Section 7 – Appendices
[Appendix1]
[Appendix 2]
[Appendix 3]
Network externality – An additional route will create external impacts on the existing operation network because of the efficient use of the hub-and-spoke26 networks.
[Appendix 4]
Product externality – Airlines can often enhance their efficiency by collecting and distributing an optimal mix of the complementary products, freight and passenger, via a hub.
[Appendix 5]
Hong Kong permits itself to serve major Asia-Pacific cities within five-hour flying time under its strategic location.
[Appendix 6]
[Appendix 7]
[Appendix 8]
Table : Airlines’ Hedging Positions
Airline
% Hedged
Period
Hedged Price (US$/bbl)
Singapore Airlines
33%
FY2007
Jet fuel at US-82
Cathy Pacific
40%
Until end-2006
N/A
Korean Air
30%
1Q-2006
N/A
EVA Air
50%
Until end-2006
N/A
Air Asia
100%
Until end-2007
WIT less US, min of US-48
Qantas
60%
Until end-2006
WIT at US
Source : Press release
[Appendix 9]
The Five Freedoms of the Air (identified by the Chicago Convention 1944)
First Freedom
:
The right to fly over another country without landing.
Second Freedom
:
The right to make a technical landing for refueling, etc., without picking up or letting off revenue traffic.
Third Freedom
:
The right to carry revenue traffic from the carrier’s base nation to treaty partner’s territory.
Fourth Freedom
:
The right to carry revenue traffic from treaty partner’s territory to carrier’s base nation.
Fifth Freedom
:
The right to carry revenue traffic between any points of landing on flights between three or more treaty partner nations.
The Supplementary Freedoms-Not Officially Recognized
Sixth Freedom
:
This is a combination of Third and Fourth Freedoms.
Revenue traffic flown between two treaty partner nations through carrier’s base nation.
Seventh Freedom
:
Revenue traffic flown between two nations by carrier of a third nation.
Eighth Freedom
:
Cabot age rights.
The right to carry revenue traffic between two points within a foreign nation.
Source : Dog anis, R. (2001), The Airline Business in the Twenty-first Century, London.Routledge
[Appendix 10]
Timeline of Recent Developments in the Aviation Sector
2001
2002
2003
2004
2005
“Regulation on Foreign Investment” issued to increase potential for investment in China’s Airports and Airlines.
Consolidation of 10 Airlines to 3 Super-Carriers; Air China (AC), China Southern Airlines (CSA) and China Eastern Airlines (CAE).
Foreign investors allowed investing in the construction and operation of Airports, including Airport Terminals and Runways, with equity interest up to 49%.
Singapore Airlines becomes 1st foreign airlines to win “Fifth Freedom Rights: to operate beyond China to a 3rd country.
Domestic Airlines allowed investing in Airports to a maximum of 25%.
The Airport construction fee, traditionally payable at the Airport, is incorporated into the ticket price.
The Government announces end to subsidies for Domestic Airports. And introduces new domestic investment regulations in a bid to stimulate private investment in Aviation industry, while retaining ownership of the air traffic control system.
[Appendix 11]
Existing Ownership in China’s Airports
Airport
Listed In
Ownership Details
Beijing Capital International Airport (CIA)
Hong Kong
CIA is under the direct management of The Civil Aviation Administration of China (CAPAC) and controls and has stakes in over 20 other Chinese Airports, Paris Airport Authority currently indirectly holds a 6.6% stake.
Shanghai International Airport
(operates Honhqiao & Pudding Airports)
Shanghai
Owned by the Shanghai Airport Authority, 39% in public shareholding.
Guangzhou Baryon
Shanghai
One of four Airports owned by the Guangdong Airports Management Corporation, 45% in public shareholding.
Shenzhen Baan
Shenzhen
Owned by Shenzhen Airport Group, 45.3% in public shareholding.
Hainan Milan
Hong Kong
Copenhagen Airports acquired 20% stake in November 2002.
