China accelerates construction of airports; high speed rail poses threat to airlines

A respondent to my blog expressed concern about China building an airport in Xiaping near the Pakistan border.  So I wondered about what was going on in China.  Here's what I found:

Tom Michell/Aerospace

In May of 2013, bad weather forced a China Southern Airlines Airbus A380 airliner (above) to make an unscheduled landing.
The airliner was halfway through its journey from Beijing to the southern city of Guangzhou and the only nearby airport with a runway long enough to accommodate the superjumbo was Wuhan’s Tianhe International Airport
The runway at the next big airport along the route, Huanghua in Hunan’s provincial capital, Changsha, was too short.

Currently, just nine airports in China can handle an Airbus A380. Another eight that have long enough runways are designated as alternate landing sites in case of emergency.

At present, these emergency sites lack the necessary facilities to handle regular flights. However, in another example of China’s continuing aviation construction boom, by 2016 Huanghua will be able to accommodate the world’s largest passenger aircraft.
Marc Allen, Boeing’s outgoing China head, says: “When you realise how many large cities in China are going to have major airports built in the 2008 to 2018 timeframe, it’s going to be important that an aeroplane that arrives in 2020 to 2025 fits the current infrastructure.
“We’re not talking about one so-called national airport, such as a Heathrow, we’re talking about a country that’s going to have 20, 30 major airports.”
According to the Chinese government’s 12th five-year plan, the total number of airports is set to expand from 175 in 2010 to 230 in 2015.
One of the biggest on the planning board is an international hub that will be built on Beijing’s southern outskirts. The capital’s current international airport is located northeast of the city.
With a planned area of more than 15,000 square kilometres, the four-runway facility will be bigger than Bermuda and is scheduled for completion by 2018. At least 116,000 people living in the area will have to be relocated.
The expansion is not just happening in large cities. “The number of new flights and airports in second- and third-tier cities will increase rapidly,” says Ren Haoning, an analyst at the CIC Industry Research Center.
He adds: “Combined with a decline in government intervention in the sector, the industry will see a surge in competition.”
The construction boom will feed – and feed off – a surge in aircraft sales, although these remain carefully regulated.
“The government is clear on what the overall macro objectives are for China’s aviation sector,” says Mr Allen.
“It is important to avoid the excess capacity that has been a problem in other industries, so the ministries and the regulator are all very careful to think at each step about what the market will bear.”

Assuming average annual GDP growth of 6.4 per cent in the two decades to 2032, US aircraft maker Boeing predicts that the size of China’s civil aviation fleet will increase by 78 per cent to 6,450 airliners.

The aircraft manufacturer also estimates that some 5,580 new and replacement airliners valued at $780bn will be delivered during this period.

Last year, Boeing supplied a record 143 aircraft to Chinese carriers, including 14 Dreamliners. While most demand in volume terms is weighted towards single-aisle planes, Boeing and Airbus both expect orders for wide-body planes to increase rapidly as Chinese airlines expand their international networks.

Boeing estimates that wide-body deliveries in China over the next 20 years will be worth $400bn, against $370bn in single-aisle deliveries.
At last year’s Beijing air show, Airbus unveiled plans for a lighter-weight version of its best-selling wide-body jet, the twin engined A300-330.
The company hopes a reduced fuel burn will attract more buyers, extending the model’s life in the face of competition from the Dreamliner.
The aircraft is expected to enter service in 2015 or 2016.

In addition to fierce competition from rival domestic and international carriers, Chinese airlines will also have to contend with the country's high-speed rail network, which has emerged as the world’s largest in less than four years.

Many of the country’s latest high-speed railway stations are, like China’s airports, located far from city centres, but they are preferred by an increasing number of travellers for their more relaxed security procedures, uninterrupted mobile phone connectivity, and more reliable timetables.
Flights, on the other hand, are frequently delayed by everything from dense smogs to unannounced exercises by the military, which controls most of China’s airspace.
Securing wider corridors for civil aviation – and more approaches into the country’s biggest airports – has become a priority for civilian air controllers.
One of the final links in China’s high-speed rail network was completed in December, when services opened along the southeast coast between Shenzhen and Xiamen, with economy-class tickets priced at just Rmb150 ($25).
The impact on airlines was immediate, as they slashed ticket prices and reduced services between the two cities.
“The rapid development of high-speed rail will definitely put pressure on airlines’ profitability,” says Mr Ren. “And airport construction might also be affected.”