Business Round-Up
High speed trains eating into profits of China's carriers
March 1st 2013
Price wars and competition from high speed trains contributed to Chinese carriers posting losses for three consecutive months at the turn of the year. Read More »
Statistics released by the Civil Aviation Administration of China (CAAC) and reported in the China Business News showed that Mainland airlines collectively lost one billion yuan (US$160.3 million) in January.
Passenger demand at all three of China’s major carriers, Air China, China Southern Airlines (CSA) and China Eastern Airlines (CEA) slumped year-on-year in January. Air China’s revenue passenger kilometres (RPKs) decreased 1.5% while RPKs for CEA and CSA fell 2% and 1% respectively.
The figures were partly distorted by the Lunar New Year holiday, which fell in January last year, when travel demand is high. Now the holiday period is over carriers are slashing fares by as much as 92% on some routes.
In response to the growing impact of high speed rail, Mainland carriers are cutting short-haul routes and increasing long-haul services. Air China, for example, launched Beijing-Geneva and Chengdu-Frankfurt flights last month.