Hangzhou Xiaoshan
-
Hong Kong Airport Authority agreed to acquire 35% stake in March 2005.
Xiamen Gaudi
Shanghai
Owned by Xiamen International Airport Group, 25% in public shareholding.
[Appendix 12]
Gross Domestic Product (China 1978-2004)
Data in this table are calculated at current prices.
Year
Gross National Income
Gross Domestic Product
Per Capita GDP
Percentage Change
Primary Industry
Secondary Industry
Tertiary Industry
(100 million Yuan)
1978
3,624.10
3,624.10
1,018.40
1,745.20
860.50
379.00
1979
4,038.20
4,038.20
1,258.90
1,913.50
865.80
417.00
10.03%
1980
4,517.80
4,517.80
1,359.40
2,192.00
966.40
460.00
10.31%
1981
4,860.30
4,862.40
1,545.60
2,255.50
1,061.30
489.00
6.30%
1982
5,301.80
5,294.70
1,761.60
2,383.00
1,150.10
525.00
7.36%
1983
5,957.40
5,934.50
1,960.80
2,646.20
1,327.50
580.00
10.48%
1984
7,206.70
7,171.00
2,295.50
3,105.70
1,769.80
692.00
19.31%
1985
8,989.10
8,964.40
2,541.60
3,866.60
2,556.20
853.00
23.27%
1986
10,201.40
10,202.20
2,763.90
4,492.70
2,945.60
956.00
12.08%
1987
11,954.50
11,962.50
3,204.30
5,251.60
3,506.60
1,104.00
15.48%
1988
14,922.30
14,928.30
3,831.00
6,587.20
4,510.10
1,355.00
22.74%
1989
16,917.80
16,909.20
4,228.00
7,278.00
5,403.20
1,512.00
11.59%
1990
18,598.40
18,547.90
5,017.00
7,717.40
5,813.50
1,634.00
8.07%
1991
21,662.50
21,617.80
5,288.60
9,102.20
7,227.00
1,879.00
14.99%
1992
26,651.90
26,638.10
5,800.00
11,699.50
9,138.60
2,287.00
21.71%
1993
34,560.50
34,634.40
6,882.10
16,428.50
11,323.80
2,939.00
28.51%
1994
46,670.00
46,759.40
9,457.20
22,372.20
14,930.00
3,923.00
33.48%
1995
57,494.90
58,478.10
11,993.00
28,537.90
17,947.20
4,854.00
23.73%
1996
66,850.50
67,884.60
13,844.20
33,612.90
20,427.50
5,576.00
14.87%
1997
73,142.70
74,462.60
14,211.20
37,222.70
23,028.70
6,054.00
8.57%
1998
76,967.20
78,345.20
14,552.40
38,619.30
25,173.50
6,308.00
4.20%
1999
80,579.36
82,067.46
14,471.96
40,557.81
27,037.69
6,551.00
3.85%
2000
88,254.00
89,468.10
14,628.20
44,935.30
29,904.60
7,085.74
8.16%
2001
95,727.85
97,314.80
15,411.80
48,750.00
33,153.00
7,651.44
7.98%
2002
103,935.33
105,172.34
16,117.30
52,980.19
36,074.75
8,214.02
7.35%
2003
116,741.22
117,390.17
16,928.10
61,274.12
39,187.95
9,111.00
10.92%
2004
136,584.28
136,875.87
20,768.07
72,387.19
43,720.61
10,561.00
15.91%
Average
13.89%
a) Since 1980, the difference between the Gross Domestic Product and the Gross National Income
(formerly, the Gross National Product) has been the net factor income from abroad.
Source: National Bureau of Statistics of China
[Appendix 13]
Proposed New Airport Projects in China
Airport
Province
Investment Amount (RM)
Status
Other Details
Haikou
Hubei
N/A
Construction underway
Kunming
Yunnan
16 Billion
Construction underway
23 million capacity by 2015, rising to 40 million by 2020.
