornstein said. "We at Mesa look forward to making a positive contribution to the development of the regional airline industry in China and to forging a strong, long-term relationship with our friends at Shenzhen Airlines (SHZ)."
(SHZ) operates a fleet of 45 A320s and 737s on 100 routes within China, employs 6,300 and carried 5.3 million passengers last year. "Mesa's experience and reputation as a leader in the regional airline industry make it the perfect choice to partner with us in launching this airline," Shenzhen (SHZ) President Li Kun said.
Ornstein, who was in Beijing for the announcement, said Mesa will provide "significant technical capability" including support for pilots (FC), maintenance, operations and training as well as the airplanes. Focus cities for the new service are Shenzhen, Beijing, Chongqing, Nanjing, Kunming, Dalian, Shenyang, Xian, Zhengzhou and Nanning.
February 2007: 737-86N (32686, B-5317), GECAS (GEF) leased.
March 2007: Shenzhen Airlines (SHZ) posted a record profit of +CNY360 million/+$46.5 million in 2006, more than triple the previous year's result, on a +40.1% lift in operating revenue to CNY6.45billion.
President Li Kun said (SHZ)'s May 2005 transition from a state-owned enterprise to a privately run company was the catalyst for the "very successful" performance. During reorganization, it realized gains of +CNY2.72 billion from the sale of a 65% stake originally held by Guangdong Development Bank to Bright Ocean Corporation and Huirun Investment International. It has been China's leading private carrier since then, and the country's 5th-largest airline. Passenger boardings grew +24.3% year-over-year to 7.1 million and load factor rose to 77.9% LF.
This year, (SHZ) expects to maintain revenue growth of at least 40% and is targeting 10 million passengers. It continues to pursue its "369" strategy to expand its fleet to 70 in 3 years, 100 in 6 years, and 160 in 9 years. It took delivery of 12 airplanes last year and now operates 45 A320s and 737s.
737-86N (32688, B-5322), (GEF) leased.
April 2007: The regional joint venture between Shenzhen Airlines (SHZ) and Mesa Air Group, announced last December, will be called "Kunpeng Airlines" and will launch operations in Xi'an with three CRJ-200s at year end. The new carrier is expected to be approved soon by the (CAAC) (CAC). The news came shortly after Hainan Airlines (HNA) parent, (HNA) Group unveiled its own regional subsidiary, "Grand Xinhua Express" (GXE), which also will fly to Xi'an. (HNA) said it intends to capture two-thirds of China's regional market by 2012. Kunpeng will handle both passenger and cargo traffic as well as charter flights when it launches, Shenzhen Airlines (SHZ) said. The Chinese carrier will have a 51% stake in the new entity with an investment of $32.6 million, while Mesa will put in $31.3 million for the remainder. Kunpeng Airlines expects to add an average of 20 airplanes each year and will begin taking delivery of ARJ21s when they enter service in 2009. The fleet eventually will comprise 160 to 200 jets with 50 to 90 seats. The carrier will serve 2nd-tier destinations to complement (SHZ)'s trunk routes. Based in its namesake city in southern China with additional hubs in Guangzhou, Nanning and Wuxi and recently-added bases in Shenyang, Zhengzhou and Changzhou, (SHZ) is hoping to establish a foothold in the west by basing Kunpeng in Xi'an, where it will compete with (GXE). (HNA) Group told the Shanghai Securities Gazette that "Competition is unavoidable in the future as Shenzhen (SHZ) is taking a similar approach to ours."
Industry analysts have suggested that this "western attraction" for regional startups is based not only on the fact that the area's size and smaller population seem to create a suitable breeding ground for regionals, but on (CAAC) (CAC)'s policy of encouraging growth in the area through subsidies.
May 2007: Shenzhen Airlines (SHZ) is looking to capture a significant share of the Chinese business aviation market with Yalian Business Jet Company, a recently established joint venture with Business Aviation Asia (BAA) of Hong Kong, and National Trust (NT), a Beijing-based financial services provider. (SHZ) holds a 46% stake in the new entity with an investment of CNY46 million/$6 million, while (BAA) and (NT) put in CNY43 million and CNY11 million, respectively, for 43% and 11%.
(SHZ) President Li Kun noted the new venture's launch this year and aims to grab >50% of China's business aviation market in the next 5 years. The Joint Venture (JV) will operate mainly from Beijing and Shenzhen, and plans to take delivery of 15 to 20 business jets within the next 2 years and build a terminal and tarmac in Shenzhen. It was not until the mid-1990s that a business aviation market began developing on the Chinese mainland, and it has grown slowly in large part because business jets are taxed more than commercial airplanes and are viewed as a privilege restricted to the super wealthy. But those conditions appear to be changing, and it is estimated that China will need 600 to 1,200 business jets in the next 10 years and that the industry will produce annual turnover of CNY60 billion.
A320-214 (3131, B-6312), (ILF) leased, and A320-214 (3132, B-6313), (RBS) Aerospace 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 3 737-300s 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 Company 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 Company, Shenzhen Guorui Investment Company, and Xinjiang Siweida Technology Company 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.
Shenzhen Airlines (SHZ) and Air China (BEJ) each ordered Aviation Partners Boeing (APB) blended winglet shipsets for 25 737-800s scheduled to deliver from February 2008 through 2010 (Shenzhen - (SHZ)) and from October 2007 through 2010 (Air China - (BEJ)).
28 orders A320s.
737-86N (35215, B-5345), & 2 A320-214 (3153, B-6315; 3206, B-6316), deliveries.
August 2007: Shenzhen Airlines (SHZ) plans to raise as much as $1 billion in an initial public offering (IPO) share sale to fund fleet expansion next year, according to a report in the "South China Morning Post." As a privately run airline, (SHZ) has found it increasingly difficult to reach loan deals with banks, owing to its high asset liability rate, even though it has posted net profits for 10 consecutive years. (SHZ) remains committed to its "369" strategy of expanding its fleet to 70 airplanes in 3 years, 100 in 6 and 160 in 9. It now operates 45 A320s and 737s.
"Last year, we spent our net income on establishing 3 branch base companies in Changzhou, Shenyang and Zhengzhou, and purchased Changzhou Airport, as well as investments in Jade Airlines (JDC) and hotels. So we have to raise funds through an (IPO) for fleet expansion," a (SHZ) insider said. (SHZ) posted a record profit of +CNY360 million/+$47.5 million in 2006, more than 3x- the previous year's result.
After some initial difficulty, Chinese (LCC)s are making progress with securing new investors and subsequent (IPO)s. Hong Kong-based long-haul carrier Oasis Hong Kong Airlines (OHK) plans to sell a 20% stake to a new investor by October, Chairman Li Zhuomin confirmed to the local "Ta Kung Pao" newspaper. In addition, privately run Shenzhen Airlines (SHZ) revealed its plan to sell a 20% share worth approximately $200 million to a single investor, with Deutsche Bank and several hedge funds, including Marathon and Och-Ziff, among the widely reported candidates. (SHZ) has refused to reveal where it will list, but industry insiders have indicated Shanghai is the likely choice.
Oasis (OHK) and (SHZ) are among several newer entrants who have pursued strategic investors as access to traditional funding has become more problematic. While some have had difficulty, Li told "Ta Kung Pao" that many international investment banks and financial organizations have expressed an interest since Oasis (OHK)'s inaugural flight to London last fall. (SHZ) currently is negotiating with interested parties and a decision is expected in October. Earlier this year, it said it expected to raise as much as HK$10 billion/$1.28 billion with an initial share sale in 2009.
Among other startups, Shanghai-based Juneyao Airlines (JYA) is preparing an overseas private placement of 20% to 25% and expects to raise approximately $150 million in an (IPO). Last month, Spring Airlines (CQH) confirmed it reached a deal with Citibank. It plans to list on a foreign exchange in 2009.
Industry analysts have noted that the timing is right for Chinese (LCC)s to introduce new investors and plan (IPO)s, as the interest of foreign investors has been raised by the industry's improved performance in the first semester and expectations of continuing appreciation of the yuan.
September 2007: Shenzhen Airlines (SHZ) plans to seek a share listing in 3 years, when it enters into the 2nd phase of its "369" strategy, Chairman Zhao Xiang told "China Business News." The "369" strategy is divided into 3 phases, namely to expand its fleet to 70 airplanes in 3 years, 100 in 6 years, and 160 in 9 years. "Currently we don't have to go listed, which won't make any financial sense to us now," Zhao said. (SHZ) has negotiated >CNY30 billion/$4 billion in bank credits since its May 2005 transition from a state-owned enterprise to a private company.
OnAir reached an agreement with (SHZ) to provide in-flight communication services including e-mail, (SMS) and voice calls aboard (SHZ)'s fleet of 737s and A320s by mid-2009. "We are very proud to be the 1st airline in China to provide passengers with the ability to communicate during flights," (SHZ) President, Li Kun said. The OnAir service will enable passengers to use Blackberry-type devices and mobile phones to send and receive text messages and e-mails and to make and receive phone calls in flight.
Kunpeng Airlines, the Xi'an-based (JV) regional carrier created by Shenzhen Airlines (SHZ) and Mesa Air Group, is scheduled to launch services today by opening 11 routes to destinations including Taiyuan, Tianjin, Yichang, Huhehaote, Nanchang, Zhengzhou and Hefei. It is noteworthy that Kunpeng was registered in Beijing but its operating base is located in Xi'an. Chinese industry analysts suggest that this "western attraction" for regional startups is driven partly by (CAAC)'s policy of encouraging growth in the region through subsidies.
Kunpeng Airlines, the Xi'an-based Joint Venture (JV) regional carrier created by Shenzhen Airlines (SHZ) and the Mesa Air Group, is scheduled to launch services by opening 11 routes to destinations including Taiyuan, Tianjin, Yichang, Huhehaote, Nanchang, Zhengzhou and Hefei. It is noteworthy that Kunpeng was registered in Beijing, but its operating base is located in Xi'an. Chinese industry analysts suggest that this "western attraction" for regional startups is driven partly by (CAAC) (CAC)'s policy of encouraging growth in the region through subsidies.
CRJ-200ER (7217, B-3073), Mesa leased ex-(N17217) for Kunpeng Airlines operations.
October 2007: 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 2 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 (FC), which normally runs several million yuan for each individual. As a result, pilots (FC) 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 3 months later, hiring 50 private pilots (FC). This month Spring Airlines (CQH), East Star Airlines (ESR), and United Eagle Air (UEG) disclosed their interest in recruiting such pilots (FC) in the near future. (SHZ) has taken it 1 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.
The (CAAC) (CAC) is aiming to boost China's long-neglected domestic regional market further, with the distribution of new subsidies, even as the recent trend of companies investing in regional startups, appears to be accelerating. According to a new regulation scheduled to be implemented by year end, all regional routes measuring 600 km or shorter, will be eligible for the subsidies, with preference given to those opened in central, western or NE China. "Though government subsidies can alleviate some temporary difficulties for the regional carriers, it is much more important for these carriers to improve their profitability," China Securities Co analyst Li Lei noted. Last year, (CAAC) (CAC)'s administrative branch in the NW was chosen on a trial basis to distribute subsidies to regional carriers operating in the region. Industry insiders credit the program with helping push Kunpeng Airlines, the Mesa Air Group/(SHZ) joint venture, that launched last month, to choose Xi'an as its base. Kunpeng started with 3 CRJ-200s and intends to add 20 50/90-seat airplanes annually, until it reaches a fleet of 160 to 200. Other signs the regional market is heating up can be found at (HNA) Group's Grand Xinhua Express (which currently operates 29 Do-328s but may take some of the 50 ERJ-145s and 50 E190s ordered by the parent company, according to Chairman Cheng Feng) and China Eastern Airlines (CEA), which has confirmed its plan to launch its own regional in partnership with AVIC I.
