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do not list future routes in the fleet table, they are not completely decided yet, still depend... and 777 will fly to australia in dec, instead of 330
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|11 <br> (9 orders)
|11 <br> (9 orders)
|283 (12/271) <br> 240 (36/215)
|283 (12/271) <br> 240 (36/215)
|Domestic, Europe, <br> Australia, Vancouver, <br> Madrid and Sao Paulo
|Domestic, Asia, Europe, Australia, <br> Vancouver and Sao Paulo
|One in Star Alliance Livery (B-6091)
|One in Star Alliance Livery (B-6091)
|-
|-
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|10
|10
|345 (49/296)
|345 (49/296)
|Domestic, Asia
|Domestic, Asia and Australia
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|(15 orders)
|(15 orders)
|
|
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|Europe, Toronto (begins March 2009), <br> Washington-Dulles (begins March 2009)<br> Shanghai-San Francisco (begins March 2009)
|Entry into service: 2008
|Entry into service: 2008
|}
|}

Revision as of 08:31, 11 November 2007

Air China
中国国际航空公司
Zhōngguó Guójì Hángkōng Gōngsī
File:AirChina.gif
IATA ICAO Callsign
CA CCA AIR CHINA
Founded1988
HubsBeijing Capital International Airport
Chengdu Shuangliu International Airport
Shanghai Pudong International Airport
Focus citiesHangzhou Xiaoshan International Airport
Chongqing Jiangbei International Airport
Tianjin Binhai International Airport
Hohhot Baita International Airport
Frequent-flyer programAir China Companion
AllianceStar Alliance (Joining December 12, 2007)
Fleet size212 (+71 orders) incl. cargo
Destinations185
Parent companyChina National Aviation Holding Company
HeadquartersBeijing, China
Key peopleLi Jiaxiang, Chairman
Cai Jianjiang, President
Websitehttp://www.airchina.com.cn
Not to be confused with China Airlines, the national airline of the Republic of China (Taiwan).

Air China (SEHK: 753) (LSE: AIRC) (Chinese: 中国国际航空公司, Pinyin: Zhōngguó Guójì Hángkōng Gōngsī, literally "Chinese International Aviation Company", abbreviated 国航) is the People's Republic of China's state owned and second-largest commercial airline after China Southern Airlines. It is the flag carrier and the only airline to fly the PRC national flag on its entire fleet. Its logo consists of a phoenix in the form of the abbreviation VIP, and "Air China" in both English and Chinese, which was autographed by Deng Xiaoping. It operates 4,945 flights each week worldwide.

Air China's main hubs are Beijing Capital International Airport, Chengdu Shuangliu International Airport and Shanghai Pudong International Airport, with other focus cities at Hangzhou Xiaoshan International Airport, Chongqing Jiangbei International Airport, Tianjin Binhai International Airport and Hohhot Baita International Airport.[1] Out of all Asian airlines, Air China currently flies to approximately 120 destinations; the most destinations from its own Beijing Hub. It also serves the most destinations out of all Asian airlines.

The airline flew 33.97 million passengers in 2006, with a passenger load factor of 75.9%. In the same year, it made a profit of 2.7 billion yuan, with an operating revenue of 44.9 billion yuan and total expenses standing at 42.4 billion yuan.[2]

History

Air China was established and started operations on July 1 1988. Formerly the Beijing-based international carrier division of Civil Aviation Administration of China (CAAC), it was renamed in 1988, when the government decided to split the operating divisions of CAAC into separate airlines, each with its own name.[3] At first dependent on Soviet aviation technology, by the 1980s the Chinese were fielding fleets of modern Western jets as they began to compete with Western airlines on international routes.

Difficulty adapting to new marketplace competition and a series of accidents between 1979 and 1983 created pressure for the organization to change. The CAAC was reorganized in late 1984, producing the following four regional divisions: Eastern, Southern, Southwestern, and Northwestern. Air China, based in Beijing, was given chief responsibility for intercontinental flights, and took over the CAAC's long haul aircraft (Boeing 747s, 767s, and 707s, as well as medium-haul 737s) and routes when it was granted its autonomy on July 1, 1988. Because of the commercial importance of Guangzhou (formerly Canton), China Southern was also cleared for international flights, along with Shanghai-based China Eastern.

