Chinese Airways Vying for Pie in Sichuan
CEA | Quote | Chart | News | PowerRating -- China Eastern Airlines Corporation Limited (NYSE: CEA, SEHK: 0670 and SHSE: 600115) is currently waiting for approval from the Civil Aviation Administration of China (CAAC) for the establishment of its Sichuan branch, which is expected to be completed by the end of 2009.
In late October, China Eastern held an introduction meeting in Chengdu, capital of Sichuan, southwest China, announcing its desire to establish its Sichuan branch, after which the company will have more than 30 aircrafts parked in the Chengdu Shuangliu International Airport. Meanwhile, international routes from Chengdu to Southeast Asia will also be opened.
After China Eastern's restructuring with Shanghai Airlines Co., Ltd. (SAL and SHSE: 600591) was nailed down, the former sent a team to Mumashan New City of Shuangliu County in December 2008, working on the feasibility to build a base there.
Currently, China Eastern has four planes staying overnight in Shuangliu Airport and over 20 airlines being operated in Chengdu per day. Its market share is only next to Air China Limited (SHSE: 601111 and SEHK: 0753) and Sichuan Airlines Co., Ltd., which are based in Shuangliu Airport.
Previously, China Eastern revealed a plan to combine its aviation networks in Sichuan and Yunnan. By far, the company's Yunnan branch has had a fleet of 40 airplanes and is brewing extending airlines to the nine members of the Association of Southeast Asian Nation (ASEAN) next year.
As to the frenzy of Chinese airways to set up branches in Sichuan, a top executive of Sichuan Province Airport Group Co., Ltd. points out that it is because the No. 2 runway of the Shuangliu Airport is to come into service. Meanwhile, the CAAC considers Shuangliu Airport as a regional hinge and Sichuan has rich tourism resources, which lures the settlement of many airways.
China Eastern is not the only airway that is interested in the Sichuan aviation market. Shenzhen Airlines Limited and Hainan Airlines Group (HNA) are also snatching the big cake.
In June 2009, Shenzhen Airlines inked a framework agreement with the Chengdu government on bilateral cooperation in building in the city into a regional hinge. After the setup of its Sichuan branch, the company will have more than 50 flights flying from Chengdu and operate about 15 routes every day.
Moreover, Shenzhen Airlines will put 30 to 40 airliners into operation in Chengdu in the coming three to five years, and opening more international and domestic airlines.
Foreign airways are also unwilling to be lagged behind. AirAsia Berhad, a Malaysian low-cost airline operator, lately opened a direct flight from Chengdu to Kuala Lumpur, whose passenger load factor hit 99%.
(USD 1 = CNY 6.83)
Source: www.163.com (November 24, 2009)
For full details on China Eastern Airlines (CEA) CEA. China Eastern Airlines (CEA) has Short Term PowerRatings at TradingMarkets. Details on China Eastern Airlines (CEA) Short Term PowerRatings is available at This Link.
- Honeywell, China Eastern Airlines Sign Agreement - 02/08/10
- Boeing, Airbus Fighting in Chinese Market - 02/01/10
- DJ Canada Hot Stocks To Watch: CAE, Denison, Northgate, CGI, Chesswood -2- - 01/19/10
- Shanghai Airlines to Delist in Early Feb - 01/12/10
- China Eastern to Benefit from Japan Airlines Predicament - 01/06/10
- More News >>
