The Development Trend of Chinese Regional Aviation and the Requirement Analysis of Regional Jets Grand China Express Co., Ltd October, 2008

The Development Trend of Chinese The Development Trend of Chinese Regional Aviation and the Regional Aviation and the Requirement Analysis of Requirement Analysis of

Regional JetsRegional Jets

Grand China Express Co., Ltd

October, 2008

catalogue

I. The actuality and characteristics of China branch line aviation

II. The development trend of internal branch line aviation

branch line airports

The flight course net

The operational environment of branch line flight course

The branch line fleet

III. The market demand of branch line jets

The division of branch lines

The branch line aviation classification requirements of branch line airplanes

The summary of the requirements of the branch line jets.

The actuality and characteristics of China branch line aviation

1. The fast and convenient ground transportation is squeezing the branch line aviation market , and branch line aviation is in the dry tree.

2. The utilization rate of branch line airports is low

3. The branch line net has its own feature: first, there is not spoke-branch line net as abroad, except in some special areas. Second, the utilization of

branch line airplanes non-stop flight to the three gateway airports becomes a survival flight course of many branch line airports.

4. The business environment of branch line aviation is poor, the shortage of Runway capacity and the limitation of Air Traffic Control System are the

two main obstacle of the development of branch line aviation.

5. Branch line flights and route line flights compete on the same stage, and the fare policy of route line flights suppresses the up space of branch

line airports and branch line airplanes.

6. The cost of branch line airplanes is high, and the fuel cost per ton Km is high.

7. The branch line airplane types can not be squeezed, and the capability can not fit the demand of the flight course. The main force of branch line is

50-30 seats airplanes, and there is a gap of transport capacity between 50-70 seats airplanes and 70-100 seats airplanes.

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The development trend of internal branch line aviation

Now

The imbalance

of the developmen

t of route and branch

line

？The economy of branch line airports is underdeveloped compare with the central cities, and the Personal consumption is on the low level. There are also many limitations about business travelers.

Instead, the fare of branch line flight courses is high in fact, and the ground mode usually becomes preferred.

5-10 Years in the future

Branch line

airports

According to the requirements of economical and social

development both collectively and partially , achieve the reasonable

stationing; With the overall expansion of the branch line transport

capacity, the flight course and scheduled flights tend to be stable.

Branch line airports tend to be sense of their own orientation, and

take up initiative status gradually. The commonweal temperament of

branch line airports received fully understand, and the branch line

airplanes got a chance of developing equally.


Branch line net

The traditional regional spoke-branch line net boost up continuously, and the demand of branch line transport capacity increases stably.

Branch line nets such as the spoke-branch line express formed gradually in hub airports or economical center.

Branch line airports and central airports/hub airports in the region and over regional economic central airports form a point to point mode. The demand of main branch line and sub-major route line flight course net increased more.

The tour off-season take the place of the “migrant net” and becoming popular gradually.

Using the branch line airplanes (50 seats or less than 50) to connect the “short thin” flight courses fit the market demand, but the perfect ground service is necessary.

The long thin flight course between the cities which contact closely in the aspect of politics and economy will become a great meal for large-class seat branch line airplanes.

The secondary flight course net which has well situated air distance and direct fly to the foreign secondary cities can be supplement to the international route line net.


Branch line operating

environment

The branch line operating environment will not have fundamentally improvement in recent 3-5

years.Flight course admittance

Flight course admittance especially Time allocation doesn’t incline to the branch line flight course obviously.

The timing resources

The timing resources is related to fundamental construction, and it has the construction period problem. It will turn for the better in the future, but the marginalisation problem of branch line aviation will also exit.


large-class seats branch line airplanes (70-100 seats) becomes the main type of branch line airplanes.

With the effect of the VIP economy, the large-class branch line airplanes need first class/business class to fulfill the comparatively high-end demand and distinctive service.It is the result of market segment that small-class branch line airplanes is indispensable, and it is also the demand of branch line company replacement operation and market exploitation.

The high cost problem which aroused by high oil price will still be sensitive, and it will probably become a lion in the way of the development of Chinese branch line fleets.

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The market demand of branch line jets

The development course of the branch line airplanes in the world

airscrew

Branch line jets with 50 seats

Branch line jets with more than 70

seats

Before 1980s

1980s up to now

After 1990s

The coming out of branch line jets has aroused a branch line

aviation revolution which swept the world, and branch line jets are

the main type of branch line airplanes all the same.

The classification of branch lines Market Space

Different demand of the market

不同机型需求

Branch line

Main branch

line

Sub-major branch line


Concept Definition

Branch lineThe flight course whose originator is branch line airport with a throughput less than 200 thousand, its passenger flow is less than 15000 persons per year.

Main branch line

Oriented set off from branch line airports with a throughput between 200 thousand to 1 million, flight course flow between 25000 to 40000 persons per year, including the flight course between branch line airports and the Capital Airport.

sub-major route line

The flight course between regional hinge airports (10 million and above) and route line airports (mainly about provincial capitals)The flight course between Economic central cities (non-provincial capitals such as Wenzhou, Wuxi, Baotou, etc) and regional hinge airports.The flight course between route line airports (mainly about the airports of provincial capitals) and tour center airports /non-route line airports. The point to point long thin flight course between the cities which have close contact on the aspect of economy and politics.


Market The suitable type Market analysis

Branch line

30-50 seats jets/turboprop

This kind of flight is mainly about business.

Although it is not that sensitive with fare, fast

and comfort is expected.

The turboprops: fuel burning efficient, low

cost, less demand of runway. However, the

passengers have prejudice to them, and the

choices of the passengers influence the

launch of these two types.

Main branch

line

50-70 seats jets/turboprop

The passenger origin are mainly business

passengers, There are potential lie fallow

passenger movement, and it need a

comparatively cheap fare system.

If turboprop can be scale operated, it will

practice well in the market based on its low

fares.

The demand of branch line aviation to the classification of branch line airplanes


The sub-major route line

70-100 seats jet

Broad market

Face the competition with the large airplanes.

——Seat class fit with the passenger flow, low waste

——Less seats than route line airplanes, demand less passengers to reach the profit load factor.

——Be able to increase the frequency of flights with the same number of passengers.

——100 seats layout, non of middle seats, solve the problem of uncomfortable travel of one third of the passengers.

Advantage


Market The suitable type Market analysis


1. There is a huge potential market of large-class seat branch line jets in China. It can

be operated between route lines and branch lines, and it operating cost is lower than

small-class seat ones.

2. The arrangements of market and flight course determine the sequence of branch

line jets. Small-seat airplanes are indispensable. However, the small-seat branch line

jets are seriously influenced by the price of fuel, and it influenced the market share

directly.

3. In the environment of high price of fuel, turboprops which based on their low cost

advantage will compete with branch line jets in both traditional and large branch line

market. However, it will not be dominant because of its low market acceptance.

4. The fundamental way of branch line jets is to reduce the using cost, and our ultimate

goal is to promote the civil aviation popularization. Otherwise, we are not able to face

the competition of both ground transportation and turboprops.


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The Development Trend of Chinese Regional Aviation and the Requirement Analysis of Regional Jets Grand China Express Co., Ltd October, 2008