Kunpeng Airlines, the regional joint venture between Shenzhen Airlines (SHZ) and Mesa Air Group, formally launched after 9 months of preparation. It had been operating a Xi'an to Taiyuan to Tianjin route on a trial basis, but now is flying on 11 routes to the aforementioned cities plus Yichang, Huhehaote, Nanchang, Zhengzhou and Hefei, with 3 48-seat CRJ-200s. (SHZ) President Li Kun said Kunpeng will establish several bases in addition to Xi'an in order to limit flight times to 1 hour and still serve both domestic and SE Asia destinations. (SHZ) expects to increase its fleet to 20 airplanes in 2008, and plans to add an average of 20 50/90-seat airplanes each year. By 2016, it expects to operate 160 routes with 200 airplanes and 900 daily departures, Li said.
November 2007: Following the recent launch of its Xi'an-based regional joint venture Kunpeng Airlines, Shenzhen Airlines (SHZ) will continue its "Go West" strategy with Yinchuan-based Ningxia Airlines. Launched in conjunction with the government of Ningxia autonomous region, the carrier is scheduled to be launched next August, according to (SHZ) President Li Kun. (SHZ) signed a strategic cooperative agreement with the Ningxia government under which the new airline will open trunk routes from Yinchuan to large and medium-sized domestic destinations, as well as regional and international routes. "As a young and fast-growing carrier, (SHZ) always heeds the national call to 'Go West'," Li said. "Ningxia Airlines is a typical example." Yinchuan is located about 300 miles NW of Xi'an. Details still are being negotiated between (SHZ) and local authorities and the new carrier still must be approved by the (CAAC). (SHZ) Vice Party Affairs Chief Liu Hang said (SHZ) hopes to be the controlling stakeholder in the new venture.
(SHZ) posted a net profit of +CNY509 million/+$68.1 million in the 1st 9 months of 2007, up +64.7% from the +CNY309 million in the same period last year. Its fleet numbers 67 airplanes and is expected to reach 70 by year end, and 100 in 2008.
December 2007: Lufthansa Technik (DLH) (LTK) Shenzhen reached a 10-year Total Component Support agreement with Shenzhen Airlines (SHZ) covering (SHZ)'s growing A320 fleet with a projected 500 line replaceable units provided locally. The contract eventually will cover up to 70 A320s.
(SHZ) is planning to launch a new airline in NW China to be called "Ningxia Airlines." (SHZ) said Yinchuan-based, "Ningxia Airlines" is to begin flying in 2008 and it will be through a joint venture with the provincial government of Ningxia.
Domestic China market share is shown on ATTACHED - "SHZ-DOM-MKT-SHARE-DEC07."
January 2008: 2 A320-214s (3366, B-6351, (ILF) leased; 3383, B-6352, (RBS) Aerospace leased).
February 2008: 737-8AL (35081, B-5357), (BOC) Aviation (SIL) leased.
March 2008: 737-8AL (35079, B-5377), (BOC) Aviation (SIL) leased, and 2 A320-214s (3435, B-6358; 3440, B-6357, (ILF) leased), deliveries.
April 2008: 737-8AL (35085, B-5378), (BOC) Aviation (SIL) leased, delivery.
May 2008: 737-8AL (35087, B-5379), (BOC) Aviation (SIL) leased, 737-87L (35527, B-5380), delivery and A320-214 (3456, B-6359), (ILF) leased.
July 2008: Shenzhen Airlines (SHZ) competes with China Southern (GUN) by starting cross-country, Guangzhou to Urumqi.
International Aero Engines (IAE) announced at the Farnborough Air Show that Shenzhen Airlines (SHZ) chose the (V2500) to power 28 A320 family airplanes and backed the engine order with a long-term "V2500Select" agreement. (IAE) valued the deal at >$812 million. The engines will be the SelectOne build standard, with delivery commencing in June 2009.
August 2008: 2007 revenue ending December 2007 = $1,319 million: +33.4% (RPK) traffic; +33.9% (ASK) capacity; 77.8% LF.
SEE ATTACHED: "SHZ-PRES-AUG08-A/B/C/D/E."
Shenzhen Airport has seen traffic growth rates skyrocket. Opened in October 1991, last year it handled >20 million passengers and 620,000 tonnes of cargo. This put it only behind Beijing, Shanghai, and Guangzhou airports. Passenger numbers have grown an average annual rate of +18.3% since its opening, while freight throughput has increased +30.8% annually and airplane movements at an average rate of +17.5% per year. Over the past 5 years, alone, throughput has doubled. A major expansion of air cargo handling facilities is underway, as is the construction of a 2nd runway. A 3rd passenger terminal will also be built. The expansion is necessary if forecasts are to be believed. By 2010, the airport expects to handle 24 million passengers annually, rising to 36 million by 2015, 45 million by 2020, and 60 million by 2035. Cargo is expected to rise to 1 million tonnes annually by 2010, 1.8 million by 2015, 2.4 million by 202, and 4 million by 2035.
Meanwhile, discussions are taking place over a partnership with Hong Kong International, which is just across the border from Shenzhen. The 2 have been in talks for some time about a wide-ranging tie-up and some observers believe Hong Kong's Airport Authority may eventually buy into Shenzhen Airport.
737-87L (35530, B-5401) delivery.
September 2008: A320-214 (3599, B-6377) delivery.
November 2008: 9 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 (CAC), (BEJ) will operate 10 while 12 have been allotted to (CEA), 10 to (GUN), 5 to (HNA), 6 to Xiamen (XIA), and 5 to (SHA). (SIC), (SHG), and (SHZ) each have been granted permission to operate 2x-weekly flights.
Regarding cross-strait cargo flights, (CEA) subsidiary, China Cargo Airlines (CKK), (GUN), and Air China Cargo (CAO) have been selected. (CKK) and (GUN) each are expected to operate 10x-monthly flights from Shanghai and Guangzhou respectively, while (CAO) is expected to operate 5x-monthly flights from both Shanghai and Guangzhou.
(SHZ) plans to launch Kunming Airlines in January in the capital of Yunnan Province. Preparations for Kunming Airlines' launch have been underway since 2004 and (SHZ) gained (CAC) approval in 2005. But for various reasons, the preparations were suspended for some time, before being revived earlier this year when (SHZ) came forward to say it would be the controlling stakeholder. (SHZ) also will provide airplanes and Maintenance Repair & Overhaul (MRO) support.
Kunming Airlines Chairman Wang Qingmin noted that the carrier will launch with 3 airplanes, with plans to grow the fleet to 10 in 2009, 30 to 40 in 2010, 80 to 100 by 2015, and 150 to 200 by 2022. It eventually will open additional operating bases in Xi'an, Guangzhou, Tianjin, and Hangzhou.
Located in SW China, Yunnan is home to numerous resorts and is a popular tourist destination. Kunming Airlines will not be without competition; Hainan Airlines (HNA) signed a cooperative agreement with the Yunnan government in June to launch Yunnan Airlines, which will be comprised mainly of the assets of Lucky Air (LKY).
(SHZ) launched 4x-weekly, Nanning to Singapore service.
December 2008: 737-8AL (35088, B-5410), (BOC) Aviation (SIL) leased.
January 2009: A320-214 (3756, B-6550) delivery.
February 2009: Shenzhen Airlines (SHZ) reported +CNY26 million/+$3.8 million in net earnings in 2008, its 15th consecutive full-year profit. It earned +CNY640 million in 2007. (SHZ) credited "effective cost control" for the result, which contrasts with heavy losses reported by other Chinese carriers. Last year, it reduced operating expenses by -CNY714 million. Industry analysts suggested that a lack of fuel hedges contributed to its success. China Eastern Airlines (CEA) and Air China (BEJ) suffered losses of -CNY6.2 billion and -CNY6.8 billion respectively, resulting from December 31 write downs in the value of their fuel hedges.
(SHZ)'s 2008 operating revenue climbed +26.4% year-over-year to CNY13.07 billion. Passenger boardings jumped +24.1% to 12.1 million, while cargo volume rose +10.3% to 279,700 tonnes. Looking ahead, (SHZ) said it does not intend to cut workers or salaries. (SHZ) launched its Kunming Airlines (KMG) subsidiary this month, plans to establish its Hunan branch company by year end, and continues to prepare for the launch of its Ningxia Airlines subsidiary.
(SHZ) announced the launch of "Flightcrew Resources International," which recruits foreign pilots (FC) and leases them out to Chinese airlines suffering from shortages. It said the subsidiary will be "an important bridge for Chinese airlines to access [the] international flight crew (FC) market." It said it has employed >200 foreign pilots (FC).
Undeterred by the operating environment that has resulted in steep losses at Chinese carriers, (SHZ) went ahead with the launch of its Kunming Airlines (KMG) subsidiary on February 15 as it searches for a foothold in the Yunnan market. The new venture has registered capital of CNY80 million/$11.7 million, with Shenzhen holding an 80% stake. Private investor Wang Qingmin will take the remaining 20% with a CNY16 million investment.
(KMG)'s inaugural flight consisted of a Kunming to Changsha to Harbin routing. It initially operates 2 737-700s and 1 737-800 provided by (SHZ), which also provides cabin crew (FC)/(CA) and Maintenance, Repair & Overhaul (MRO) support.
(SHZ) has ambitious plans for Kunming. (KMG) will operate 10 airplanes by year end on 10 domestic routes, 30 to 40 airplanes by the end of next year, 80 to 100 by 2015, and 150 to 200 by 2022.
Located in SW China, Yunnan is home to numerous resorts and is a popular tourist destination. (KMG) will face competition. China Eastern Airlines (CEA), which boasts the largest share (39.5%) of the Yunnan market, plans to turn its provincial branch company into a separate subsidiary by selling shares to the Yunnan government. Hainan Airlines (HNA) signed an agreement with the provincial government last June to launch Yunnan Airlines, which will be comprised mainly of the assets of Lucky Air (LKY), which accounts for a 9.6% share of the market.
SEE ATTACHED ARTICLE - - "SHZ-FEB09-A/B/C."
March 2009: Shenzhen Airlines (SHZ) trying to make its namesake city in SE China a hub for journeys to the (ASEAN) region, will add nonstop 737-800 service to Bangkok later this month. (SHZ) the privately controlled carrier, partly owned by Air China (BEJ), also hopes to take some traffic from neighboring Hong Kong. (SHZ) already serves Kuala Lumpur, Jakarta, Singapore and Ho Chi Minh City, not to mention Seoul and Osaka in NE Asia. (SHZ)’s 3 busiest markets after Shenzhen, are Guangzhou, Nanjing and Wuxi.
(SHZ)'s subsidiary, Kunpeng Airlines is expected to replace Shandong Airlines (SHG) as the operator of the 1st ARJ21-700, which is scheduled to obtain its domestic airworthiness certificate next year. A (SHZ) spokesperson said that the 1st ARJ21-700 will be delivered to Kunpeng in the 2nd half of 2010. (SHZ) ordered 100 ARJ21s at the end of 2007. In an effort to boost ARJ21 sales, Commercial Aircraft Corporation of China (CACC) (CCC) Vice Managing Director and the chief designer of China's large commercial airplane, Wu Guanghui called on Beijing to subsidize domestic carriers purchasing the ARJ21. The airplane has received 208 orders, 181 of which have come from China.
The country's ambition to manufacture a 150-seat "trunk liner" also is making progress, Wu said, claiming that ARJ21 production is helping lay a foundation for "new technological breakthroughs" that will be applied to the larger jet. He said the trunk liner will be flying in 8 years, that a feasibility study has been completed and that (CACC) "is working on some key technological problems." He told the state "Xinhua" news agency that the airplane will be named the C919. The (CCC) hopes that global Original Equipment Manufacturer (OEM)s will join with Chinese firms in bidding to supply the trunk liner's engines, avionics and production materials in order to improve the level of Chinese airplane manufacturing. "Initially, we will choose some foreign products, such as airplane engines, but we will also try to produce them by ourselves gradually," Wu said. (AVIC) recently launched a commercial engine company in Shanghai that is expected to be responsible for producing the C919's engines down the line.
737-87L (35532, B-5411), delivery with new livery.
SEE PHOTO - - "SHZ-737-87L-MAR09."
April 2009: Shenzhen Airlines (SHZ) reported a 1st-quarter net profit of +CNY160 million owing to a strong rebound in the domestic market; the year-ago result was not available and the carrier did not disclose its 1st-quarter revenue, expenses, passenger or cargo traffic. Owing to double-digit growth in the domestic market, Chinese carriers posted a collective net profit for the quarter of +CNY1.78 billion, according to the (CAAC) (CAC).
