Overseas routes grow but bullet trains slow domestic business
China’s airline industry is expected to grow by 13 percent annually from 2011 to 2015, according to the China Civil Aviation Bureau’s 12th five-year plan. Three major international carriers dominate the market: Air China, China Southern Airlines and China Eastern Airlines, all SOEs (State Owned Enterprises).
Each airline added new international routes. Air China filled out its connections to Europe, including a flight between Chengdu and Frankfurt, the first direct flight between a second tier city and Europe. China Southern also expanded its European coverage as well as its connections to Australia and New Zealand. China Eastern Airlines focused on Asian destinations, including its connects to Taiwan and Hong Kong.
Fierce competition from China’s bullet trains heavily impacted the domestic business for these major carriers. Meanwhile, medium-sized airlines attempted to differentiate by sharpening operations, introducing secondary routes and expanding into cargo transportation. The brand value of the airline category grew 9 percent in the BrandZ™ ranking.