Changbaishan
Jilin
309 Billion
Approved
Terminal Size: 8,000m2
Chaoshan
Gunagdong
2.3 Billion
Approved
Passenger Capacity 5 million
Dailian
Liaoning
15 Billion
Approved
Terminal Size: 200,000m2, Passenger Capacity 20 million
Jixi
Heilongjiang
150 Billion
Proposed
Terminal Size: 1,500m2, Passenger Capacity 110,000
Hefei
Anhui
2.5 Billion
Proposed
Passenger Capacity 9.5 million
Tonghua / Baicheng
Jilin
N/A
Proposed
Proposal to build network of 4 new airports in Jilin Province
Source: AV News (www.avbuyer.com.cn), Reuters and SinoCast Business News
[Appendix 14]
Development of Tourism (China 1999-2004)
Item
1999
2000
2001
2002
2003
2004
Total No. of travel Agencies
7,326
8,993
10,532
11,552
13,361
International Travel Agencies
1,256
1,268
1,310
1,349
1,364
Domestic Travel Agencies
6,070
7,725
9,222
10,203
11,997
No. of Staff & Workers of Travel Agencies
108,830
164,336
192,408
229,147
249,802
International Travel Agencies
47,153
68,093
72,801
89,128
100,742
Domestic Travel Agencies
61,677
96,243
119,607
140,019
149,060
Total No. of Tourist Hotel
7,035
10,481
7,358
8,880
9,751
Total No. of International Tourists
Arrival to China (10,000 person-times)
7,280
8,344
8,901
9,791
9,166
10,904
Percentage Change
14.63%
6.67%
9.99%
-6.38%
18.96%
Foreigners
843.23
1,016.04
1,122.64
1,343.95
1,140.29
1,693.25
Overseas Chinese
10.81
7.55
Compatriots from Hong Kong & Macau
6,167.06
7,009.93
7,434.45
8,080.82
7,752.73
8,842.05
Compatriots from Taiwan
258.46
310.86
344.20
366.06
273.19
368.53
Toursits (Overnight Visitors)
(10,000 person-times)
2,704.66
3,123.60
3,316.67
3,680.26
3,297.05
4,176.14
Total No. of Domestic Resident
Outbound (10,000 person-times)
923.24
1,047.26
1,213.44
1,660.23
2,022.19
2,885.00
For Private Purpose
426.61
563.09
694.67
1,007.39
1,481.09
2,298.00
Total No. of Domestic Tourists
(10,000 person-times)
71,900
74,400
78,400
87,800
87,000
110,200
Percentage Change
3.48%
5.38%
11.99%
-0.91%
26.67%
Tourism Earnings
International Tourism Earnings
(100 million USD)
140.99
162.24
177.92
203.85
174.06
257.39
Percentage Change
15.07%
9.66%
14.57%
-14.61%
47.87%
Domestic Tourism Earnings (10 million Yuan)
2,831.92
3,175.32
3,522.36
3,878.36
3,442.27
4,710.71
Percentage Change
12.13%
10.93%
10.11%
-11.24%
36.85%
a)Prior to 2000, the total no. of tourist hotels is the no. of hotels concerning foreign affairs.
