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October 3, 2011

China Southern Current Status and Future Planning Overview as of Oct 2011

by JL
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Speaking to this website, airlineroute, at World Routes Event in Berlin, China Southern Airlines’ Network, Planning and Optimization Director Brian Yang has offered brief informatiom on the airline’s strategy and future planning.

Below is the brief summary:

New narrow-body aircraft delivery in 2012
16 Boeing 737
12 Airbus A320 series
10 Embraer E190

Wide-body aircraft growth 2011 vs 2015
Airbus A380: 2 (2011), 5 (2015)
Airbus A330(-200/-300): 21 (2011), 30 (2015)
Boeing 777/787: 10 (2011), 16 (2015)
Boeing 747F/777F: 8 (2011), 14 (2015)

The airline is currently in negotiation for additional 14 wide-body aircraft.

The Skyteam member in 2009 has remodeled its strategy from point-to-point to a full hub-and-spoke carrier, which has been proved successful. For instance, the airline says its passenger numbers to Australia has been increased by 97% in 2010 (compared to 2009). With the case of Melbourne, 60% of passengers are transitting via its Guangzhou hub. Part of the strategy change is a respond to China’s growing high-speed rail service, which has competition advantage over air travel (when travelling distance is within 4 hours), as well as International consolidations.

Hub Overviews
The Skyteam member currently has 4 hubs in China: Guangzhou, Beijing, Urumqi and Chongqing

Guangzhou
*5 Connection banks developed for connecting passengers
*485 Daily flights
*Holds largest market share to South East Asia
*International Whie-Spot market out of CAN includes: Russia/Eastern Europe, Africa, East Coast of North America

Yang quoted that the airline forsees higher costs for Guangzhou – East Coast North America routes if operaing with existing Boeing 777 fleet. However, this may be improved with the arrival of Boeing 787 fleet, which it does not ruled out possibility of converting orders to -9 model.

Beijing
*A key hub in its network
*2nd largest operator with 20% market share, 221 Daily flights
*The airline is having difficulties to secure additional slots for the next 3 years, but may be changed when the new Beijing-Daxing Airport is in operation in 6 years at the earliest
*International White-Spot market out of PEK: Europe and North America

The airline believes Beijing will still be the ideal International Gateway for long-haul flights. It is continuing to work on securing international traffic rights out of Beijing, despite encountering “obstacles”.

Urumqi
*A Regional hub for East-West connecting traffic
*Further improvement with the arrival of Embraer E190 aircraft
*International White-Spot market out of URC: Middle-East, West Asia, Eastern Europe

Chongqing
The airline is currently testing Chongqing as Domestic connection hub

In the future, the airline will be heavily focusing on 6th freedom traffic rights to maintain its hub growths. When being asked about competition with Hong Kong hub, Yang confidently says that its advantage over Hong Kong is its large domestic route presence, where Cathay Pacific and Dragonair does not have such advantages. He also believes that both Guangzhou and Hong Kong hub can actually co-exists.

The airline in Winter 2011 season will see a drop from 425 domestic routes in Summer 2011 to 375.

Special Thanks to China Southern Airlines’ Network, Planning and Optimization Director Brian Yang for providing these overviews.

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