(SHZ) achieved an annual profit of +CNY26 million in 2008 and expects to improve its financial performance this year as domestic demand continues to rise. In an effort to exploit that growth, it signed an agreement with the Chongqing municipal government to help construct a logistics hub for western China.
(SHZ) is expected to establish a branch company for its Jade Cargo International (JDC) subsidiary in Chongqing, from which it plans to open the 1st international cargo route in July. It will reconfigure some 737 passenger airplanes into freighters despite the fact that Chinese carriers are suffering from a continuing downturn in the cargo market. Freight volume hit a historic low of 264,334 tonnes in January, off -29% year-over-year.
On the passenger front, (SHZ) hopes to enhance its position in Shenyang and is expected to add 6 more airplanes by year end. It plans to launch service from Shenyang to Qingdao, Xiamen, Sanya, Ningbo, Nanchang, Changsha, Nanjing, Hefei, Haikou, Guilin, Lijiang, Kunming, Chengdu, Lanzhou, Xian and Taiyuan and open new international routes to SE Asia and Russia. It established its Shenyang branch company in April 2006. It currently operates 4 737s.
2 A320-214s (3848, B-6590; 3855, B-6566), deliveries.
May 2009: 2 737-87Ls (35533, B-5412; 35535, B-5413), and 2 A320-214s (3887, B-6567; 3898, B-6568), deliveries.
June 2009: China Eastern Airlines (CEA) has partnered with the Yunnan provincial government to launch a joint venture based on (CEA)'s Yunnan branch subsidiary that will endeavor to build Kunming into a regional hub. (CEA) is expected to sell a stake in the branch company to the government, although it is widely speculated that (CEA) will remain the controlling shareholder.
In February, (CEA) Chairman Liu Shaoyong noted that the Shanghai-based carrier is looking to buttress its network with regional hubs at Kunming and Xi'an. Its Yunnan branch commands 45% of the provincial market and was profitable in the 1st quarter, although it did not disclose that figure. The new venture will face competition. Hainan Airlines (HNA) signed an agreement with the provincial government last June to launch Yunnan Airlines (YUN). It will be comprised mainly of the assets of Lucky Air (LKY), which accounts for 9.6% of the market.
Shenzhen Airlines (SHZ) launched Kunming Airlines (KMG) on February 15 and is looking at expanding its fleet to 10 airplanes by year end operating 10 domestic routes. It hopes to be operating 30 to 40 airplanes by the end of 2010, 80 to 100 by 2015, and 150 to 200 by 2022. It currently operates 2 737-700s and 1 737-800 provided by Shenzhen (SHZ).
(SHZ) is taking advantage of the upturn in Chinese domestic demand and is ramping up its expansion, announcing an agreement with the Harbin municipal government to establish a branch company in the NE city. (SHZ) will add 9 airplanes to its Harbin base and plans to operate 12 by 2016. It will expand its domestic network to include Xi'an, Dalian and Sanya among other cities, and also will fly to Russia. It launched a branch company in Nanjing in March and in Xinning last month, and plans to establish branches in Chengdu and Changcha by year end. The strategy has proven rewarding as (SHZ) earned a +CNY200 million/+$29.2 million profit through the 1st 4 months of 2009. "We are confident that we will report a net profit this year owing to the drop in fuel price," Chairman, Li Kun said. (SHZ) reported +CNY28 million in net earnings last year.
(SHZ) sold its 46% stake in Yalian Business Jet Company, launched in 2007 to New Epoch Leasing Company for CNY66 million.
International Aero Engines (IAE) announced the delivery of (SHZ)'s 1st (V2500)-powered airplane in Toulouse, the 1st of 28 A320s ordered last summer.
A320-214 (3935, B-6571), delivery. A320-232 (B-6388), Dragon Leasing leased (1st airplane assembled in China).
SEE PHOTO - - "SHZ-A320-232-JUN09."
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 14x-weekly flights each.
On the cargo front, Air China Cargo (CAO) was assigned 10x-weekly flights to Taipei from Shanghai and Guangzhou, while (CEA) subsidiary China Cargo Airlines (CKK) was assigned 8x-weekly flights from Shanghai to Taipei and China Southern (GUN) was assigned 10x-weekly flights from Guangzhou to Taipei.
A320-214 (3971, B-6565) delivery.
August 2009: A320-214 (3698, B-6563) delivery.
September 2009: Starts flights from Shenzhen to Singapore, plus Quanzhou (in Fujian province near Taiwan).
SEE ATTACHED - - "SHZ-MAP" to Manila. Has applied to fly to Osaka from Sanya.
737-87L (35536, B-5441) and A320-214 (4028, B-6589), deliveries.
November 2009: Shenzhen Airlines (SHZ) plans to sell a partial stake in its Kunpeng Airlines subsidiary to the Henan government in order to raise funding for the troubled regional carrier. "We are still negotiating with the Henan provincial government on how much of a stake to sell and at what price to sell," a (SHZ) spokesperson said. Kungpeng may change its name to Henan Airlines as part of the deal. Kunpeng was launched by (SHZ) and Mesa Air Group in October 2007. It originally was based in Xi'an but moved to Zhengzhou, capital of the Henan Province in August 2008. It has been operating at a loss since launch, and Mesa concluded the sale of its 49% stake to (SHZ) in the spring.
December 2009: Shenzhen Airlines (SHZ) earned net income of +CNY500 million/+$73.1 million through the 1st 11 months of 2009, President Li Kun said, as it signed a financing agreement with the Industrial and Commercial Bank of China covering purchase of 15 737-800s worth CNY5 billion. (SHZ) currently operates 33 737-800s in its fleet of >130 airplanes and expects to introduce 10 airplanes annually over the next few years. Li Kun has been in charge since controlling stakeholder Li Zeyuan was arrested last month and vowed to maintain stability at (SHZ). Meantime, Air China (BEJ) Finance Director Li Youqiang was appointed Shenzhen (SHZ)'s Chief Accountant, deepening speculation that (BEJ) is planning a takeover. (BEJ) Senior VP Fan Cheng took over as (SHZ)'s Communist Party Secretary earlier. (BEJ) is (SHZ)'s 2nd-largest stakeholder at 25%.
(SHZ) promised to maintain its operational stability following the recent arrest of controlling stakeholder Li Zeyuan, who was accused of economic crimes. (SHZ) President Li Kun has taken charge of (SHZ) in the interim. Launched in 1995, (SHZ) originally was a state-owned airline but was privatized when the Shenzhen Huirun Group and the Shenzhen Yiyang Group purchased a 65% share in May 2005. Li Zeyuan holds 89% of Huirun.
The (CAAC) (CAC) and Air China (BEJ), which holds a 25% stake in Shenzhen Airlines (SHZ), have sent a working group to (SHZ) to help maintain stability. It is widely speculated that (BEJ) will seize the opportunity to increase its share, but (BEJ) has refused to comment. Citigroup pointed out that if (BEJ) raises its stake in (SHZ) to 90% by acquiring the 65% controlled by Li Zeyuan, its national market share would equal that of the merged China Eastern Airlines (CEA) and Shanghai Airlines (SHA). In addition, "(BEJ)'s 30% [Cathay Pacific Airways (CAT)] stake and 90% Shenzhen (SHZ) stake could elevate its competitiveness to an unprecedented level," Citi said. Shenzhen ranks 5th among Chinese carriers with a fleet of 84 airplanes. It transported 12 million passengers last year.
Air China (BEJ) Senior VP Fan Cheng was named Communist Party Secretary at Shenzhen Airlines (SHZ), increasing speculation in China that (BEJ) will seek control of (SHZ) following the arrest of controlling shareholder Li Zeyuan. Fan reportedly will oversee day-to-day operations at (SHZ), in which (BEJ) currently holds 25%.
January 2010: China Southern Airlines (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 S 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."
(SHZ) said it has not had formal discussions regarding the stake with (GUN). (SHZ) is 1 of China's most profitable airlines. It was +CNY500 million/+$73.1 million in the black through the 1st 11 months of 2009.
(GUN) has a branch company at Shenzhen Bao'an International airport that is the 2nd-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 5 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 2 major executives to (SHZ) in recent months. (SHZ) VP Zhang Siping has reiterated several times that the municipal government intends to support (SHZ)'s status as an independent carrier. The government holds 10%.
A320-214 (4010, B-6570) and A320-232 (4176, B-6613) deliveries.
February 2010: Shenzhen Airlines (SHZ) earned a net profit of +CNY500 million/+$73.1 million last year, nearly 20 times the CNY26 million surplus posted in 2008. (SHZ) did not reveal its revenue and expense figures. It transported 15.1 million passengers in 2009, up +27.8%, and enjoyed a +22% jump in cargo traffic to 306 million (FTK)s. It introduced 14 new airplanes last year, increasing its fleet to 136, and opened 50 new routes.
Last month, (SHZ) was granted 4 additional weekly frequencies across the Taiwan Strait for use during the 2-week Chinese New Year period. The Shenzhen to Taipei service is 1 of the most profitable cross-strait routes. (SHZ) and China Southern Airlines (GUN) each operate the route, and (SHZ)'s load factor reached nearly 90% LF.
(GUN) and Air China (BEJ) remain interested in the 65% stake in (SHZ) held by Li Zeyuan, who was arrested in November. It is China's 5th-largest airline after (BEJ), (GUN), China Eastern Airlines (CEA) and Hainan Airlines (HNA), controlling a 6% share of the passenger market. (BEJ) holds 23%, (CEA) 24% and (GUN) 29%. If either (GUN) or (BEJ) takes control of (SHZ), the Chinese industry could shift significantly.
A320-232 (4214, B-6615), delivery.
March 2010: Shenzhen Airlines (SHZ) (CEO) Li Kun was arrested for alleged financial irregularities, allowing Air China (BEJ) to deepen its involvement in the country's 5th-largest carrier through the appointment of (SHZ) Vice Chairman and former (BEJ) VP Fan Cheng as acting (CEO).
Li formerly was Vice General Manager of China Southern Airlines (GUN) and became (CEO) of (SHZ) in 2005 following its privatization. Li Zeyuan, who outbid (BEJ) and purchased a 65% share of Shenzhen (SHZ) at that time, then was arrested under similar circumstances last November. Li Zeyuan's legal trouble prompted a tussle for control of (SHZ) between (BEJ) and (GUN).
(BEJ) currently holds 25% of (SHZ) and has been angling to increase its share for some time. Following Le Zeyuan's arrest, (BEJ) named Fan as (SHZ)'s Vice Chairman, and (BEJ)'s Finance Director Li Youqiang to the same role at Shenzhen (SHZ).
Industry analysts have said that Li Zeyuan's stake may be split between (BEJ) and the Shenzhen municipal government, which now holds 10% of the airline. It has been reported that the government also is keen to increase its participation (SHZ). Vice Mayor Zhang Siping noted at the end of last year that the "Shenzhen municipal government will support (SHZ), as always, no matter what. It won't change that (SHZ) will remain an independent company and there won't be big layoffs."
Later, Air China (BEJ) will boost its profile in the Pearl River Delta region by taking control of (SHZ) with a CNY682.1 million/$99.8 million investment that will see its stake in the country's 5th-largest carrier rise from 25% to 51%.
The Shenzhen municipal government will increase its share from 10% to 25% with a CNY348 million investment, and controlling stakeholder Li Zeyuan's 65% will fall to 24%, according to (BEJ)'s filing with the Hong Kong Stock Exchange and pending approval from Beijing.
Industry analysts expected (BEJ)'s takeover and have pointed out that the price undervalues Shenzhen (SHZ)'s shares. (SHZ) has claimed it has been profitable for 16 consecutive years and said it was -CNY500 million in the black through the 1st 11 months of 2009.
But (BEJ) told a different story in its filing. It claimed that (SHZ) suffered a 2009 loss of -CNY863.7 million, which followed a 2008 deficit of -CNY31.3 million. A debt of CNY24.45 billion exceeded total capital of CNY22.39 billion, (BEJ) said. "Although Shenzhen (SHZ)'s current financial performance is not good, we still want to be its controlling stakeholder as we are confident of its prospects and the synergies that can be achieved between Shenzhen (SHZ) and us," (BEJ) explained in its filing.
