COMPANY PROFILE -China Southern Airlines
Business Sector :Aviation
Operating Geography :Asia, China, Global
About China Southern Airlines :China Southern Airlines is China’s largest airline and world's seventh-largest airline measured by passengers carried. It is also the third largest globally in terms of fleet size. It was established in 1988 and is headquartered in Guangzhou, China. The company has the China Southern Air Holding Company as its parent company. It is a state owned enterprise with primary hubs located at Guangzhou Baiyun International Airport and Beijing Capital International Airport, The airline provides services to 224 destinations in 40 countries, including passenger and cargo transport and mail delivery. It also engages in other services like hotel and tour operations as well as general aviation and aircraft maintenance. The airline has one of the biggest fleets of Asia with over 840 passenger and cargo aircraft. In 2018, the airline was granted the 2-Star Flight Safety Diamond Award by the Civil Aviation Administration of China (CAAC) for maintaining the best safety records in China. SKYTRAX, the world's most prestigious airline performance evaluation organization, has also given it a Four-Star status and also recognized it as the World’s Most Improved Airline” in 2018. In March 2019, it started a frequent flyer program partnership with American Airlines. Its subsidiaries include Xiamen Airlines, Shantou Airlines, Guizhou Airlines, Zhuhai Airlines, Chongqing Airlines and Henan Airlines.
The mission statement for China Southern Airlines reads, “connecting around the world for a prosperous life.” It vision is “building a world-class air transport enterprise with global competitiveness”.
China Southern Airlines Revenue :RMB 114,981 million – FY ending Dec 31st 2016
Competitive Analysis of China Southern Airlines
|1. Largest Chinese airline with a fleet of more than 700 passenger and cargo aircraft and wide global network|
2. Relatively young aircraft fleet with an average age of 6.6 years which results in low operating cost
3. Strong technology infrastructure and own flight training college
|1. Major dependency on the China-Australia route accounting to 22% Available Seats Kilometer (ASK)|
2. High foreign currency liabilities, especially in US$ which will increase interest expenses in wake of depreciating RMB
|1. Strategic tie-up with American Airlines will improve market share and access to diverse locations|
2. China trips per capita well below that of western markets underscoring the strong market potential
3. China to become world’s largest aviation market by 2024, according to IATA aided by rapid growth in outbound travel
|1. Formidable competition from domestic players like with China Eastern Airlines and Air China.|
2. Significant depreciation of the RMB to result in foreign exchange losses for China Southern
3. Expansion of high-speed railway network across China will impact growth in air travel
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Detailed SWOT Analysis of China Southern Airlines
1. Largest Chinese airline with a fleet of more than 700 passenger and cargo aircraft and wide global network: China Southern Airlines is the largest Chinese carrier with a fleet of more than 700 passenger and cargo aircraft, the most by an Asian airline. The carrier is well developed network across more than 1000 destinations across 177 countries globally with passenger traffic amounting to nearly 115 million in FY16. With the SKYTEAM alliance the airline group it has been the top Chinese carrier for 38 consecutive years and also has the best safety record amongst Chinese airlines for 17 years. China Southern Group is also the leading carrier across China – Australia and New Zealand, China – South Asia and Central Asia routes and also across the newly formed “One Belt and One Road” network.
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References used in China Southern Airlines Analysis Report
1. China Southern Airlines Annual Report 2018 - https://www.csair.com/en/about/investor/yejibaogao/2019/resource/c0bdc4d0789ce1cdcefe8cffef45749d.pdf
2. China Southern Airlines Annual Report 2017 - https://www.csair.com/en/about/investor/yejibaogao/2018/resource/d3a41612260b0cc0cf4482c45f7e8cb3.pdf
3. China Southern Airlines Revenue 2018 - https://www.csair.com/en/about/investor/qitabaogao/2019/resource/e2b1805d87b4b5c45dcb888a359faab9.pdf
4. China Southern Airlines Company Overview - https://www.csair.com/en/about/gongsijianjie/
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China Southern Airlines SWOT & PESTLE Analysis - SWOT & PESTLE.COM
SWOT & PESTLE.com (2019). China Southern Airlines SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/china-southern-airlines/ [Accessed 12 Dec, 2019].
In-text: (SWOT & PESTLE.com, 2019)
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China Southern Airlines SWOT analysis has been conducted by senior analysts from Barakaat Consulting.