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Beijing's new mega airport will challenge Air China's dominance

The new airport has been designated by authorities as the hub for members of the SkyTeam alliance

Bloomberg 

Like ancient warlords, China’s three biggest airlines have dominated their regional cities: Air China Ltd. controlling Beijing, China Eastern Airlines Corp. holding sway in the financial centre of Shanghai, and China Southern Airlines Co. ruling the roost down in export gateway Guangzhou. Until now. Rising on a plain south of Beijing is a mega airport that is about to change the balance, bringing all three head to head in the capital as it becomes the world’s biggest aviation hub. The new airport, due to open in 2019, has been designated by authorities as the hub for members of the SkyTeam alliance, a global group of airlines that includes China Eastern and China Southern. The two Chinese carriers will each be allowed to capture 40 per cent of the airport’s passengers, gaining coveted time slots to Europe and the US in Air China’s backyard. “This is an absolute game-changer for China Eastern and China Southern,” said Corrine Png, chief executive officer of Crucial Perspective in Singapore. “Having all the SkyTeam alliance members under one roof will enable seamless flight connections.” The invasion of Air China’s regional rivals has repercussions beyond China. As well as dominating their home bases, the big three Chinese players have each carved out a position abroad. Air China, through its Star Alliance ties with Deutsche Lufthansa AG and United Continental Holdings Inc., commands many of the routes to Europe and North America.

China Eastern is the biggest carrier to Japan and South Korea. And China Southern is strong in Australia and Southeast Asia. With access to more slots in Beijing, China Southern and China Eastern would potentially get more access to lucrative North American routes while their SkyTeam partners would get better access to the Chinese capital. In addition, China Southern, the nation’s biggest airline, would be able to draw traffic from its Southeast Asian links to fly via Beijing to the US. Until then, they have to fight for slots at the existing airport which is close to capacity. Air China, part of Star Alliance, whose 28 members include United, Singapore Airlines and Lufthansa, controls 38 per cent of the slots at Beijing Capital International Airport, which handled 94 million passengers in 2016—close to the maximum of 96 million. “There are demands to add hundreds of flights in Beijing every day that get refused because we’re running out of resources,” said Liu Xuesong, general manager of Capital Airports Holding Co., the operator of Beijing’s existing airport. “The city is capable of running dual hubs.” The new $12.9 billion airport in the southern suburb of Daxing, which was approved in 2014, would accommodate up to 100 million passengers a year with as many as seven runways. Liu estimates that by 2025, the two Beijing airports would share 170 million passengers, including 25 million on international flights. Beijing is joining a select list of major cities with two or even three international airports, including London, New York, Tokyo and Paris.

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First Published: Thu, June 22 2017. 22:31 IST
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