Source: National Bureau of Statistics of China
Appendix 15]
List of Approved Destinations
1983
1988
1990
1992
1998
1999
2000
2002
2003
2004
2005
2006
Hong Kong
Thailand
Singapore
Philippines
Korea
Australia
Japan
Nepal
Germany
Greece
N. Mariana Islands
Mongolia
Macau
Malaysia
New Zealand
Vietnam
Indonesia
India
France
Fiji
Tonga
Cambodia
Malta
Maldives
Netherlands
Vanuatu
Grenada
Myanmar
Turkey
Sri Lanka
Belgium
United Kingdom
Bahamas
Brunei
Egypt
South Africa
Luxembourg
Chile
St. Lucia
Croatia
Portugal
Jamaica
Hungary
Spain
Russia
Pakistan
Italy
Brazil
Cuba
Austria
Mexico
Finland
Peru
Sweden
Antigua & Barbuda
Czech Republic
Barbados
Estonia
Laos
Latvia
Ukraine
Poland
Slovakia
Slovenia
Cyprus
Denmark
Iceland
Ireland
Norway
Romania
Switzerland
Liechtenstein
Ethiopia
Zimbabwe
Tanzania
Mauritania
Tunisia
Seychelles
Kenya
Zambia
Jordan
Source: CNTA
[Appendix 16]
Areas Opened for individual Visits to Hong Kong
Date
Areas Opened
Jul-03
Guangdong:
Donguan, Zhongshan, Jiangmen, Foshan
Aug-03
Guangdong:
Guangzhou, Shenzhen, Zhuhai, Huizhou
Sep-03
Beijing, Shanghai
Jan-04
Guangdong:
Shantou, Chaozhou, Meizhou, Zhaoqing, Qingyuan, Yunfu
May-04
Guangdong:
Zhanjiang, Shaoguan, Heyyuan, Maoming, Yangjiang, Jieyyang, Shanwai
Jul-04
Jiangsu:
Nanjing, Suzhou, Wuxi
Zhejiang:
Hangzhou, Ningbo, Taizhou
Fujian:
Fuzhou, Xiamen, Quanzhou
Mar-05
Tianjin Chongqing
Sep-05
Sichuan:
Chengdu
Shandong:
Jinan
Liaoning:
Shenyang, Dalian
Source: www.hkjn.com.hk
[Appendix 17]
*1.00 imperial ton is equal to 0.907 metric tonnes
[Appendix 18]
Section 8 – Bibliography
[1] AAstocks.com, 分析師 – 中國航空業今年併購活動料活躍, 26th July 2006 http://hk.tom.aastocks.com/eng/News/category.asp?catg=ALL
[2] British Airways (BA), Annual Report 2005
[3] Andrew Herdman – Director General of the Association of Asia Pacific Airlines (APA), Asia-Pacific aviation faces obstacles despite growth, The Standard, 7th March 2006
[4] Spacedaily.com, Asia Aviation to Defy Global Trend in 05
http;//www.spacedaily.com.news/aerospace-05a.html
[5] Dog anis, R. (2001), The Airline Business in the Twenty-first Century, London : Rutledge
[6] Schwieterman, J.P. (1993), Air Cargo and the Opening of China-New Opportunities for Hong Kong, Hong Kong : Chinese University Press.
Economies of scope are similar to economies of scale, but emphasize the number of products, such as the number of routes, that carriers offer, rather than the absolute size of their operations.
[7] British Airways (BA 2006), America urged to scrap ownership rules
http;//www.britishairways.com/travel/bares/public/neigh
[8] Guardian (2006), Security services and police to get UK air passenger details in advance
http://www.guardian.co.uk/airlines/story/0,,1693586,00.html
[9] Yahoo (2006), Airlines Industry Profile
http://biz.yahoo.com/ic/profile/770_1600.htm
[10] Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
[11] BBC News (2003), Union fears for call centre jobs
top://news.bbc.co.uk/1/hi/Scotland/2863257.stm
[12] Wit and Meyer (1998) Strategy – Process, Content, Context, Thomson Business Press
[13] Cathy Pacific Airways Limited (CX), Annual Report 2006
[14] Johnson and Scholes (1999), Exploring Corporate Strategy, Prentice Hall
[15] Bloomberg, Air Canada Seeks Investors as Li Signals Withdrawal, 2nd April 2004
[16] Power T, and Jerkin, G (1999), Battle of the Portals, Academy
[17] Virgin Atlantic (2006) http://www.virgin-atlantic.com/en/gab/index.jsp;jsessionid=DWphYK2kXHL6rbpvGhqFSvSc20vpZVLXctn5MTzy4ZGlBSq9pLzY!-1083164120,
[18] Airsider.Com, Cathy Pacific’s “Silver Bullet”, 19th May 2006
http://www.airsider.ch/files/2006/0506/014/cxsilverbullet.htm
[19] Cathy Pacific Airways Limited (CX) website
http://www.cathaypacific.com/cap/inch/what onboard
[20] Guardian (2005, a), Ministers try to broker BA strike peace, 23rd August 2005
[21] China Statistical Yearbook 2005
[22] Global Market Forecast 2004-2023, Airbus Press Centre
[23] Xingu Financial Network News, 1st March 2006
[24] World Tourism Organization; International Tourist Arrivals by Country of Destination;
www.world-tourism.org
[25] “China plans airport expansion”, Wall Street Journal, 1st March 2006
[26] Ovum, T.B. and Trachea, M. (1991), Airline Deregulation in Canada, New York:
New York University Press.