At its launch in 1988, Air China operated 32 international routes to 31 destinations, and also connected 30 cities within China. It was China's largest carrier, and the only one allowed to carry China's national flag. In 1989, Air China posted a net profit of $106 million on revenues of $383 million. (The carrier had 6,000 employees at the time.) In that same year, Air China entered a joint venture with Lufthansa German Airlines, which provided 40 percent of the capital, or $220 million, to create the Beijing Aircraft Maintenance Center (Ameco Beijing). It specialized in the upkeep of the Boeing aircraft that comprised Air China's fleet. The venture was expanded with another $218 million (¥1.2 billion) in 1992. Ameco Beijing employed nearly 4,000 people, a little fewer than 50 of them from Lufthansa. Air Transport World reported the company preferred to source its needs through joint ventures due to the country's lack of hard currency. Its Beijing Air Catering was 40 percent owned by a large Hong Kong caterer.

Operating revenues for Air China were $1.05 billion in 1994, producing a net income of $36 million. Further deregulation of the aviation business took place in 1994, enabling foreign investment in airports and facilitating the import of aircraft built outside mainland China. By 1996 the country had 108 airports with scheduled airline services and around 30 different airlines. In 1997, the airline reported sales of $1.38 billion (¥11.5 billion). The fleet had grown to 65 aircraft and the carrier was flying 144 routes overall. By October 1997, Air China was planning a public stock offering. China Eastern Airlines and China Southern Airlines had listed on the Hong Kong and New York exchanges earlier in the year. Air China delayed plans based due to poor financial performance and a downturn in business caused by the Asian financial crisis.

Rumors of a state-prompted merger between Air China and China Southern Airlines abounded in 1999. By this time, China Southern, based in the commercial center of Guangzhou, had become the country's largest carrier. At the time, China had 30 airlines, and Beijing wanted to group them into several, more globally competitive units. Altogether, mainland airlines lost more than ¥6 billion in 1998. Flight International observed that a merger with China Southern could give Air China access to the Hong Kong and New York stock markets.

About 16 million passengers flew Air China in 1998. The October 1999 opening of a new terminal at Beijing Capital International Airport, where Air China operated the vast majority of flights, promised not only to relieve travelers of cramped conditions but also to allow Air China to devote more resources to its lucrative ground handling business for international carriers. One-fifth of Air China's 15,000 employees worked in ground handling.

Although the Chinese aviation industry as a whole was expected to earn ¥1 billion ($120 million) in profits in 1999, Air China and other individual airlines were struggling to break even and mitigate their collective losses of 1998, which totaled $300 million. Air China was not publicly traded and was not quite as open with its own sales figures as China Eastern and China Southern.

To demonstrate the airline's faith in its Y2K preparations, Air China chief Wang Li'an and several other top officers personally piloted several flights at the turn of the millennium. As reported in the China Daily, this decision generated a considerable amount of positive publicity in China. Wang had worked for the CAAC for more than 40 years before being appointed Air China's director-general in early 1999.

Early in 2000, Air China teamed with China National Aviation Co. Group (CNAC), the CAAC's Hong Kong-listed commercial arm, to establish a Hong Kong branch (95% owned by Air China). Direct flights to London from Hong Kong soon began. Air China faced competition at its home base from Air France, which increased its four flights a week to Beijing, begun in 1997, to daily service. British Airways also wanted to increase its frequencies (it was operating 18 flights a week to China).

In mid-2000, the CAAC repeated earlier calls for a consolidation of the ten airlines it controlled into three. (Air China, China Southern, and China Eastern were to each acquire the smaller airlines.) Apart from the ten CAAC airlines, there were another 24 smaller carriers that had been formed by provincial or private interests.) Price wars had proved so destructive that the government banned discounting. However, no deadlines or plans for financial support for ailing carriers were made. To aggravate the airlines' financial troubles, the CAAC blocked a proposed merger in September 2000 between Air China and China Southern on anti-competitive grounds.

In January 2001, the CAAC's ten airlines announced they had agreed on a merger plan. Air China was to acquire China Southwest Airlines and China International Airlines, the country's fourth strongest domestic airline. This was to create a group with assets of ¥56 billion (HK$ 52.5 billion), including 118 aircraft. On October 28 2002, Air China consolidated with China National Aviation Corporation and China Southwest Airlines.

