Resilient domestic market
While many airlines around the world struggle with falling demand, China's domestic traffic resumed its boom after a short slowdown in 2008, thanks largely to the government's timely stimulus action. According to CAAC data, mainland China RPKs grew by 13 percent in the first half of 2009. Domestic traffic, which has seen passenger enplanements increase by almost 20 percent to 100 million for the first six months, has driven this growth. International traffic, on the other hand, is down by about 17 percent to 7 million passengers for the first half of 2009.
Largest Asia Pacific market
China is forecast to be the fastest growing economy in the world, with GDP growth averaging 7.2 percent per year over the next 20 years. Within the next decade, China will surpass Japan to become the second largest economy in the world. By 2028, China will account for 42 percent of Asia Pacific's total economic activity, a giant leap from 24 percent in 2008.
To accommodate the phenomenal growth in demand for air travel, China will need to more than triple the size of its fleet to 4,610 airplanes by 2028. China will take delivery of 3,770 new airplanes, which is 42 percent of the entire Asia Pacific market and valued at $400 billion dollars. Single-aisle airplanes serving the domestic market will account for 70 percent of the new deliveries.
Crossing the Taiwan Strait
Air services between China and Taiwan achieved a major milestone on August 31, 2009, with the initiation of scheduled nonstop flights across the Taiwan Strait, the first scheduled service since 1949. The number of flights and city pairs has grown remarkably with liberalized air services agreements. Continued liberalization of air services will further stimulate demand for air travel.
Infrastructure and aviation services
China's ambitious economic growth warrants investment in as many infrastructure projects as possible. This includes a modern and integrated ground and air transportation system. Any air traffic diverted to upgraded ground transportation, including high-speed rails and highways, will likely be more than offset by the resulting boost in personal income associated with these infrastructure improvements.