Li Zeyuan, along with former Chairman Li Kun, were placed under arrest for unspecified financial crimes recently, placing (SHZ)'s fate in question and allowing (BEJ) to step in.
(BEJ) plans to deepen its cooperation with (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) to (SZX) is 1 of China's most profitable business routes. (BEJ) operates 9x-daily services, while (SHZ) operates 6x-. 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) to (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 S China market to 43%. (GUN) holds 30%.
A320-232 (4159, B-6648), delivery.
May 2010: Air China (BEJ) appointed former (BEJ) President Cai Jianjiang Chairman of Shenzhen Airlines (SHZ), signaling that its plan to take control of (SHZ) is coming to fruition.
2 A320-232s (4208, B-6649; 4300, B-6650), deliveries.
June 2010: China's big 3 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.
August 2010: Shenzhen Airlines (SHZ) announced that it had an operating profit of CNY520 million ($79 million) in the 1st half, crediting strong domestic market demand growth and its merger with Air China (BEJ) for the result.
(BEJ) this year boosted its profile in the Pearl River Delta region by taking control of Shenzhen (SHZ) with a CNY682.1 million investment that raised its stake in the country's 5th-largest carrier from 25% to 51%.
(SHZ)'s 1st-half 2009 financial figures are not readily available for year-to-year comparisons. But when announcing its takeover, (BEJ) said that (SHZ) suffered a full-year 2009 loss of -CNY863.7 million that followed a 2008 deficit of -CNY31.3 million.
(SHZ) transported 8.18 million passengers in the 6 months ended June 30, up +17% over the year-ago period, while cargo traffic volume climbed +22.3% to 102,400 tonnes.
(SHZ) said it signed a purchase agreement with Airbus (EDS) for 10 A320s. The A320 order is worth $814 million at list prices, to boost its capacity in the southeast and southern parts of China. The 10 A320s are expected to be delivered in 2012 and 2013. Currently, (SHZ) operates a fleet of 109 airplanes. “We aim to expand (SHZ)'s fleet to 180 by 2015," (BEJ) Chairman Kong Dong said. He explained that "100 airplanes will be operated in Shenzhen airport as its 2nd runway is scheduled to be operational next year, while the rest of the airplanes will be allocated to (SHZ)’s other domestic bases" comprising Nanning, Wuxi, Guangzhou, Changzhou, Shenyang, and Zhengzhou.
Looking ahead, (SHZ) said it expects to reap benefits from the continued growth of domestic traffic. It plans to introduce 5 new airplanes in the 2nd half of this year and 11 next year.
A320-232 (4409, B-6691), ex-(D-AVVE), delivery.
September 2010: The (CAAC) (CAC), which has been conducting widespread safety inspections of China's airlines in the wake of last month's Henan Airlines Embraer E190 crash that killed 42, confirmed that an investigation carried out in 2008 to 2009 revealed that >200 pilots (FC) had falsified their resumes. Of these, 103 were employed by Shenzhen Airlines (SHZ), parent of Henan Airlines. The (CAAC) noted that the vast majority of the pilots (FC) had been suspended, however, it added that this did not mean the problem had disappeared which is why it initiated a new round of investigations into pilot (FC) qualifications.
In addition to pilots (FC), the (CAAC) is also investigating airplane mechanics (MT), flight instructors and other aviation personnel and vowed to punish any disqualified personnel. In a recent meeting on the crash aftermath, (CAAC) Minister Li Jiaxiang called on Chinese carriers to "slow down pursuing commercial profit appropriately [and] give priority to improving safety level[s]."
In the crash aftermath, the Henan provincial government ordered the carrier to change its name back to Kunpeng Airlines to minimize damage to its image.
A320-232 (4407, B-6692), delivery, ex-(F-WWDS).
November 2010: Air China (BEJ), including its Shenzhen Airlines (SHZ) subsidiary, is now code sharing on cross-Strait flights with Taiwan’s (EVA) Air, including its regional member Uni Air (MAK). The cities involved are Beijing, Chongqing, Hangzhou, Shanghai, Shenzhen, and Tianjin, all from Taipei (mostly Taoyuan airport but also the more conveniently located Songshan airport for flights to Shanghai’s own close-in Hongqiao airport). Soon Air China (BEJ)’s Shandong Airlines (SHG) unit will also join in, adding Taipei to Qingdao flights to the list. Though Air China (BEJ) and (EVA) signed an interline pact for Taiwan-mainland passengers traveling through Hong Kong or Macao as early as 1995, the new arrangement enables (EVA) to promote Taiwan as a connecting hub into and out of the mainland for North American passengers.
January 2011: Shenzhen Airlines (SHZ) has put Huirun Investment Company’s 24% stake open for bid as part of Huirun’s court-ordered bankruptcy liquidation. According to the Shenzhen Guangpeng Accounting Firm, Huirun had total debt of CNY4.01 billion/$608.2 million, while its total capital was worth CNY1 billion, prompting a Shenzhen local court to rule that its 24% stake in the Shenzhen-based carrier must be sold to pay off its debts. Huirun owner, Li Zeyuan was arrested for unspecified economic crimes in November 2009.
Huirun used to be the controlling stakeholder with a 65% stake, while Air China (BEJ) and Quancheng Logistics Company held 25% and 10%, respectively, before Li Zeyuan was arrested. But (BEJ) took control of the country’s fifth largest carrier with a CNY682.1 million investment that increased its stake to 51%. Quancheng added its investment of CNY350 million to boost its stake to 25% in March 2010, which diluted Huirun’s stake in the carrier to 24%.
(BEJ) refused to comment on whether it would make a bid. “Huirun’s 24% stake in (SHZ) should be decided by a [Shenzhen] local court and bankruptcy supervisory committee. We don’t want to make any comment on this issue,” (BEJ) Board Secretary Huang Bin noted.
Industry analysts pointed out that other domestic carriers are unlikely to make bids, as (SHZ) is a subsidiary of (BEJ), but noted the Shenzhen local government may be a possible candidate to increase its control of (SHZ).
February 2011: (WASINC) International, a flight crew (FC) leasing company is recruiting pilots (FC) for Shenzhen Airlines (SHZ). See (WASINC) for more details.
April 2011: Air China (BEJ) is pressing ahead with requiring its majority-owned subsidiary, Shenzhen Airlines (SHZ) to join the Star Alliance (SAL). The Star Alliance (SAL) is still evaluating (BEJ) and there is no specific timetable for a formal agreement.
(BEJ) formally joined the (SAL) alliance at the same time as Shanghai Airlines (SHA) at the end of 2007, but (SHA) terminated its membership last October following its merger with China Eastern Airlines (CEA). After (SHA)'s departure, the (SAL) alliance faced a reduction of its route network in China and is reportedly exploring ways to fill the void.
(BEJ) became the majority shareholder of (SHZ) when it increased its stake from 25% to 51% in March 2010, a move that enhanced (BEJ)’s position in prosperous S China. (SHZ)’s pending Star (SAL) alliance membership would help to fill the (SAL) alliance's network gap in China.
Most of (SHZ)'s routes are domestic; it operates 4 international routes from Shenzhen to Ho Chi Minh, Seoul, Osaka, and Kuala Lumpur. As of December 31, 2010, (SHZ) operated a fleet of 99 narrow bodies comprising 5 A319s, 38 A320s and 56 737s. " (BEJ) has decided to [gradually] open more international routes for Shenzhen Airlines (SHZ).
May 2011: Shenzhen International Total Logistics Company, a subsidiary of government-controlled Shenzhen International Holdings, purchased a 24% stake in Shenzhen Airlines (SHZ) for CNY789 million/$121.4 million, increasing its holding in carrier to 49% from 25%. The stake was previously held by Huirun Investment Company and put up for bid earlier this year as part of Huirun’s court-ordered bankruptcy liquidation.
Air China (BEJ) took control of (SHZ) in April 2010 with a CNY682.1 million investment that increased its ownership in the country's fifth-largest carrier to 51% from 25%. At that point, Total Logistics increased its stake from 10% to 25% with a CNY348 million investment; while the share held by controlling stakeholder Huirun, represented by Li Zeyuan, fell from 65% to 24%. Li was arrested for unspecified economic crimes in 2009.
It is noteworthy that (BEJ)’s CNY682.1 million investment in March 2010 for a 26% stake in (SHZ) was less than Total Logistics’ CNY789 million price tag for 24%, owing to (SHZ)’s improved balance sheet since (BEJ)’s takeover. Total Logistics noted (SHZ) posted a profit of +HK$143 million/+$18.4 million from April 19, 2010 to December 31, 2010 when it was controlled by (BEJ).
June 2011: Shenzhen Airlines (SHZ) is a provincial airline primarily serving domestic trunk routes from its base at Shenzhen and from hubs on Guangzhou, Jiangsu, Nanning, Shandong, Shenyang, Wuxi, Yunnan, and Zhengzhou, which are operated by branch companies and extend the network to the east, south and NE of China.
(IATA) Code: ZH - 479. (ICAO) Code: CSZ (Callsign - SHENZHEN AIR).
Parent organization/shareholders: Air China (BEJ) (51%); Shenzhen Municipal government (Total Logistics) (25%); and Shenzhen Huirun Investment/Bright Oceans Corp (24%).
Airline subsidiaries/shareholdings: Henan Airlines (100%); Jade Cargo International (JDC) (51%), and Kunming Airlines (KMG) (80%).
Alliances: All Nippon Airways (ANA); Asiana Airways (AAR); Shandong Airlines (SHG); and UNI Air (MAK).
Main Base: Shenzhen Baoan Airport (SZX).
Hub: Harbin Yan Jiagang Airport (HRB).
Domestic, Scheduled Destinations: Beihai; Beijung; Changchun; Changde; Changsha; Changzhou; Chengdu; Chongqing; Dalian; Fuzhou; Guangzhou; Guilin; Guiyang; Haikou; Hangzhou; Harbin; Hefei; Hohhot; Huangyan; Jinan; Jingdezhen; Kunming; Lanzhou; Lijiang; Nanchang; Nanking; Nanning; Qingdao; Sanya; Shanghai; Shenyang; Shenzhen; Shijiazhuang; Taiyuan; Tianjin; Tunxi; Urumqi; Wenzhou; Wuhan; Wuxi; Wuyishan; Xiamen; Xi'An; Xiangfan; Yichang; Yinchuan; Yun Cheng; Zhanjiang; & Zhengzhou.
International, scheduled destination: Kuala Lumpur; & Seoul.
July 2011: Shenzhen Airlines (SHZ) signed a Memo of Understanding (MOU) with the Star Alliance (SAL) and is expected to formally join the global airline grouping in the 2nd half of 2012.
Parent, Air China (BEJ) said that (SHZ)’s Star Alliance (SAL) membership will help (SHZ) attract more transfer passengers. It noted that (BEJ) reported CNY1.75 billion/$270.3 million in additional operating revenue in 2010 through its cooperation with (SAL) member carriers.
(SHZ) President Feng Gang pointed out that being a (SAL)) Alliance member will enable (SHZ) to further explore the international market. (BEJ) Chairman, Kong Dong said that (SHZ) plans to launch more international routes. To accommodate the new routes, (SHZ) is scheduled to expand its fleet from 100 airplanes currently to 171 by 2015. (SHZ) is slated to introduce 19 new airplanes while phasing out nine airplanes this year.
(SHZ)’s membership will also enable the Star (SAL) Alliance to enhance its position in prosperous S China. Addressing the (SAL) Alliance’s weak representation in the Shanghai market, Kong said that Air China (BEJ) would try to overcome a “slot shortage” at Shanghai Pudong by allocating more long-haul airplanes for international flying. It also plans to boost flight frequencies from Shanghai Hongqiao over the next 5 years. (SHZ) will add 5 new destinations to the (SAL) Alliance’s network in China: Juzhou (Zhejiang Province), Linyi, Qinhuangdao, Shijiazhuang, and Zhoushan.
