China Air Passenger Growth Expected To Slow Below 10% In 2017

Evergreen, Colorado, June 19, 2017. A new forecast indicates that in 2017, China will see a slowing rate of air passenger growth, to between 7.0% and 7.5%, substantially below the 11.1% expansion in 2016. Nevertheless, this does not affect the enormous future air passenger expansion that China will experience in the future.

In addition, the forecast indicates the US will see nearly 29 million leisure visitors from China over the next five years. This number could possibly be much higher, if US airports engage in aggressive outreach.

Highlights of the Boyd Group International Airports:ChinaTM forecast were reviewed in a keynote speech by Michael Boyd at the recent Premium Business Summit of the American Society of Travel Agents in Washington.

Full Flights. Full Airports. While growth rates of China’s economy may be slowing, the forecast concludes that the latent demand for air transportation still outstrips capacity. “The average load factor experienced at Chinese airports will increase from 86.0% in 2016 to almost 88% this year. It is clear that China is experiencing constriction of traffic growth simply due the fact that much of the nation’s airport capacity is reaching its limits,” Boyd, president of the US-based consulting firm, pointed out.

The strongest growth will be seen at secondary airports. As an example, Beijing Capital will see less than one percent more seat capacity in 2017, while Mianyang, the second largest airport in Sichuan, will see almost 70% passenger growth this year alone.

“The opening of the new Beijing Daxing Airport will be like taking a cork out of the China air transportation system, with effects being seen at airports across China,” the report points out. “When other new airports come on line at Xiamen, Wuzhou and more than three dozen other cities, annual passenger levels will return to double-digit growth rates.”
Boyd Group International, Inc.

Underscoring this, over the five-year period, 2013 through 2017, the lower 25 of the top 50 airports will register 61% growth, while the larger facilities will register “only” a 39% increase.

China-US Traffic To Grow, But Demand Is Artificially Constricted. Annual China-US air traffic is expected to expand by 44% percent over the next two years, according to the forecast. “There are a number of Chinese cities that today can easily support additional flights to key US points,” the report notes. These include Xiamen, Guiyang, Tianjin, and Hangzhou.

The report identifies key US airports where this new access is likely. “The new relationships between US airlines such as American and Delta on one hand, and China Eastern and China Southern on the other, signal a new genre of cooperative alliances across the Pacific,” Boyd said. “Not only will this result in more system traffic in both nations, but also represent opportunities for US airports to gain more one-stop and nonstop access to China.” Airports estimated to see the most potential are Las Vegas, Dallas/Ft. Worth, Orlando, Miami and Atlanta, the latter three of which currently have no nonstop China flights.

Most of the passenger expansion will focus on second and third-tier Chinese cities gaining nonstops to US carriers’ hubsites, due to the new marketing relationships between the three major US carriers and Chinese partners. However, the report notes that non-hubsite metro-peripheral US airports, such as Milwaukee, Ontario and Ft. Lauderdale could also see nonstop service.

US Gateways: Competitively Unprepared. Even in light of these potential opportunities, the projected traffic is a fraction of the true opportunity. The report notes that as more Chinese airlines consider adding international routes, US destinations face severe disadvantages. One is the difficulty in obtaining a US visa, which still requires a trip to one of the few US consular offices in China. The second is more compelling: US air gateways are simply not prepared to functionally handle Chinese visitors.

“Every major airport in America will claim they’re ‘China-ready’,” Boyd noted. “Chinese visitors would strongly disagree.” At most airports, Chinese would find Mars to be more welcoming, he quipped, pointing out as just one example that even official US Customs signage is still in traditional Chinese, which hasn’t been used on mainland China in over half a century.
Worse, there is near-zero consideration for facilitation of connecting Chinese passengers beyond the gateway. Despite the huge potential, “navigating from customs to domestic flights is a process with usually no way-finding for Chinese visitors,” the report illuminates. “As a result, most Chinese visitors start their US surface itineraries from the gateway city. This materially deprives many US regional airports of valuable traffic.”

Las Vegas As The Example. Today, Las Vegas McCarran is the only US gateway that has implemented a comprehensive system to make the facility functionally-welcoming to visitors from China, Boyd contended. “McCarran has invested in a planned, systemic application of way-finding and proactive informational outreach that anticipates the needs of their guests from the Middle Kingdom. Virtually every other US gateway falls short.”

Airports:ChinaTM is produced by Boyd Group International, and is the new source of aviation data focused on China-US air travel. The complete report will be reviewed at the 22nd annual International Aviation Forecast Summit, August 27-29 at the Wynn Las Vegas Resort. The Summit will be preceded by the 3rd annual China-US Travel Opportunities Symposium, which will specifically address the evolving nature of this important visitor sector.