Air China Boeing 737-800 painted with Beijing Olympics 2008 Livery at Beijing Capital International Airport
Air China's Hub at Beijing Capital International Airport

During 2004 as part of a consolidation of the Chinese aviation industry, Air China absorbed Zhejiang Airlines (a subsidiary of CNAC). On 15 December 2004 the company listed its shares on the Hong Kong and London Stock Exchanges. Air China has shareholdings in Air China Cargo (51%), Air Macau (51%) and also holds majority shares of Shandong Airlines.

In March 2005, Air China was in talks with Swire Group, the largest shareholder of Cathay Pacific, for talks with Air China acquiring Cathay Pacific, and Cathay Pacific acquiring a majority stake of Dragonair. In return, the Swire Group would become the largest individual shareholder of Air China's parent company. Both airlines subsequently announced that the airlines will not merge completely in the foreseeable future, and Swire expressed its commitment in remaining as the largest shareholder of Cathay Pacific. It was also announced that Air China would cooperate with Cathay Pacific by codesharing flights in late 2005, and would partner with Asia Miles in the second-half of 2005.

As of January 2005, Air China is owned by China National Aviation Holding Company (CNAH) (69%), public floatation (21%) and Cathay Pacific (10%). On May 22 2006, Air China signed an agreement with Lufthansa and was officially invited to join Star Alliance, a rival airline alliance of Oneworld, of which Cathay Pacific is a member. A few days later on June 9 2006, a joint announcement revealed a new shareholding structure in which Air China will acquire a 17.5% stake in Cathay Pacific, while the latter will own 20% of the former. Air China is scheduled to join Star Alliance on December 12, 2007.

Meanwhile, Air China is aiming to become a super airline by considering acquiring a stake or full ownership of China Eastern Airlines, which has had its shares go down in recent years. Other airlines bidding to acquire China Eastern are Singapore Airlines and Cathay Pacific.

Operations

Air China operates in four segments:[4]

  • Airline Operations segment, which comprises the provision of air passenger and air cargo services;
  • Engineering Services segment, providing aircraft engineering services, such as aircraft maintenance, repair and overhaul services;
  • Airport Terminal Services segment, offering ground services that include check-in services, boarding services, premium class lounge services, ramp services, luggage handling services, loading and unloading services, cabin cleaning and transit services,
  • Others segment, which comprises the provision of air catering services and other airline-related services.

Subsidiaries

Financial performance

For fiscal year ending December, 2006:

  • Sales: $5,747.4M
  • One year growth: 21.1%
  • Net income: $422.7M
  • Income growth: 38.1%

Destinations

Main article: Air China destinations

Air China's route network extends from China to Asia, Middle East, Western Europe, North America and South America. The majority of the routes operate from its Beijing Hub. It currently operates a significant number of Asian, Australian and European destinations from Shanghai Pudong International Airport. This will also extend to North America when it adds an additional San Francisco service, complimenting its service from Beijing and complimenting United Airlines codeshares on the route. It also has some international routes operating and connecting from Chengdu Shuangliu International Airport, Chongqing Jiangbei International Airport, Dalian Zhoushuizi International Airport, Hangzhou Xiaoshan International Airport, Kunming Wujiaba International Airport, Madrid Barajas International Airport, Nanning Wuxu International Airport and Xiamen Gaoqi International Airport.

In the past, it has operated a Beijing-San Francisco-New York Service but it was replaced with non-stop Beijing-New York service after several trials of flying over the north pole, cutting the time by 3 hours. In the past, Air China operated service to Berlin, Belgrade, Istanbul, Manila, Nagasaki, Seattle and Zurich from Beijing but later discontinued in the mid 90's. Vienna service was discontinued in 2005 and it is currently operated by Austrian Airlines (although Austrian discontinued service to Shanghai in 2007). However, services to Berlin, Istanbul and Zurich are set to restart between 2008 and 2009.

Air China has applied for nine new European and two new North American destinations, to start from March 2008 to October 2009 from its Beijing Hub. Two more destinations will be added to the Shanghai Hub. These routes will be operated by A330-200 and Boeing 787 dreamliners.

Currently, Air China does not fly non-stop from Beijing to Australia. The routes stop at Shanghai and then continue to Melbourne/Sydney. However, from December 3 2007, Air China will delink Melbourne from Sydney to offer a direct Beijing-Shanghai-Melbourne. Beijing-Shanghai-Sydney will be reduced from daily to 4 times weekly and introduced non-stop Beijing-Sydney 3 times weekly. These new schedules will add an extra 40% capacity and to strengthen their position as the airline choice between Australia and China.[1] In the past, the service between Australia and China have been operated by Boeing 747-400, Boeing 777-200 and Boeing 767-300ER.

