As China is preparing its newest mega airport – the Beijing Daxing Airport – for its opening at the end of September, China aviation regulators have been working to allocate the flight slots at the airport. The new airport – located 46 kilometers south of Beijing – has been under construction for the past 5 years and with a price tag of USD $12 Billion. It was built to help alleviate the burden of handling the growing air traffic in the Beijing area with Beijing-Capital Airport as the main hub of the city. Beijing-Capital has since become the busiest airport in Asia and the 2nd busiest in the world, and flight slots have become increasingly difficult to obtain. The Daxing Airport will have up to 7 runways capable of accommodating 100 million passengers per year
In anticipation for the opening of the airport, Chinese airlines are looking to gain a bigger share of the travel market to/from Beijing. Among the moves that are flight slot allocations to China’s Big 3 airlines which will shape future air travel competition among them in the Beijing area.
Air China Gets a Share of Flight Slots at Daxing
After an initial plan published by the Civil Aviation Administration of China (CAAC) at the start of the year, that plan has since been updated allocating slots to Air China at Daxing. The initial plan called for several airlines including Guangzhou-based China Southern and Shanghai-based China Eastern to shift to the new airport. Air China – based at Beijing-Capital Airport – will remain at its current hub. The plan would the two non-Beijing based airlines a stronger presence at the city, where Air China has been a preferred airline when it comes to slots at the city's main international airport.
According to a report from Hong Kong’s South China Morning Post, the plan was revised during the spring to allow China Eastern to retain some of its routes at Beijing-Capital including the Beijing-Shanghai flights. In doing so, Air China would get 10% of the slots at Daxing. The overall plan would give a 40% share of the flight slots at Daxing to China Southern, followed by China Eastern (30%) and Air China (10%). The remaining 20% of slots would be granted to non-assigned airlines, and foreign carriers would still have a choice of whether to stay at Beijing-Capital or move to Daxing.
The decisions to allocate the flight slots at Daxing among China’s Big 3 airlines provides China Eastern and China Southern a big step to compete with Air China on lucrative routes to/from Beijing after Chinese authorities have relaxed rules on airlines operating similar routes. Where and how Daxing is utilized by the Chinese airlines will also influence their foreign airline and alliance partners on whether to shift their own flights to Daxing. With the 30% share of slots at Daxing, Skyteam airlines such as Delta, Korean Air, or Air France could consider joining China Eastern in moving to the new airport. On the other hand, Star Alliance partner airline Air China keeping most of its flights at Beijing-Capital may see other alliance airlines such as United, Lufthansa, or Singapore Airlines to remain at Beijing-Capital.
Other Chinese Airlines Looking to get their Share of the Beijing Market
In addition to the Chinese Big 3 airlines, other smaller Chinese-based airlines are seeing Daxing as an opportunity to get their own share of the Beijing market. According to the CAAC, seven airlines have applied to launch flights from Daxing to “hot” routes in South Korea and France. The routes are Beijing-Seoul and the Beijing-Paris, which are considered highly lucrative and follow agreements to increase the number of flights with the governments of both countries and China.
Joining the likes of the larger China Southern and China Eastern, airlines such as Xiamen Air, Beijing Capital Airlines, and China United would join them. Xiamen Air has revealed it will also shift its Beijing operations to Daxing in March of 2020, bringing along its subsidiary Heibei Air.
"After the transfer to Daxing International Airport, Xiamen Air will invest more than 50 aircraft by 2025. We will better serve the collaborative development strategy of the Beijing-Tianjin-Hebei Area and the construction of the Xiong'an New Area, by building a fully-covered air network, which includes flights from Daxing to major domestic cities, Southeast and Northeast Asia, as well as Europe, Australia and America," Says Chen Li, assistant to general manager of Xiamen Air said in a report by CGTN.