(BEJ) joined the (SAL) Alliance in December 2007; Shanghai Airlines (SHA) withdrew from the (SAL) Alliance in October 2010 to pave the way for it to join the SkyTeam (STM) Alliance with parent company, China Eastern Airlines (CEA) last month. China Southern Airlines (GUN) joined the SkyTeam (STM) Alliance in November 2007.
Shenzhen Airlines (SHZ) subsidiary, Henan Airlines, which has been grounded since a fatal Embraer E190 crash in August 2010, is expected to resume operations soon. As part of Henan's restructuring, (SHZ) is negotiating to sell all or part of its 51% stake in the carrier to Henan Coal Chemical Industry Group.
Henan changed its name last year from Kunpeng Airlines (KPG), which launched in 2007 as a joint venture (JV) between (SHZ) and Mesa Air Group. But Phoenix-based Mesa sold its holding to (SHZ) in 2009 and the Henan provincial government moved in to take the stake, leading to the name change.
(SHZ) is negotiating with Henan Coal Chemical Industry Group about the specifics of (SHZ)'s restructuring plan. After both sides reach an agreement, Henan is expected to resume operations. It has not flown since the E190 crash last August that killed 42 and injured 54 at Yichun airport.
Air China (BEJ) became the majority shareholder in Shenzhen (SHZ) when it increased its stake from 25% to 51% in March 2010 and has been steadily cutting or integrating Shenzhen's subsidiary companies.
October 2011: 2 A319-112s (2905, B-6159; 2935, B-6165), (AWW) leased. A320-232 (4897, B-6807), ex-(D-AVVH) delivery.
November 2011: 2 737-87Ls (39151, B-5618, 2011-11;39152, B-5619 - - SEE PHOTO - - "SHZ-737-89L - 2011-11"), and 1 A320-232 (4920, B-6833), ex-(F-WWIB) deliveries.
January 2012: Jade Cargo International (JDC) announced it has “temporarily suspended” all operations due to “overall weak demand.”
(JDC) said the suspension “will also provide the shareholders with an opportunity to coordinate with stakeholders to continue with the restructuring of the company’s financial structure.”
According to several German media outlets, (JDC) will ground its fleet of 6 747-400ERF freighters and does not have enough money to buy fuel.
(JDC), which was founded in October 2004 as a joint venture (JV) between Shenzhen Airlines (ZHZ) (51%), Lufthansa Cargo (LUB) (25%) and the German development finance institute (DEG) (24%), has faced continuous financial difficulties. According to reports, Air China (BEJ) (which took over (ZHZ)) is considering selling its 51% share.
(LUB) Chairman & (CEO) Karl Ulrich Garnadt said in November that (JDC) "would not survive" a massive market downturn in its current fiscal state and was considering selling its holding.
(WASINC) International, a crew leasing company is recruiting Flight Crew (FC) pilots for Shenzhen Airlines (SHZ). Applicants can view minimum qualifications, competitive pay and benefits package offered and contract details for each carrier by going to www.wasinc.aero. See FltOps.com and FAPA.aero.
A320-232 (4986, B-6835), ex-(D-AVVS), (5002, B-6857), ex-(D-AVVW), deliveries.
February 2012: The fate of Jade Cargo International (JDC), a Lufthansa Cargo (LUB)/Shenzhen Airlines (ZHZ) joint venture (JV) that temporarily suspended operations on December 31, will be decided by the end of the 1st quarter.
(LUB) Chairman & (CEO) Karl-Ulrich Garnadt said that (JDC)’s air operator’s certificate (AOC) remains and all salaries for employees have been paid. He said (JDC)’s 6 747-400Fs are grounded and will be maintained. “This is the best thing we can do regarding that situation,” he said.
Garnadt said that (LUB) is trying to sell its shares, “but I cannot tell you how this will end.” He said that bankruptcy could not be ruled out.
(JDC), founded in October 2004 as a joint venture (JV) between (SHZ) (51%), (LUB) (25%) and the German development finance institute (DEG) (24%), has faced continuous financial difficulties.
Garnadt said that cargo routes to Asia will remain the most important market for (LUB), as 50% of its business goes to Asia. “Even we realized a drop in demand in markets like South Korea. In Hong Kong we saw a double-digit drop.” China has been affected, he said, “but in China there had been too much capacity.” Nevertheless, Garnadt said (LUB) has been able to increase sales from Europe to Asia by +22%. “This reduced some of the losses,” he said.
June 2012: Shenzhen Airlines (SHZ) is expected to end its partnership with Henan Airlines (KPG) by disposing of its 51% stake in (KPG), which suspended operations after a fatal crash in August 2010.
Government-controlled Henan Civil Aviation Development Investment Company plans to take over (KPG) with a 70% stake through a reorganization plan, paving the way to relaunch operations by year end. It is widely reported that after (KPG)’s relaunch, it will focus mainly on cargo operations, pending government approval.
October 2012: Shenzhen Airlines (SHZ) resumed services on the 2,600 km route from Shenzhen airport (SZX) in the S Chinese province of Guangdong to Singapore airport (SIN). (SHZ), which previously operated the route between September 2009 and 2010, now offers daily frequencies on the route, all of which are operated using 737-900s. Competition on the route comes from 2 Singapore-based carriers: Tiger Airways (TGR) and SilkAir (SLK), which offer 5x- and 4x-weekly flights, respectively.
November 2012: Shenzhen Airlines (SHZ) joined the Star Alliance (SAL) on November 29 becoming the (SAL) Alliance’s 27th member. (SHZ) is the (SAL) alliance's 2nd Chinese carrier after (SHZ) majority shareholder, Air China (BEJ) which holds 51% in the new (SAL) alliance member. (BEJ) became a (SAL) Alliance member in December 2007. Air China (BEJ) was (SHZ)’s mentor for the joining process. (SHZ) is China’s 5th largest carrier.
SEE ATTACHED - - "SHZ-2012-11 - STAR ALLIANCE MEMBER" WITH HOSTESSES IN UNIFORMS OF ALL STAR (SAL) ALLIANCE AIRLINE MEMBERS.
By joining the (SAL) Alliance, (SHZ) hopes to accelerate the pace of its international expansion as well as strengthen the alliance position in China and across Asia. (SHZ) will add some +400 daily flights to 70 (SAL) Alliance destinations, including 5 new cities for the (SAL) alliance: Juzhou, Linyi, Qinhuangdao, Shijiazhuang, and Zhousan. (SHZ) operates bases in Shenzhen and Guangzhou.
“Our customers now benefit from improved access throughout the economical Pearl River Delta and across S China. I feel pretty good with the [Star (SAL) Alliance] network in China,” (SAL) Alliance (CEO) Mark Schwab said.
Taiwan-based, (EVA) Air is expected to join the (SAL) Alliance in June 2013.
Shenzhen Airlines (SHZ) operates 116 passenger and cargo airplanes, comprising 5 A319-100s, 53 A320-200s, 2 737-300s, 4 737-700s, 49 737-800s and 5 737-900s from its home base and bases at Guangzhou Baiyun (CAN), Nanjing Lukou International (NKG), Nanning Wuxu International (NNG), Shenyang Taoxian International (SHE) and Wuxi Sunan Shuofang International (WUX) airports. By the end of 2015, the fleet should grow from 122 to >170 airplanes by 2015.
(SHZ) is predominantly a domestic carrier only serving Hong Kong Chep Lap Kok International (HKG), Macau International (MFM), Osaka Kansai International (KIX), Seoul Incheon International (ICN), Singapore Changi International (SIN) and Taipei Taoyuan International (TPE) outside mainland China.
March 2013: The Pearl River Delta on China’s south coast is home to 5 airports serving a total of around 140 million passengers in 2012. Shenzhen’s Bao’an International Airport, located <50 km from Hong Kong’s Chek Lap Kok airport (56.5 million passengers in 2012), and <100 km from Guangzhou airport (48.3 million passengers in 2012), handled almost 30 million passengers last year, up almost +5% on 2011. Shenzhen has been developed by the Chinese authorities as a Special Economic Zone and is now home to 1 of the world’s top 10 skyscrapers, the Kingkey 100, designed by UK architecture firm Terry Farrell & Partners.
SEE ATTACHED - - "SHZ-MAP - PEARL RIVER DELTA REGION - 2013-03."
Passenger numbers have grown spectacularly from <7 million in 2000 to almost 30 million in 2012, making it slightly busier than Boston Logan Airport (29.3 million) and Moscow Domodedovo Airport (28.2 million).
SEE ATTACHED - - "SHZ-2013-03 - SHENZHEN AIRPORT GROWTH."
Shenzhen Airport's busiest airline based on current seat capacity is Star Alliance (SAL) member, Shenzhen Airlines (SHZ) (which is a subsidiary of Air China (BEJ)), accounting for around 30% of all flights and seats. China Southern Airlines (GUN), which dominates at nearby Guangzhou, has around one-quarter of all capacity, while China Eastern Airlines (CEA), Air China (BEJ) and Hainan Airlines (HNA) each have a further 10%.
The airport’s route network is dominated by domestic destinations. 11 of the airport’s top 12 routes are served by at least 4 different airlines, with only Zhengzhou served by as few as 3 airlines. On none of the top 12 routes does any single carrier have >45% of weekly frequencies, ensuring that passengers have a healthy choice of airlines to choose from.
SEE ATTACHED - - "SHZ-2013-03 - SHENZHEN AIRPORT ROUTES."
Comparing Official Airline Guide (OAG) schedule data for March 2012 and March 2013, indicated that 17 new services have been launched during the last year, of which 14 were domestic. Thai AirAsia (THA) transferred flights from Bangkok’s main airport (BKK) to its secondary airport (DMK), China Southern (GUN) began 2x-weekly flights to Da Nang in Vietnam, while Shenzhen Airlines (SHZ) resumed daily flights to Singapore. So far, there are no long-haul flights at Shenzhen. This is almost unheard of for an airport that handles close to 30 million passengers per annum.
The airport’s international route network currently comprises just 9 cities in 6 Asian countries. The AirAsia (ASW) group of airlines has a notable presence, operating daily flights to Bangkok, Kota Kinabalu and Kuala Lumpur. The following details these destinations, in which country, and shows the operating airlines (with weekly frequency).
Bangkok (DMK), Thailand: Thai AirAsia (THA) (7);
Da Nang (DAD), Vietnam: China Southern Airlines (GUN) (2);
Kaohsiung (KHH), Taiwan: China Airlines (CHI) (2);
Kota Kinabalu (BKI), Malaysia: AirAsia (ASW) (7);
Kuala Lumpur (KUL), Malaysia: AirAsia (ASW) (14);
Seoul Incheon (ICN), Republic of Korea: Asiana (AAR) (4); Korean Air (KAL) (4); Shenzhen Airlines (SHZ) (7);
Singapore (SIN), Singapore: Shenzhen Airlines (SHZ) (7); Silkair (SLK) (4); Tiger Airways (TGR) (5);
Taichung (RMQ), Taiwan: Uni Airways (MAK) (2);
Taipei (TPE), Taiwan: China Airlines (CHI) (5); China Southern Airlines (GUN) (6); Shenzhen Airlines (SHZ) (8); Uni Airways (MAK) (5).
May 2013: Air China (BEJ) and its subsidiary Shenzhen Airlines (SHZ) have signed deals to buy a total of 100 Airbus (EDS) A320-series planes for 8.85 billion US dollars. In a statement filed to the Hong Kong stock exchange, (BEJ) (listed both in Hong Kong and Shanghai), said it agreed to buy 60 A320-series airplanes for 5.37 billion US dollars, which would be paid by cash in installments. It expects to take delivery of the 60 planes in stages from 2014 to 2020.
(BEJ) subsidiary Shenzhen Airlines (SHZ) agreed to buy 40 A320-series planes for 3.48 billion US dollars, which would also be paid by cash in installments. The 40 planes are expected to be delivered in stages from 2016 to 2020. The transaction will strengthen the fleet capacity of the Air China Group with an increase of about 15.9% based on the number of available tonne km by the end of 2012. In particular, the deal is in line with the market requirements for (BEJ) and will expand the fleet capacity of (SHZ) in S China.
