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China airlines 'bigger threat' to US than Gulf carriers

New report states that the airline industry is changing rapidly and China will replace the US as the largest aviation market.
A China Eastern Airlines plane taking off at Shanghai's Hongqiao airport (JOHANNES EISELE/AFP/Getty Images).
A China Eastern Airlines plane taking off at Shanghai's Hongqiao airport (JOHANNES EISELE/AFP/Getty Images).

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by Neil Halligan

China’s carriers pose a greater threat for US airlines as the international air travel market leaders, according to a new report by aviation intelligence specialist OAG.

The US and Gulf carriers have been embroiled in a spat over claims of $42 billion subsidies, which the US trio of Delta Air Lines, US Airlines, American Airlines have said leads unfair competition.

READ MORE ABOUT THE AIRLINES' DISAGREEMENTS HERE

The new research carried out by OAG, however, says the world airline industry is entering a period of rapid change and that China will replace the US as the largest aviation market.

In his report ‘The fight for Global Markets’, John Grant, executive vice-president at OAG, says Chinese carriers, like China Southern, China Eastern and Air China, will replace US airlines as the international air travel market leaders.

“While the target of the US concern has been Gulf carriers, it could equally have been Chinese carriers. Chinese carriers are closing in and within seven years China will have replaced the US as the world’s largest aviation market,” says Grant.

He said the Gulf-based airlines will continue their repaid growth, but not as fast as airlines in Turkey, Indonesia and China, where he says large domestic markets, as well as location and growing economies, will give them a distinct advantage.

“Whilst it is perhaps impossible to predict the future of the airline industry, the evidence suggests that China, Indonesia and Turkey might be the places where three globally dominant airlines are based in ten years’ time, benefitting as they do from large domestic markets, growing economies and advantageous geographic position,” he says.

Grant says the recent US vs Gulf subsidies spat is “the next stage of the battle for global air passenger markets”.

He says US airlines, having finally got their domestic airline capacity under control, are now looking to overseas for where future growth will come from.

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