China’s Big State Carriers Still Lagging

By Bradley Perrett
Source: Aviation Week & Space Technology
September 23, 2013

For insight into the competitiveness of China's main airlines, overlook their domestic operations, which are generally profitable—though not lately. Domestically, the carriers compete mainly against each other. Their true strengths and weaknesses are evident in international operations, where the big Chinese carriers shy away from fully competing with experienced foreign airlines.

“They are not as strong as they look,” says analyst K. Ajith of Singapore brokerage UOB Kay Hian, dismissing their domestic performance as an indicator of management efficiency. Yes, China Southern Airlines is now Asia's largest carrier, with compatriots Air China and China Eastern Airlines not far behind, and all three are growing powerfully year after year. But their reluctance to put much resources into the international market is proof that, a quarter of a century after they or their predecessor companies were formed, the giant industry is still not up to world standards.

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