The statement also said Airbus (EDS) had agreed to buy back 6 A340-series airplanes in advance from Air China (BEJ) based on an earlier arrangement.
June 2013: 737-87L (39133, B-5737) and A320-214 (5550, B-9910), deliveries.
July 2013: Shenzhen Airlines (SHZ) added a 4th international destination from its Shenzhen (SZX) hub. Beginning on July 15th, (SHZ), the Star (SAL) Alliance member airline offers 2x-daily flights to Bangkok (BKK), using 164-seat 737-800s. With 742 weekly flights to 49 destinations, (SHZ) is the biggest operator at Shenzhen Airport, which is located just 50 km from Hong Kong’s Chek Lap Kok Airport and handled nearly 30 million passengers last year.
A320-214 (5589, B-9938), ex-(B-509L).
August 2013: According to (FAPA).aero, Shenzhen Airlines (SHZ) is recruiting pilots (FC) through flight crew (FC) leasing companies.
September 2013: SEE ATTACHED - - "SHZ-2013-09-UPDATE-A/B/C/D/E.
November 2013: Shenzhen Airlines (SHZ) launched 10 new domestic services, with the start of its winter schedule on October 27th. (SHZ) said it began Nanning to Zhuhai to Taizhou, Harbin to Zhengzhou to Nanning, Harbin to Taiyuan to Sanya, Changchun to Nanjing to Haikou, Shenyang to Zhengzhou to Haikou, Chengdu to Quanzhou, Wuxi to Xiamen, Fuzhou to Taiyuan, Fuzhou to Jingdezhen to Xian, and Guangzhou to Nantong to Tianjin.
(SHZ) also raised frequencies on the Shenzhen to Nanjing, Shenzhen to Shenyang, Guangzhou to Wuxi, and Guangzhou to Harbin services.
However, it did not specify the frequencies or types of airplane used on the new and increased services.
In addition, (SHZ) extended its Singapore to Shenzhen service to Jinan, while the Bangkok to Shenzhen route is now extended to Fuzhou.
Shenzhen Airlines (SHZ) competes with Thai AirAsia (THA) on the Bangkok to Shenzhen route, and with SilkAir (SLK) and Tigerair (TGR) on the Singapore to Shenzhen route.
December 2013: 737-87L (39139, B-5860), and A320-214 (5766, B-9980), ex-(B-508L) deliveries.
March 2014: The brand new Baoan terminal of the international airport in the southern boomtown of Shenzhen suffered severe flooding and water damage on March 30th after the city was battered by the heaviest rainstorm this year. Several areas in the lower levels of the terminal, which went into operation only 4 months ago, were submerged after the terminal building experienced large-scale water leakage during the March 30th's storms, which wreaked havoc across the Pearl River Delta.
Photos circulating online showed water pouring from the ceilings in scenes described by many passengers as "waterfalls" in different parts of the airport, with escalators, underground parking lots, roads and walkways swamped. Passengers had to roll up their pants or walk bare footed through the flooded areas.
The airport said through its official microblog that the leaks had been stopped and clean-up of the remaining water had been completed. Operations at all of the affected facilities had been resumed, it added. But the water leakage sparked anger from some passengers and online users who questioned if it was a result of substandard construction.
Many online users referred to the airport as a result of "tofu construction," a Chinese term used to describe poor building quality.
Airport officials attributed the difficulty of waterproofing the terminal to the "complicated design of the building," said the "New Express Daily."
The severe weather condition also forced the cancellation of 93 flights and delayed 96 flights by at least 2 hours on March 31st as of 1:30 pm, in addition to the 254 flights cancelled on March 30th, according to the airport's official microblog. An estimated 5,000 passengers were forced to stay overnight at the airport.
Various areas in Shenzhen were deluged on the evening of March 30th due to heavy rainfall, causing traffic congestion across the city. The situation prompted the metropolitan government to issue its 1st city-wide red rainstorm alert since 2008, before extending it to the following afternoon and ordering the closure of all schools in the city.
June 2014: A320-232 (5986, B-1841), ex-(B-5141), delivery.
August 2014: Shenzhen Airlines (SHZ) has added +2 more links to Seoul Incheon (ICN) in South Korea. On August 1st, it began flying 5x-weekly on the 1,666 km routes from Xi’an (XIY) utilizing A320s. Competition comes from Korean Air (KAL) (daily flights) and Asiana Airlines (AAR) (5x-weekly flights). On the same day, (SHZ) also started daily flights on the 481 km route from Yantai (YNT) using 737-800s. This route is already well served by Asiana Airlines (AAR) (2x-daily flights), Chinas Eastern Airlines (CEA) (19x-weekly), Jeju Air (JJA) (3x-weekly flights) and Shandong Airlines (SHG) (daily flights). Until now Shenzhen Airlines (SHZ) had only served Seoul from its main base in Shenzhen.
737-87L (37624, B-1973), delivery.
November 2014: Shenzhen Bao'an International Airport (SZX) registered a year-on-year growth of +13.2% in passenger volume in October, the airport said. The number of passengers traveling through the airport amounted to 3.3 million in the past month, rising +13.2% from the same period for a year earlier. Cargo traffic climbed +8.9% to 85,200 tonnes.
Airplane takeoffs and landings totaled 25,400, up +12.6% from a year earlier, the airport said.
January 2015: 737-87L (40822, B-1755), delivery.
February 2015: Shenzhen Airlines (SHZ) has added 2 new international routes in the last week. On February 1st, (SHZ) launched weekly (Sunday) flights on the 663 km cross-straits route from Nanchang (KHN) to Taipei Taoyuan (TPE) using its 737-800s. China Eastern Airlines (CEA) with 3x-weekly flights and China Airlines (CHI) with 2x-weekly flights, already serve the route. The day before the Star (SAL) Alliance member had introduced daily flights on the 2,408 km route from Xi’an (XIY) to Bangkok Suvarnabhumi (BKK) using its A320s. This route is also already served; in this case by Beijing Capital Airlines (DER) (4x-weekly flights), China Eastern Airlines (CEA) (4x-weekly flights) and Okay Airways (OKA) (2x-weekly flights). Shenzhen Airlines (SHZ) already serves Bangkok’s main airport from Shenzhen (3x-daily) and Shantou (4x-weekly). Fuzhou services begin next week.
March 2015: Shenzhen Airlines (SHZ) flies to 69 airports; Shenzhen to Beijing is its #1 route.
Founded in November 1992, Shenzhen Airlines (SHZ) is a Chinese domestic and international carrier based unsurprisingly at Shenzhen Airport (also known as Shenzhen Bao’an International Airport). On July 6th, 2011, (SHZ) was formally accepted as a future member of Star (SAL) Alliance, while on November 29th 2012, (SHZ) officially joined the (SAL) alliance becoming its 2nd Chinese member at the time, following the departure of Shanghai Airlines (SHA) in 2010 (the 1st Chinese member being Air China (BEJ) as of December 12th, 2007). With nearly 613,000 weekly seats (according to Official Airlines Guide (OAG) Schedules Analyser data for the week commencing March 24th, 2015), (SHZ) has managed to establish itself as the 4th largest operator in China, below Air China (BEJ) (1.3 million seats), but just above Hainan Airlines (HNA) (605,868). As part of its current fleet, (SHZ) operates 153 airplanes, namely 83 737s (74 737-800s, 5 737-900s and 4 737-700s), 65 A320s and 5 A319s.
Analysis of (SHZ)’s current network indicates that the Star (SAL) Alliance member operates to a total of 69 airports. As a matter of fact, (SHZ)’s top 12 airports account for 59% of total departures this March, which is down -3% from the corresponding period last year. Not surprisingly, considering that the airport is its primary hub, Shenzhen is by far the airline’s busiest airport by weekly flights (19%), posting a +11% increase or an extra 78 weekly departures this March, when compared to data from the same period last year. Shenzhen is linked to 54 airports, of which the 1,951 Km sector to Beijing is (SHZ)’s most frequently served route, with 52 weekly departures. Ranking 2nd in terms of weekly flights, Guangzhou (1 of (SHZ)’s operating bases along with Nanjing, Nanning and Shenyang) offers services to 26 destinations.
SEE ATTACHED CHART - - "SHZ-2015-03 - TOP 12 BUSIEST AIRPORTS."
Shenzhen Airlines (SHZ)’s weekly departures are up +19% this March, when compared to data from the same week last year, with no airport of the top dozen recording a decline. The fastest growing airport is Nanchang, which is also a new entrant in this year’s ranking, having increased by +91% or by 41 weekly departures over the last 12 months. (SHZ) has expanded impressively at Nanchang, introducing new services to Shenyang, Haikou, Harbin, Zhuhai, Taizhou, and Xi’an. Apart from Nanchang, Harbin (both are highlighted in bright green) is another entrant in this year’s ranking, as (SHZ) has increased its weekly departures at the airport by +57%.
Shenzhen to Beijing is still the top route.
(SHZ) operates 221 routes, with the top 12 airport pairs accounting for 10% of all weekly seats (representing a decrease of -2% from last year’s figures as a result of the airline diversifying its network). Even though it posted a decrease of -8.3%, the Shenzhen to Beijing route is still the airline’s #1 route in terms of weekly seats in 2015. (SHZ) competes intensively with Air China (BEJ) (65x-weekly flights), China Southern Airlines (GUN) (56x-weekly departures) and Hainan (HNA) (40x-weekly services) on this sector.
SEE ATTACHED CHART - - "SHZ-2015-03 - SHZ TOP 12 ROUTES."
Looking at weekly seat capacity for this March, (SHZ) posted a double-digit increase of +18% when compared to data from the corresponding week of 2014. While the Shenzhen to Hefei route is the fastest-growing airport pair (+30%), this year’s top position has provided the biggest capacity decline (-8.3%). This has come as a result of (SHZ) having reduced its frequency on the sector from 56x- weekly to 52x- weekly over the past 12 months. Overall, 7 of the top dozen routes posted capacity growth, while the Shenzhen to Nanjing and Guangzhou to Wuxi links have seen their operations unchanged.
737-87L (40824, B-1757), delivery.
May 2015: News Item A-1: Shenzhen Airlines (SHZ), a subsidiary of Air China (BEJ), has won approval from its board to introduce 46 Boeing 737 airplanes, according to a statement released by the flag carrier on May 22.
News Item A-2: Shenzhen Airlines (SHZ)'s flight attendants (CA) have been awarded the most beautiful, coming 1st in this year's "World's Top Ten Most Beautiful Airline Flight Attendants" list published by the World Air Stewardess Association (WASA) in mid-May.
To be the most beautiful stewardess, one's key features should include beauty, fashion taste, good service, and enthusiasm, and so on. The evaluation criteria, (GN) Most Beautiful Air Stewardess Index System, include internal beauty and external beauty, comprehensive impression and smile service indexes, totaling 42 criteria.
Shenzhen Airlines (SHZ) is proud of having many of the most gorgeous and beautiful air hostesses in the world. The flight attendants (CA) of this airline are cooperative and represent the company in a better way. Hu Lanmei and Guan Yiwen were named as the Top 10 Most Beautiful Airline Flight Attendants (CA). Moreover, (SHZ) also ranked in the Top 10 Airlines with "Smile Service."
Besides their thoughtful care for passengers, (SHZ) flight attendants (CA) also offer their help to all kinds of needs, spreading their kindness in all kinds of volunteering activities.
June 2015: Shenzhen Airlines (SHZ), a subsidiary of Air China (BEJ) and a Star (SAL) Alliance member, has agreed to buy 46 Boeing 737s, according to an Air China (BEJ) filing with the Shanghai Stock Exchange. The stock exchange filing has been widely reported, but Boeing (TBC) has not officially confirmed the order and Shenzhen Airlines (SHZ) has not commented.
Air China (BEJ) said the 737s will be delivered between 2016 and 2020, but it did not say which 737 model or models (SHZ) ordered.
Based on list prices, the value of the order is at least $3.6 billion, which would be the value if all of the 737s are 737-700s. A number of news reports cite Air China (BEJ) valuing the order at $4.3 billion, which would indicate at least some of the 46 airplanes are models other than the 737-700.
