China Eastern Airlines is close to introducing new widebody aircraft to its fleet, possibly the Airbus A350-900 or Boeing B787-9, as its North American routes have turned profitable for the1st time, said chairman Liu Shaoyong.
Speaking on the sidelines of the International Air Transport Association’s annual general meeting in Miami, Liu said the rise of Chinese outbound travel - which exceeded 100 million passengers for the 1st time last year - is the biggest theme reshaping Chinese airlines’ revenue mix and China Eastern’s strategy.
While mainland airlines have been aggressively expanding their international long-haul businesses, they have struggled to make money on those routes for lack of high-yield passengers to cover the high operating costs.
Liu said a combination of strong traffic, lower fuel prices and lower operating cost with the deployment of its new long-range Boeing 777-300ER has put China Eastern’s North American routes - which includes New York, Los Angeles, San Francisco, Hawaii, Vancouver, and Toronto - in the black so far this year.
“We have been flying international long-haul for more than 20 years. There have been profits reported in certain months by certain routes, but for the entire North America market to turn in profits, this is the first time,” he said, adding it came earlier than expected in a plan to make North America a “core profit generator” in 3 years’ time.
Liu said China Eastern is looking at next generation widebody jets to replenish its fleet after all of its 20 Boeing 777-300ER jets ordered would have arrived by 2018.
Source: José Bejarano
“We are looking closely at options and studying their compatibility with our networks...we may have a decision to announce by the end of this year or early next year,” he said.
Source: Manuel Belleli
“It is basically between the A350-900 and the B787-9,” he said, declining to indicate the size of possible orders. Liu added they are not considering the A380 double-decker at this stage.
China Eastern had in 2011 cancelled an order for 24 Boeing 787-8 Dreamliners, which is a smaller and shorter-ranged variant of the 787-9 that Liu said is “not suited for China Eastern’s network expansion plans”.
Source: Manuel Belleli
Liu said the investment in new widebody jets would mainly be for the airline’s international routes, which currently contributes around 35% of revenue.
He said he plans to raise that ratio to 40% by 2020, when China Eastern may have three daily flights to New York and Los Angeles.
Based on the article “China Eastern close to adding widebody aircraft to fleet” published in South China Morning Post.