[1] AAstocks.com,分析師 中國航空業今年併購活動料活躍, 26th July 2006
[2] British Airways (BA), Annual Report 2005
[3] Andrew Herdsman – Director General of the Association of Asia Pacific Airlines (APA), Asia-Pacific aviation faces obstacles despite growth, The Standard, 7th March 2006
[4] Spacedaily.com, Asia Aviation to Defy Global Trend in 05
3 Andrew Herdsman – Director General of the Association of Asia Pacific Airlines (APA), Asia-Pacific aviation faces obstacles despite growth, The Standard, 7th March 2006
[5] Dog anis, R. (2001), The Airline Business in the Twenty-first Century, London.Routledge
[6] Schwieterman, J.P. (1993), Air Cargo and the Opening of China-New Opportunities for Hong Kong, Hong
Kong: Chinese University Press.
[7] British Airways (BA 2006), America urged to scrap ownership rules
[8] Guardian (2006) – Security services and police to get UK air passenger details in advance
[9] Yahoo (2006) – Airlines Industry Profile
9 Yahoo (2006) – Airlines Industry Profile
[10] Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
[11] BBC News (2003), Union fears for call centre jobs
[12] Wit and Meyer (1998), Strategy – Process, Content, Context, Thomson Business Press
10 Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
[13] Cathy Pacific Airways Limited (CX), Annual Report 2006
10 Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
[14] Johnson and Scholes (1999), Exploring Corporate Strategy, Prentice Hall
2 British Airways (BA), Annual report 2005
9 Yahoo (2006) – Airlines Industry Profile
[15] Bloomberg, Air Canada Seeks Investors as Li Signals Withdrawal, 2nd April 2004
[16] Power T, and Jerkin, G (1999) Battle of the Portals, Academy
14 Johnson and Scholes (1999), Exploring Corporate Strategy, Prentice Hall
2 British Airways (BA), annual report 2005
17 Virgin Atlantic (2006)
10 Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
13 Cathy Pacific Airways Limited (CX), Annual Report 2006
18 Airsider.Com, Cathy Pacific’s “Silver Bullet”, 19th May 2006
14 Johnson and Scholes (1999), Exploring Corporate Strategy, Prentice Hall
2 British Airways (BA), Annual Report 2005
10 Hill (2005), International Business: Competing in the Global Marketplace, 5/e, McGraw Hill
19 Cathy Pacific Airways Limited (CX) website
20 Guardian (2005, a), Ministers try to broker BA strike peace, 23rd August 2005
3 Andrew Herdsman – Director General of the Association of Asia Pacific Airlines (APA), Asia-Pacific aviation faces obstacles despite growth, The Standard, 7th March 2006
21 China Statistical Yearbook 2005
22 Global Market Forecast 2004-2023, Airbus Press Centre
23 Xingu Financial Network News, 1st March 2006
24 World Tourism Organization; International Tourist Arrivals by Country of Destination; www.world-tourism.org
25 “China plans airport expansion”, Wall Street Journal, 1st March 2006
26 Ovum, T.B. and Trachea, M. (1991), Airline Deregulation in Canada, New York: New York University Press.
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