July 2015: News Item A-1: Shenzhen Airlines (SHZ) launched its Beijing to Osaka flight on July 1 in a bid to speed up (SHZ)' expansion in the Beijing area.
The newly launched flight ZH9015 departs Beijing Capital International Airport Terminal 3 at 1:35 pm and arrives in Osaka at 5:50 pm, while the return flight ZH9016 leaves Osaka at 7:20 pm and reaches Beijing at 10:15 pm, the company said.
Osaka, Japan's 2nd largest city after Tokyo, is a popular tourist destination and the number of Chinese visitors to Japan has been growing. In 2014, the number of Chinese visitors to Japan reached a new record of 2.2 million with an 82% year-on-year surge, media reports said, noting that Chinese visitors ranked as No 3 among foreign visitors to Japan.
The Beijing to Osaka flight is Shenzhen Airlines (SHZ)'s 1st international flight originating from Beijing, Su Wei General Manager of the company's Beijing branch was quoted as saying to the "Global Times."
(SHZ) set up its Beijing branch in 2009 and now has 6 airplanes at the Beijing Capital International Airport flying to 12 cities, (SHZ) said.
(SHZ) may start more flights from Beijing to destinations in NE Asia and SE Asia at the end of this year, according to (SHZ), which is based in South China's Guangdong Province.
News Item A-2: Shenzhen Airlines (SHZ) took delivery of a new Boeing 737-800 (B-1516), at Shenzhen Bao'an International Airport (SZX) on July 15. By now, (SHZ) owns a fleet of 158 airplanes in service, including 87 Boeing 737s and 71 Airbus A320s.
737-87L (37627, B-1516) and A320-214 (6686, B-1685), (ICBC) Leasing leased deliveries.
August 2015: News Item A-1: Shenzhen Airlines (SHZ) has expanded its network to Japan with the launch on August 2 of a 4x-weekly service between Shenzhen and Osaka Kansai. The 2,459 km route will be served by (SHZ)’s A320s and will face competition from China Southern Airlines (GUN), which already operate the route with 4x-weekly flights. This becomes (SHZ)’s 4th route to Japan. The other 3 connect Beijing, Fuzhou, and Wuxi to Osaka Kansai.
News Item A-2: Shenzhen Airlines (SHZ) will start offering direct passenger flights between Harbin, capital of NE China's Heilongjiang Province, and Hong Kong on September 23. 3 flights will operate each week with a stopover in Yantai City of Shandong Province.
It will be the only direct flight between the 2 cities after the cancellation of a Hong Kong to Harbin flight operated by Hong Kong Airlines (CRY).
The flights on Wednesdays, Fridays and Sundays are expected to boost exchanges between northeast China and Hong Kong in fields of economy and tourism, among others.
A320-214 (6728, B-8078), ex-(F-WWDS), (SMBC) Aviation leased.
October 2015: Check-in counters for all domestic flights will be closed 45 minutes, instead of the current 30 minutes, prior to the scheduled time of departure at Shenzhen Bao'an International Airport (SZX) starting October 13 the airport said. The latest move is to provide customers with a safer, more punctual and smoother travel experience, said the airport.
The adjustment only applies to domestic flights. For regional and international flights, the check-in close time is subject to the airlines' notification.
The new rule will allow more time for passengers to check in themselves and luggage, thus to avoid missing their flights due to possible congestion.
Passengers are advised to arrive at the airport 2 to 2.5 hours earlier prior to the scheduled departure to leave enough time for their flights.
December 2015: Shenzhen Bao'an International Airport (SZX) reported a +2.7% year-on-year increase of the passenger throughput in November this year. The airport served 3.28 million passengers in November, jumping +2.7% from the same period last year.
Cargo & mail volume handled last month was 91.1 thousand tonnes, with a year-on-year growth of +5.1%. In the 1st 11 months of this year, Shenzhen Airport served >36.41 million passengers and 279,700 aircraft movements in total, up +10.2% and +7.3% year on year, respectively. The airport's cargo volume saw a +4.9% increase to 918,600 tonnes from January to November.
January 2016: News Item A-1: Shenzhen Airlines (SHZ) has launched its 2nd route to Japan from its home base of Shenzhen (SZX). On January 1 (SHZ), in which Air China (BEJ) has a 51% stake, began daily flights to Tokyo Narita (NRT). Fellow Star (SAL) Alliance member All Nippon Airways (ANA) code shares on the service. The 2,047 km route will be flown by (SHZ)’s 737-800s and faces no direct competition, though China Southern Airlines (GUN) operates 2x-weekly flights to Ibaraki Airport, located around 85 km from Tokyo.
(SHZ) now operates non-stop to a total of 58 destinations from Shenzhen, of which 51 are in China. Tokyo Narita joins Bangkok, Osaka Kansai, Phuket, Seoul Incheon, Singapore, and Taipei Taoyuan on (SHZ)’s international network from its home base.
On December 23 (SHZ) also began a new service linking Nantong (NTG) with Taipei Taoyuan (TPE). Initially, the 777 km route will be served with just a weekly flight on Wednesdays, but the frequency increases to 3x-weekly by the beginning of February. This new route will be served by (SHZ)’s A320 fleet and faces no competition.
News Item A-2: (SHZ) on January 26 introduced its 7th route between China and Japan, its 2nd from Nantong (NTG) and its 1st to Nagoya (NGO). The 1,498 km route will be operated 2x-weekly (Tuesdays and Saturdays) by (SHZ)’s A320s and will not face any direct competition. (SHZ)’s other service to Japan from Nantong is to Osaka Kansai, while Taipei Taoyuan is also served with 3x-weekly flights. In 2014, Nantong Xingdong Airport handled just >930,000 passengers, making it China’s 68th busiest airport. Located on China’s eastern coast, just over 100 km from Shanghai, Nantong is a major port with an urban population of >7 million people.
News Item A-3: The Hong Kong Airport Authority (HKAA) and Shenzhen Airport Management Company have agreed to coordinate future airspace and development planning between Hong Kong International Airport (HKIA) and Shenzhen Bao’an International Airport (SZIA) on the Chinese mainland.
An agreement, signed by the 2 management bodies, aims to help ease the Pearl River Delta (PRD) region’s notorious airspace congestion, and to introduce improved immigration and air, sea and land transfers between the neighboring facilities.
(HKAA) (CEO) Fred Lam said the agreement would help promote a “reformation of the Pearl River Delta airspace in order to achieve a win-win situation” that would improve common resource usage across the region.
“This agreement [signals] strengthened cooperation between the 2 airports [to] enhance the optimization of resources,” Lam said.
Initial moves will see a specially designated direct immigration channel at Shenzhen Bay for passengers and vehicles traveling between (SZIA) in mainland China, and (HKIA) in Hong Kong. Currently, some 14 ferries and >80 coaches and limousines operate daily schedules between the 2 airports, taking anything from 30 minutes to several hours to make the 20-mile sea trip.
“Cooperation [between the 2 airports] will not only benefit Hong Kong and Shenzhen residents’ travel to the China mainland or overseas, but also provide more options for travelers and contribute to the economic advancement of the (PRD) region,” Lam said.
February 2016: "Shenzhen Airlines Plans Two New Services to Jeju, South Korea" by Lena Ge, China Aviation Daily, February 19, 2016.
Shenzhen Airlines (SHZ), a regional subsidiary of Air China (BEJ), is now waiting government approval to launch 2 nonstop services to Jeju, South Korea from its hub and Nantong in this March.
Pending government approval, (SHZ) will operate the Shenzhen to Jeju service using Airbus 320 or Boeing 737-800 airplanes with 3x-weekly. Meanwhile, the Nantong to Jeju route will be operated 4x-weekly, using A320 aircraft.
March 2016: News Item A-1: Cobham Satcom's Aviator 300 SwiftBroadband (SBB) system has been certified on Shenzhen Airlines (SHZ)'s Boeing 737-800 fleet. Cobham partnered with Southeast Aerospace (SEA), China Trancomm, Inmarsat, and Delta G Design to develop the (FAA) Supplemental Type Certificate (STC) and Civil Aviation Authority of China (CAAC) Validation of Supplemental Type Certificate (VSTC).
The Aviator 300 system will be fitted with Inmarsat's SwiftBroadband Safety capability for Airline Operational Communications (AOC) messaging on the Boeing 737NG airplane with the aim to enable a secure data exchange between ground operations and airplane. The Cobham terminal will also interface with the airplane's existing Aircraft Communications Addressing and Reporting System (ACARS), allowing the flight deck data messages to be carried over Inmarsat SwiftBroadband.
The new technology featured in the Aviator 300 will enable (SHZ) to comply with the (CAAC)’s mandate requiring airlines to operate and control voice communications independent of Air Traffic Control (ATC) within 4 minutes. The system features a compact Intermediate Gain Antenna (IGA) and promises to deliver data speeds up to 332 kbps.
The Aviator 300 has already been certified for several airplanes, including the Boeing 757, Airbus A319, A320 and A321, Cessna 550, 550 Bravo and S550, Citation X, G200, Embraer 135 (Legacy 600/650) and Bombardier Challenger 300.
News Item A-2: Qunar, a Chinese online travel agency (OTA), plans to launch a low-cost carrier (LCC) in Shenzhen in an effort to enhance its position in the travel supply chain.
Qunar has revealed it will set up this new entity with 2 business partners, but will invest in technology instead of cash to hold stakes. The new venture will be mainly responsible for online ticket sales and is expected to be based at the Shenzhen Bao’an International Airport and operate domestic and international routes to neighboring countries.
There are currently no (LCC)s based in Shenzhen. In recent months, Chinese airlines have committed to boost direct ticket sales.
Another Chinese (OTA), Tongcheng, also plans to launch a carrier.
China’s domestic carriers are increasingly having more input in the travel supply chain. China Eastern Airlines (CEA) has established electronic commerce company while Hainan Airlines (HNA) and Juneyao Airlines (JYA) hold stakes in some (OTA)s with cash investments.
May 2016: Becoming a Shenzhen Airlines (SHZ) female pilot (FC):
October 2016: A320-232 (7247, B-8632), ex-(B-8632) delivery.
November 2016: News Item A-1: Hainan Airlines (HNA) announced on November 28 that its subsidiary, Yunan Lucky Air (LKY) is planning to set up a new carrier in Chengdu, capital city of SW China's Sichuan Province.
Lucky Air (LKY) will partner with local state-owned companies to invest 3 billion yuan in the new Chengdu Shenniao Airlines, which could become the 8th base carrier at Chengdu Shuangliu International Airport following Air China (BEJ) Southwest Brance, Sichuan Airlines (SIC), Chengdu Airlines (UEG), Tibet Airlines (TBZ), China Eastern Airlines (CEA) Sichuan, Shenzhen Airlines (SHZ) and Lucky Air (LKY).
(LKY), the Kunming-based carrier expects to invest up to 1.05 billion yuan in the joint venture (JV) and will own up to 35%. Yunnan Xiangpeng Investment Company, Ltd and Chengdu Communications Investment Group Company, Ltd. will hold 45% and 20% stakes in the new airline with 1.35 billion yuan and 600 million yuan, respectively.
Based at Chengdu Shuangliu International Airport, the proposed airline will be a low cost carrier (LCC) operating domestic and international flights.
Hainan Airlines (HNA) said that the new proposed Shenniao Airlines aims to enhance its presence in Sichuan Province and increase its market shares in the region, so as to make profits. Shenniao Airlines becomes the latest in a series of new Chinese airlines launched by the (HNA) Group in recent years. Others include Fuzhou Airlines (FZH) in Fujian province, Urumqi Airlines (URQ) in the Xinjiang region, and GX Airlines (GXB) in Guangxi region. It has also created a new passenger airline in Shanghai, with the expansion of former cargo carrier Yangtze River Airlines (YTH).
February 2017: A320-232 (7420, B-8181), ex-(B-000E) delivery.
October 2017: News Item A-1: Air China (BEJ) will open Shenzhen to Los Angeles direct services December 7 to replace the current Shenzhen to Beijing to Los Angeles route, which opened February 1 in response to the increase in Chinese outbound traffic.
The new direct Boeing 787-9 service will be 3x-weekly.
