China Express officially welcomes its 50th aircraft on 24 June 2020, has plans to induct new aircraft types to further growth

Report by : Gan Yung Chyan

                  / KUCINTA SETIA

Image courtesy : China Express

In the morning of 24 June 2020, China Express officially conducted a water gate ceremony by its staff at its Chongqing Jiangbei International Airport headquarters in front of media to welcome its 50th aircraft, its first new Airbus A320neo aircraft numbered B-30F5, which it took delivery from the Airbus Tianjin Delivery Center on 23 June 2020.

Prior to the introduction of this A320neo, China Airlines has cooperated with Airbus several times and successively introduced 11 Airbus A320 aircraft. With the inclusion of the Airbus A320neo aircraft, the fleet of China Airlines has reached 50, including 12 Airbus A320 and 38 Bombardier CRJ-900, and its regional leading position has been further consolidated.

While the 50th aircraft was included in the China Express fleet, the Agricultural Bank of China also provided a credit of 5 billion yuan to China Express to support the airline's efforts in introducing more new aircraft in the future.

China Express, which serves 126 destinations with 173 flight routes to date, plans to induct the A320neo on new international and domestic routes.

According to insiders of China Express, the introduction of A320neo is mainly based on the following four considerations: First, when flying a long-haul dry and branch route, the cost of A320neo seat kilometres is lower; second, in the case of the already operating A320 fleet, the A320neo fleet there will be no additional costs in training and aviation material management; third, it will form a mismatch with CRJ900, and flexibly configure the capacity according to passenger flow; fourth, prepare for the opening of more international regional flights.

Misplacement, cost reduction, and capacity allocation reflect A320neo's ingenuity in refined operations, and the other core purpose of China Express' introduction of A320neo is still reflected in the expansion of regional route network.

According to information, China Express with 49 aircraft has 173 in-flight routes and more than 1,700 external cooperative routes. According to this ratio, it can be known that this A320neo will contribute about 3 of its own routes to the airlines and more than 30 external cooperative routes.

From the original Bombardier CRJ200 (which had withdrawn from commercial operation in March 2015), to CRJ900, then to Airbus A320, and to the introduction of the A320neo, it can be seen that China Airlines is constantly increasing its capacity and upgrading its capacity. It is the driving force for the rapid growth of the regional aviation market demand, and also reflects the sharp market sense of China Express and the strong strength supporting its layout.

In the face of the sorrows of the commercial aviation industry during the pandemic and the financial difficulty of domestic airlines, China Express has shown its growth against the trend. In addition to the A320neo introduced this time, it has also reached a strategic cooperation agreement with COMAC on 10 June 2020 with plans to introduce and operate a total of 100 ARJ21-700 and C919 aircraft.

China Express started flight operations in 2006. To date, it is the only airline company in the A-share market to achieve a rise in stock price during the epidemic. What is the reason why investors are so optimistic about China Airlines?

On the one hand, China Express is less affected by the pandemic and recovers quickly. During the pandemic, it is the airline with the fewest cancellations and the fastest recovery of airlines in China because most of the company's routes are solo routes. To ensure the smoothness of flights, solo routes were not reduced much.

On the other hand, the scarcity and exclusivity of  China Express in the feeder network was highlighted during the epidemic, showing strong vitality, and the value of its feeder positioning has also been fully reflected.

In May, the flight volume of China Airlines basically returned to the pre-epidemic level, and the recovery rate and execution rate ranked among the best in the industry, which was a lot higher than other airlines, reaching a staggering 94% and 88%.

According to the public financial report of the listed company, China Express successfully controlled the loss in the first quarter to less than 100 million yuan, far below the capital market expectations, which is why the day of the performance announcement, the reason for the daily limit of China Express' shares.

Earlier in the 2019 financial report, China Express achieved a full-year net profit of 500 million yuan, an increase of 103.20% year-on-year. It ranked significantly ahead of the airline's net profit ranking and occupied seventh place.