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Aviation Industry

China’s airlines’ growing presence in Latin America: China Eastern considers Mexico City

junio 7, 2017

Chinese airlines are turning their focus to Latin America at the direction of their government, which wants a global presence from its airlines. Air China serves São Paulo and Havana (which it considers part of Latin America), and in Apr-2017 China Southern launched Mexico City as a tag from Vancouver.

HNA partially owns Brazil’s Azul and Portugal’s TAP, which HNA can feed into from a forthcoming Beijing-Lisbon flight on the HNA group carrier Beijing Capital Airlines.

China Eastern has relied on codeshare access to Latin America but is now considering placing its own metal in the region. China Eastern is understood to be evaluating a nonstop Shanghai-Mexico City service, with a tag continuing to lower South America. China Eastern could work in partnership with Aeromexico for the service, and to obtain Mexico City slots. Guiding the development is Delta Air Lines, which has stakes in both Aeromexico and China Eastern.

Latin America not strategically core, but Chinese airlines must have a footprint
Growing examples of Chinese airline service to Latin America reflect a number of themes in Chinese aviation: profit is hardly the sole metric to evaluate value from an airline; there is a core central role of the government in airline planning; and there is a growing confidence of Chinese airlines to fly nearly anywhere.

Latin America is not commercially important to Chinese airlines – at least in a direct manner. But indirectly the services are important because they originate with the Chinese government, which wants its airlines to be global. Increasingly, their concept of global has few exceptions. (After Hainan Airlines issued an April Fools’ joke about a new flight to Antarctica, some quipped it would be real in a few years.)

In exchange for fulfilling strategic directives from the government, Chinese airlines – especially the state owned ones – receive protection.

Traffic between Latin America and Asia is growing fast but off a small base, limiting commercial feasibility. Intermediate airlines in Europe, the Gulf and North America have historically captured Asia-Latin America traffic flows and are well suited to doing so. Aside from Tokyo-São Paulo, the market between Asia and Latin America experiences fragmented traffic flows, limiting strong O&D pairs. Even if strong O&D volumes emerge, serving them nonstop is nearly impossible given the large distance between Asia and Latin America. Mexico City is a reach from Asia, and flying deep into South America from Asia nonstop is impossible with the current pipeline of aircraft…

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Fuente: https://centreforaviation.com/insights/analysis/chinas-airlines-growing-presence-in-latin-america-china-eastern-considers-mexico-city-347990

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