In 2016, the number of passengers booking round trips between China and the USA exceeded 5 million, up +5.3% over 4.8 million in 2015. For the 10-year 2005 to 2015 period, this number reached >30 million.
In recent years, (BEJ), the Beijing-based carrier has accelerated opening intercontinental routes, for example, to Frankfurt, in May 2016.
Air China (BEJ) subsidiary Shenzhen Airlines (SHZ) operates a fleet of nearly 200 airplanes on >220 domestic and international routes to 74 destinations with >179 daily departures.
Industry sources say generous government subsidies and favorable policies have better positioned Shenzhen Bao’an International Airport to open more international routes and compete with bigger players such as Guangzhou Baiyun and Hong Kong international airports.
December 2017: Shenzhen Airlines (SHZ) commenced operations on a new service from Shenzhen (SZX) to Phnom Penh (PNH), Cambodia on December 20. The 1,556 km route will be operated daily with A320s. Shenzhen faces direct competition from 2 other Chinese carriers on this sector. China Southern Airlines (GUN) and Spring Airlines (CQH) will also operate daily frequencies on the route during the week commencing January 2, 2018, with both carriers also using A320s.
According to Cambodia Airports, Shenzhen becomes the 7th Chinese carrier to serve Phnom Penh, with 4 Cambodian airlines also operating to and from China. Cambodia’s Ministry of Tourism is aiming to welcome 2 million Chinese visitors per year by 2020. Éric Delobel, (CEO) of Cambodia Airports, the company developing and operating Cambodia’s network of international airports, discussed connectivity to and from China. “It has been a market that has gained prominence with developing inbound and outbound traffic. Most of China’s major cities have established air links with our airports and that has benefited passengers, as they have a full array of travel options with more destinations, airlines, and frequencies.”
Click below for photos:
SHZ-737-89L - 2011-11
SHZ-A320 - STAR ALLIANCE - 2012-11
2 737-3K9 (CFM56-3B2) (2302-25787, /92 B-2932; 2331-25788, /92 B-2933), EX-(VAR), (BAV) LSD. 140Y.
1 737-3Q8 (CFM56-3B2) (2290-25373, /92 B-2971), EX-(LDE), (ILF) LSD. WET-LST (TNZ) 2012-06. 140Y.
2 737-31L (CFM56-3B1) (2625-27345, /94 B-2939; 2636-27346, /94 B-2940), (CSC) LSD, (XIJ) WET-LSD 12 YRS. 140Y.
1 737-33A (CFM56-3C1) (2831-27463, /96 B-2972), (AWW) LSD. 140Y.
2 737-330QC (CFM56-3) (23524; 23835), (DLH) LSD. 140Y.
1 737-36N (CFM56-3C1) (2846-28555, /97 B-2610), (GEF) LSD 2004-07. 140Y.
2 737-36N (CFM56-3) (28559; 28573), (GEF) LSD 2005-02 140Y.
2 737-7BX (CFM56-7B24) (823-30741, /01 B-5025; 864-30742, /01 B-5026), EX-(MID), GECAS (GEF) LSD 2002-10. 140Y.
3 737-78S (CFM56-7B24) (631-30169, /00 B-2666; 654-30170, /00 B-2667), EX-(XIJ) (681-30171, /00 B-2668). 140Y.
2 737-79K (CFM56-7B24) (110-29190, /98 B-2633 - SEE PHOTO "SHZ-737-79K-3;" 127-29191, /98 B-2635 - SEE PHOTO). 140Y.
2 737-76N (CFM56-7B24) (710-29893, /00 B-2679; 895-32244, /01 B-2678),
(GEF) LSD 2002-11. 140Y.
3 737-77LQC (CFM56-7B24) (1023-32772, /01 B-2669); (710-29893, /00 B-2679; 895-32244, /01 B-2678; EX-(MID) 2002-01), (GEF) LSD. 140Y.
5 737-8AL (CFM56-7B26) (2519-35081, B-5357, 2/08; 2555-35079, B-5377, 3/08; 2563-35085, B-5378, 4/08; 2605-35087, B-5379; 2771-35088, B-5410, 2008-12), (SIL) LSD. 8F, 160Y.
1 737-8AL (CFM56-7B26) (), 8F, 160Y.
2 737-8BK (CFM56-7B26) (2103-33020, B-5186, 11/06; 2124-33828, B-5187, 2006-12), (TCI) LSD. 8F, 160Y.
6 737-8Q8 (CFM56-7B26) (841-28241, /01 B-2692; 808-30628, /01 B-2691; 1402-30680, /03 B-5073), EX-(SCA), (ILF) 7 YR LSD 2002-04. (1414-30690, /03 B-5078; 1410-30692, /03 B-5075; 1422-30693, /03 B-5079), 8F, 160Y.
1 737-800 (CFM56-7B)
4 737-86N (CFM56-7B26) (772-28639, /01 B-5049, 2003-07; 828-28643, /01 B-5050, 2003-07; 2175-32686, B-5317; 2218-32688, B-5322, 2007-03; 2306-35215, B-5345, 2007-06), (GEF) LSD. 8F, 160Y.
14 737-87L (CFM56-7B26) (29151, B-5618, 2011-11; 2616-35527, B-5380, 2008-05; 2703-35530, B-5401; 2851-35532, B-5411, 2009-03 - - SEE PHOTO - - "SHZ-737-87L-2009-03;" 2900-35533, B-5412, 2009-05; 2895-35535, B-5413, 2009-05; 3019-35536, B-5441, 2009-09; 37624, B-1973, 2014-08; 37627, B-1516, 2015-07; 39133, B-5737, 2013-06; 39139, B-5860, 2012-13; 39152, B-5619 - - SEE PHOTO - - "SHZ-737-89L - 2011-11;" 40822, B-1755, 2015-01; 40824, B-1757, 2015-03), 8F, 160Y.
10 737-97L (CFM56-7B26) (1750-33544, B-5102, 2005-07; 1760-33645, B-5103, 2005-08; 1775-33645, B-5103, 2005-08; 1722-33648, B-5106, 2005-06; 1755-33649, B-5109), 8C, 159Y.
0 757-21B (RB211-535E4) (233-24402, /89, B-2807), (GUN) LSD & MAINT.
0 757-236 (RB211-535E4) (445-25598, /93, B-2835), EX-(BAB), (GUN) LSD & MAINT. RTND.
2 ORDERS A300-600F, FOR JADE CARGO INTERNATIONAL (JDC) OPS:
5 A319-112 (2672, B-6196, 2006-02; 2684, B-6197, 2006-02; 2841, B-6153, 2006-08, 2905, B-6159, 2006-10; 2935, B-6165, 2011-10). 8C, 120Y.
1 A319-115X (2935, B-6165), (TCI) LSD 2006-11. 8C, 120Y.
27 ORDERS (2012-02) A320 FAMILY AIRPLANES:
11 A320-214 (CFM56-5B4/P) (994, /99 B-2416, 2005-05; 2909, B-6286, 2006-10 - SEE PHOTO; 2973, B-6296, 2006-12; 2980, B-6297, 2006-12; 3132, B-6312, 2007-05), EX-(IBE); 3153, B-6315, 2007-06; 3206, B-6316, 2007-07; 3366, B-6351, 2008-01; 3435, B-6351, 2008-03; 3440, B-6357, 2008-03; 3456, B-6359, 2008-05) (ILF) LSD. 8C, 150Y.
1 A320-214 (CFM56-5B4/P) (3383, B-6352), (RBS) Aerospace leased. 8C, 150Y.
14 A320-214 (CFM56-54/P) (3599, B-6377, 2008-09; 3698, B-6563, 2009-08; 3756, B-6550, 2009-01; 3848, B-6590, 2009-04; 3855, B-6566, 2009-04; 3887, B6567, 2009-05; 3898, B-6568, 2009-05; 3935, B-6571, 2009-06; 3971, B-6565, 2009-07; 4010, B-6570, 2010-01; 4028, B-6589, 2009-09; 4159, B-6648, 2010-04; 5550, B-9910, 2013-06; 5589, B-9938, 2013-07; 5766, B-9980, 2013-12). 8C, 150Y.
1 A320-214 (CFM56-54/P) (6686, B-1685), (ICBC) LEASING LSD 2015-07. 8C, 150Y.
1 A320-214 (CFM56-54/P) (6728, B-8078), (SMBC) LEASING LSD 2015-09. 8C, 150Y.
1 A320-232 (V2527-A5) (B-6388 - - SEE PHOTO - - "SHZ-A320-232-2009-11"), 1ST ASSEMBLED IN CHINA. DRAGON LSG LSD 2009-06. 8C, 150Y.
15 A320-232 (V2527-A5) (4159, B-6648, 2010-04; 4176, B-6613, 2010-01; 4208, B-6649, 2010-05; 4214, B-6615, 2010-02; 4215, B-6615, 2010-02; 4300, B-6650, 2010-05; 4407, B-6692, 2010-09; 4409, B-6691, 2010-08; 4453; 4478; 4514, B-6721; 4531, B-6722; 4897, B-6807, 2011-10; 4920, B-6833, 2011-11; 4986, B-6835, 2012-01; 5002, B-6857, 2012-01; 5986, B-1841, 2014-06; 7247, B-8632, 2016-10; 7420, B-8181, 2017-02). 8C, 150Y.
100 ORDERS ARJ21-700:
Click below for photos:
FAN CHENG, (SHZ) VICE CHAIRMAN, EX-(BEJ) VP, EX- COMMUNIST PARTY SECRETARY, EX-(NEJ) SENIOR VP (2010-03).
CHEN ZHIYONG, CHIEF EXECUTIVE OFFICER (CEO) SHENZHEN AIRLINES & VICE PRESIDENT AIR CHINA (BEJ).
FENG GANG, PRESIDENT.
LI KUN, PRESIDENT & GENERAL MANAGER, EX-(GUN), SEE ATTACHED - - "SHZ-PRES-2008-08-A/B/C/D/E." (2006-02), ARRESTED FOR "FINANCIAL IRREGULARITIES" (2010-03).
JIANG ZHI WEI, VP FLIGHT OPERATIONS/SECURITY (email@example.com) (2001-01).
CAPTAIN CHEN ZHONG DE, CHIEF PILOT.
JIANPING LIU, VP OPERATIONS.
YANG JIA BAO, VP MAINTENANCE, ENGINEERING & SPARES, (firstname.lastname@example.org) (2001-01).
LI YOUQIANG, FINANCE DIRECTOR, CHIEF ACCOUNTANT, EX-(BEJ) (2009-12).
CHEN DA ZHONG, DIRECTOR FLIGHT OPERATIONS DISPATCH.
WANG JIANG MING, DIRECTOR TECHNICAL SERVICES - CHIEF ENGINEER.
XIAO KUN ZHOU, DIRECTOR MAINTENANCE & ENGINEERING (2001-04).
XUAN YU EN, DIRECTOR AIRLINE PROJECTS & PLANNING (2001-10).
ZHANG YU, DIRECTOR MARKETING & SALES.
CAPTAIN ZHU NAN, DEPUTY DIRECTOR FLIGHT OPERATIONS, DIRECTOR AIR SAFETY (email@example.com).
WANG GUO XIAN, DEPUTY DIRECTOR MAINTENANCE (2001-04).
YANG HU PING (TONY), DEPUTY DIRECTOR QUALITY CONTROL (QC)/RELIABILITY (1996-10).
ZHANG JIAN GONG, DEPUTY DIRECTOR ENGINEERING/TECHNICAL SERVICES (1999-12).
WANG WAN LI, MANAGER MAINTENANCE ENGINEERING.
ZHANG PEI (BILL), ASSISTANT GENERAL MANAGER, CABIN SERVICE/SECURITY (1997-06).
ZHANG DA WEI (DAVID), MANAGER MAINTENANCE CONTROL/RELIABILITY.
SONG ZHONG MAO, MANAGER MAINTENANCE SCHEDULES (1995-06).
WANG RONG PING, MANAGER TECHNICAL PUBLICATIONS (1997-05).
LI HONG WEI, MANAGER MAINTENANCE PLANNING/TECHNICAL SERVICES (1997-02).