According to China Eastern chairman Liu Shaoyong, three structural changes have happened in the domestic airline industry in recent years—faster growth of international market demand, especially international long-haul routes; bigger impact from the domestic high-speed rail; and fiercer competitive pressure from non-Chinese airlines, local airlines and low-cost carriers.
The Shanghai-based carrier introduced its first of 20 wide-body Boeing 777-300ERs in the 2014 second half, which was placed in service on its North American route. “With the gradual replacement of older fleet in 2015, we are confident of improving our financial performance on international routes,” Liu said.
China Eastern CEO Ma Xulun said the carrier’s low-cost subsidiary China United Airlines would implement its specific transformation plan this year, which includes introducing a strategic investor, further exploring Northeast China market and getting more slots of Shanghai Pudong Airport.
In addition, China Eastern also plans to increase ancillary revenue to improve its financial performance. “It is estimated that the total ancillary revenue of 200 carriers around the world will reach $50 billion this year, but our Chinese carriers just started this practice,” Liu noted.