On the December 10th, 2006, it made its first flight to Sao Paulo (via Madrid), which became its first South American destination. The service began with the B767-300 aircraft but despite the popularity, the service has been upgraded to A330-200. This is currently Air China's longest route.

Routes to Australia, Frankfurt, Madrid and Sao Paulo currently operated by Airbus A330-200 may be replaced by Boeing 787 Dreamliners to ensure the best services on these routes. The Boeing 787 Dreamliners will be used on flights to Toronto and Washington, D.C. when they are launched.

Fleet

Passenger

As of November 2007, Air China fleet includes of the following aircraft:

Air China Fleet
Aircraft Total Passengers
(First/Business/Ecomomy) 		Routes Notes
Airbus A319-100 33
(2 orders) 		128 (8/120) Domestic
Airbus A320-200 5 164 (8/156) Domestic, Asia
Airbus A321-200 (24 orders) Domestic Entry into service: 2008
Airbus A330-200 11
(9 orders) 		283 (12/271)
240 (36/215) 		Domestic, Asia, Europe, Australia,
Vancouver and Sao Paulo 		One in Star Alliance Livery (B-6091)
Airbus A340-300 6 255 (8/28/219) Europe
Boeing 737-300 38 128 (8/120) Domestic
Boeing 737-600 6 Domestic
Boeing 737-700 20 Domestic, Asia
Boeing 737-800 36
(21 orders) 		167 (8/159) Domestic, Asia
Boeing 747-400 4 406 (18/40/348) Europe, North America
Boeing 747-400 Combi 8 307 (18/40/249) Europe, North America
Boeing 757-200 13 200 (8/192) Domestic, Asia
Boeing 767-200ER 3 East Asia
Boeing 767-300 4 South East Asia
Boeing 767-300ER 3 225 (10/26/189) Europe, South East Asia
Boeing 777-200 10 345 (49/296) Domestic, Asia and Australia
Boeing 787-8 (15 orders) Entry into service: 2008

Cargo

Air China Cargo operates the following aircraft as of November 2007:

Air China Cargo Fleet
Aircraft Total Notes
Boeing 747-200F 4
Boeing 747-400F 5
Tupolev Tu-204-120C (3 orders)

As of November 2007, Air China's average fleet age was 8.0 years old. [5]

Air China has two other business jets: one Gulfstream IV and one Bombardier Learjet 45.

Aircraft orders

Air China has signed agreements with:

  • Airbus, on July 21 2005, for the purchase of 20 Trent 700 powered Airbus A330-200 aircraft, scheduled for delivery from May 2006.
  • Boeing, on August 8 2005, for the purchase of 15 Boeing 787 aircraft for delivery from mid-2008 to end 2010.
  • Airbus, on June 2006, for the purchase of 24 Airbus A320s. These aircraft are to be delivered between 2007 and 2010. However, Air China has no plans to order the Airbus A380 in their fleet, because they think that it just makes more sense by using one kind of Jumbo jet. Before, Airbus has stated that Air China were to be the next few customers to order the A380, however, it may order the A380 superjumbo since they did not have a plan to rule out purchases of the big Airbus plane in the future.

While Boeing's orders page for 2006 reflects this order, there have been no formal news releases indicating the following:

  • Boeing, on January 17 2006, for the purchase of 10 Boeing 737-800 aircraft for delivery from end 2007 to end 2008.

Previously operated

A couple of Lockheed Hercules aircraft superseded Antonov An-12s in the freighter role. Four BAe 146 "Whisperjet" passenger aircraft were returned to the United Kingdom during 2003. 4 Boeing 747SPs were retired and 4 Boeing 747-200s have been converted to freighters. A Boeing 737-200 and 3 Boeing 737-300s have been retired. Two Boeing 767-300ERs have had leases expired and were then deliverered to Varig. One Boeing 767-200ER was lost due to a crash in 2002.

Codeshare agreements

As of October 2007, Air China had codeshare agreements with the following airlines:

Former codeshare agreements

  • Northwest Airlines (began 1996, suspended in 2002): Detroit to Beijing and Shanghai (operated by Northwest Airlines) but suspended due to the SARS crisis. After NWA suspended non-stop flights to China, Air China decided to terminate the codeshare between the two airlines.
  • Varig (suspended in 2006 due to collapse): Beijing to Frankfurt (operated by Air China) and Frankfurt to Sao Paulo (operated by Varig). However, Air China itself began flying to Sao Paulo via Madrid in December 2006.

