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The SkyTeam alliance has taken another step forward in cementing its place in the fast-growing North Asian aviation market by adding China Airlines, Taiwan’s largest carrier and the world's seventh largest cargo carrier (by international scheduled FTKs - or eighth largest by total system FTKs), to the fold on 28-Sep-2011.China Airlines' entry comes just three months after China Eastern Airlines and Shanghai Airlines joined the grouping in Jun-2011. China Airlines will be the first Taiwanese carrier to join a global alliance, with rival EVA Airremaining unaligned.
China Airlines will become the 15th member of the SkyTeam airline alliance (see Appendix for full list of alliance groupings). By joining SkyTeam, the Taiwanese carrier will expand its international coverage nine-fold via codesharing to 926 destinations in 173 countries across 14,000 services from the current 1010 destinations in 29 countries.
Some institutional investors have estimated alliance membership will increase the carrier's revenue in 2011 by around TWD6 billion (USD197 million), or around 5% of the total, as reported by Focus Taiwan News Channel, although the carrier has not provided estimates.
The Taipei-based carrier stated it has taken 11 years to gain approval from each of the current SkyTeam members to enter the alliance. "The membership will elevate our global presence, especially in the China region," said Jessica Pan, the airline's public relations manager. Commenting on the alliance membership, China Airlines Chairman Chia-Juch Chang stated that joining SkyTeam is "an integral part of our strategy for increased international growth and profitability".
China Airlines brings a surge in connectivity but just three new destinations to the SkyTeam network: Okinawa and Miyazaki in Japan andSurabaya in Indonesia. From its hub in Taipei, one of Asia’s strongest economies, China Airlines operates a diverse passenger and cargo network throughout the wider Asia pacific region, North America and Europe, with a total of 224 daily departures to 80 destinations worldwide, SkyTeam noted.
SkyTeam increases presence in Taiwanese market by over five-fold
By joining the SkyTeam alliance, China Airlines has increased by over five-fold the grouping's share of total weekly seat capacity to/from/within in Taiwan from 6.1% to 31.8%...
By joining the SkyTeam alliance, China Airlines has increased by over five-fold the grouping's share of total weekly seat capacity to/from/within in Taiwan from 6.1% to 31.8%. The next biggest alliance in Taiwan is oneworld (12.2%), as oneworld member Cathay Pacific is the third largest carrier operating in the Taiwanese market with some 89,000 weekly seats.
Around 45.8% of total weekly seats in Taiwan remains unaligned to a global grouping, as Taiwan’s second largest carrier, EVA Air, is not a member of an alliance.
NB: The colours of the following graphs default to light blue for the largest group, yellow for second largest, green for third, red for fourth and navy blue for fifth.
Taiwan total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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SkyTeam has gained a major boost at Taipei Taoyuan, Taiwan’s largest airport handling 80.5% of the nation’s international seats and 59.5% of total system seats. SkyTeam’s share of total weekly seats has soared from just 1.5% to 40.6%, with oneworld trailing with a 16.3% share andStar Alliance having only a 1.5% share at the airport. China Airlines is the largest operator at Taipei Taoyuan, with over 206,000 weekly seats at present based on Innovata data, or a third of the total.
Taipei Taoyuan total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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SkyTeam's position at Taiwan’s second largest international airport, Kaohsiung, has also increased strongly, from 3.2% to 20.3%. China Airlines is the third largest carrier at Kaohsiung, after TransAsia and Hong Kong-based Dragonair (a Cathay Pacific subsidiary).
Kaohsiung total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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At Taipei’s second airport, Taipei Songshan, SkyTeam’s presence has increased from 1.8% to 11.0%. Songshan is the nation’s third largest airport, with 7.4% capacity (seats) share and the nation’s second largest airport by system capacity (seats) handling 12.7% of total system capacity. China Airlines is the fourth largest airline at Taipei Sonshan, after UNI Airways (a regional subsidiary of EVA Air), TransAsia and Mandarin Airlines, China Airlines’ regional and domestic subsidiary, but ahead of EVA Air.
Taipei Songshan total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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SkyTeam the dominant alliance in China, North Asia and Asia Pacific
The impact is not just confined to Taiwan. In China, where SkyTeam was already strong and China Airlines has an enlarged presence thanks to progressive cross-Strait liberalisation, its share has increased slightly from 38.2% to 38.5%. China Airlines complements the network of existing members, China Southern and China Eastern, and offers an extensive cross-Strait network to 20 major destinations in Mainland China. Star Alliance member Air France has previously stated that with the arrival of China Airlines, Shanghai Airlines and China Eastern into the alliance in 2011, a total of 135 destinations will be offered by SkyTeam in Greater China alone.
China total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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In the crucial North Asian region, SkyTeam has slightly extended its dominance, with its capacity share in the region increasing from 28.3% to 29.9%, ahead of Star Alliance (26.2%) and significantly to oneworld (9.5%).
North Asia total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
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In the wider Asia Pacific market, SkyTeam now commands 19.1% of total capacity (seats), up 1 percentage point and now trails Star by less than one percentage point.
Asia Pacific total capacity (seats) share (%) by alliance: Sep-2011
Before | After |
|---|---|
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The alliances battle for Asia heats up
China Airlines becomes the 15th airline to join SkyTeam, which is expected to grow to 19 members by 2012, with the addition of Garuda Indonesia, as well as Aerolineas Argentinas, Saudi Arabian Airlines and Middle East Airlines. Xiamen Airlines has also formally submitted an application to SkyTeam Alliance. The carrier, a subsidiary of China Southern Airlines, has received unanimous approval from the SkyTeam Alliance Council, with the alliance to now form a project team to work with the Chinese carrier over the next 12 months to ensure the carrier satisfies all requirements prior to joining. Xiamen Airlines is expected to formally join the alliance in late 2012 to mid-2013.
A fascinating battle between the two alliance heavyweights, Star and SkyTeam is set to unfold in coming years, though oneworld is fighting back with its own list of future members, including Kingfisher and Malaysia Airlines.
APPENDIX:
The second largest of the three major alliances, SkyTeam has 15 members, including Aeroflot, Aeromexico, Air Europa, Air France, Alitalia, China Eastern, China Southern, Czech Airlines, Delta Air Lines, Kenya Airways, KLM, Korean Air, TAROM and Vietnam Airlines, operating to 168 countries and regions.
SkyTeam | Star Alliance | |
|---|---|---|
Alliance members | ||
Cathay Pacific | Aeroflot Aeromexico Air Europa Air France Alitalia China Airlines China Eastern Airlines China Southern Airlines Delta Air Lines Kenya Airways Korean Air Shanghai Airlines Vietnam Airlines | |
Pending Members | ||
Malaysia Airlines | China Airlines Garuda Indonesia Middle East Airlines Saudi Arabian Airlines Aerolineas Argentinas Xiamen Airlines |
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