Demand for Air Travel Increasing
The demand for air travel in China is expected to explode in the coming decade and a half. The International Air Transport Association says that, by 2036, the number of annual air passengers in the country will increase by more than 900 million people, to 1.5 billion passengers per year. To put this number in perspective, currently, U.S. domestic airlines carry 1.1 billion passengers per year.
What’s more, demand for both domestic and international air travel has been steadily increasing in the country, and experts believe that this demand could grow even higher in the coming years.
Airport Construction Growing To Meet Demand
To meet the demand for air travel, the Chinese government is building airports at a rapid pace. In 2010, there were 175 civil airports in the country. But by next year this number is expected to increase to 260. This means that the country is building around 8 new airports every year.
Prosperity Driving Demand
What is driving demand for air travel in China is the economic prosperity of its citizens. In 2015, only 10% of the country’s citizens were considered an upper middle class or higher. But by 2030, it is estimated that more than a third of the country’s population will be in this economic bracket.
Demand for Air Travel Increasing Even in Remote Regions of the Country
Interestingly, China is not just building airports in its high population centers. They are also steadily building airports in the country’s more remote regions, to meet the demand in these growing areas. 5 of these regions have seen the construction of at least 5 airports in the last ten years. This includes:
- Inner Mongolia (9 airports)
- Guizhou (7 airports)
- Xinjiang (7 airports)
- Sichuan (5 airports)
- Heilongjiang (5 airports)
Chinese Airlines Still Lagging Behind Foreign Carriers
While the airline industry in China is growing at an incredible pace, the country’s airlines still have a considerable way to go before directly competing with international carriers in terms of passenger volume and revenue.
Airlines measure passenger volumes by RPK (revenue passenger kilometers), and in this statistic, the 3 leading Chinese Airlines (Air China, China Eastern Airlines and China Southern Airlines) are well behind the leading U.S. carriers, which includes Delta, United, and American. While the 3 U.S. airlines all have RPKs in the range of $338.2 billion to $359.4 billion, the 3 Chinese airlines have RPK ranges of $167.5 billion to $206.1 billion.
As more airports get built in the coming years and as competition between airlines grows, this is expected to provide tangible benefits to airline passengers, in the form of increased choice and lower fares.