Air China Companion

File:Air china wearing star alliance logo in fueslage.JPG
Air China A330-200 painted in full Star Alliance colours.

Air China Companion is the frequent flyer program for Air China. This is the first frequent flyer program to be launched in China. It was designed to allow frequent flyers travelling internationally and domestically with Air China and its partner airlines.[6]

Members earn accumulated mileage points for awarded tickets on Air China and other partner flights. There are flight mileages and partner mileages. Flight mileages are for members flying with Air China while partner mileages are for members taking Partner Airlines of Air China. The companion card may be upgraded to VIP status. There are special redemption rates for VIP members - Gold card members and Platinum card Members.

  • Gold card members: members will earn 25% mileage bonus on credited flight mileage.
  • Platinum card members: members will earn 50% mileage bonus on credited flight mileage.

Partners

In addition to its soon-to-be Star Alliance partners, Air China has frequent flyer partnerships with the following airlines:

Accidents and incidents

See also

Notes

  1. ^ Introduction of Air China
  2. ^ Channel News Asia - Air China stats
  3. ^ "Directory: World Airlines". Flight International. 2007-03-27. p. 55.
  4. ^ Air China Ltd 0753.HK (Hong Kong) Reuters.com
  5. ^ Air China fleet age
  6. ^ "Air China Companion" - about us
  7. ^ Flight International, July 2005
  8. ^ Photo: Air China, Boeing 767-2J6/ER, Beijing - Capital (PEK / ZBAA), China, July 1, 2007, B-2553 (cn 23744/155) Nose landing gear was accidentally retracted during boarding at gate 209. Two people were injured on board.

References

  • "Air China Launches New Service, Works on Image," USA Today, October 9, 1991, p. 8B.
  • "Air China to Stand Alone," Airfinance Journal, March 1995, p. 8.
  • Bangsberg, P.T., "Lufthansa, China Plan More Funds for Aircraft Maintenance Venture," Journal of Commerce, June 24, 1992, p. 2B.
  • Bradbury, Nicholas, "Troubled But Hopeful," Asset Finance & Leasing Digest, June 1994, p. 23.
  • "CAAC Blocks China Southern Merger with Air China," AFX-Asia, September 28, 2000.
  • Chan, Christine, "Link-Up Possible Between Mainland Flagship and Southern Airline; Rumours Fly of Giant Merger," South China Morning Post, Bus. Sec., July 9, 1999, p. 4.
  • Chang, Leslie, "China Intends to Merge 10 Airlines Into Three," Wall Street Journal, July 24, 2000, p. A21.
  • "China: Person of the Week; Making the Trans-Millennium Flight, Wang Creates a Marketable Image," China Daily, December 12, 1999, p. 8.
  • Davies, R.E.G., "Airlines of the New China," Airlines of Asia Since 1920, London: Putnam Aeronautical Books; McLean, Va.: Paladwr Press, 1997, pp. 403-24.
  • Flynn, Ann Amelia, "China's Airlines Take Wing," China Business Review (Washington), May/June 1993, p. 14.
  • Harding, James, "Air China Plans Overseas Float," Financial Times (London), October 15, 1997.
  • Holland, Tom, "China Break-In," Far Eastern Economic Review, October 25, 2001, p. 41.
  • "It's a Jungle Up There: China Tries to Tame Its Unruly Aviation Sector," ChinaOnline, October 25, 2000.
  • Lo, Joseph, "Star Alliance Beckons Air China," South China Morning Post, Bus. Sec., May 24, 2001, p. 2.
  • McGregor, Richard, "Call for Mergers Leaves Chinese Carriers Up in the Air," Financial Times (London), August 1, 2000.
  • Ng, Eric, "Air China Set to Announce Lead Bank for Listing," South China Morning Post, Bus. Sec., July 16, 2001, p. 4.
  • "Rise of the Phoenix," Ground Handling International, July 1999, p. 55.
  • "Ten Chinese Airlines Prepare for Takeoff of Mergers, Alliances," China Online, January 11, 2001.
  • Vandyk, Anthony, "Air China: New Name, New Heights," Air Transport World, February 1991, p. 54.
Wikimedia Commons has media related to Air China.

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