April 21, 2005
China, the fast-growing economic powerhouse of Asia, is ripe with opportunity for the world's aviation industry, and carriers who do not have a China-oriented business strategy should formulate one soon, or risk missing the potentially lucrative market completely.
Figures speak volumes about the size of China's aviation sector - about 100 million passengers travel by air on domestic routes and 20 million on international flights a year based on current industry estimates.
Currently only 5.8% of China's 2.1 billion people travel but rising disposable income and the emerging urban middle class should have profound effects, with tourism forecast to grow up to 10% annually.
Boeing and Airbus, the world's two largest aircraft producers agreed that China will undoubtedly be the prime driver of growth in the world's aviation industry with just the domestic passenger traffic and air cargo alone set to increase by an average of about 8% and 10% a year for the next 20 years.
''China is definitely pulling the Asia Pacific's air traffic along. So all of the carriers, both passengers and cargo airlines, need to have a Chinese strategy if they want to continue to survive in the Asia Pacific marketplace,'' said Andrew Whittaker, vice president for transport in Asia Pacific for Unisys, the US-based information technology service provider.
Many international carriers have already begun to tap the Chinese opportunities, particularly the 17 major international airlines based in Asia Pacific including Thai Airways International.
These airlines, which are members of Association of Asia Pacific Airlines (AAPA), are providing 800 flights a week to 27 Chinese cities, Andrew Herdman, AAPA director general, said in his presentation at the recent 2005 Unisys Travel and Transportation Conference in Hong Kong.
China has also attracted a number of new market entrants, the low-cost carriers including AirAsia, Southeast Asia's largest budget airline, as they move to open a new market segment to rival the conventional airlines on intra-Asia skies.
The China strategy has triggered a variety of moves. For example, Cathay Pacific was looking at buying 10% of Air China and there is speculation about Cathay buying Dragon Air and Air China purchasing Cathay, said Mr Whittaker, adding that a number of players would restructure ownership in and around China.
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