Singapore Airlines is the most well connected airline in mainland China, despite Cathay’s newest additions

The Cathay Pacific Group is growing its mainland China network with two additional cities – Nanning and Jinan – but its footprint is still over-shadowed by Singapore Airlines.


Summary

  • Cathay Pacific Group is growing its mainland China network with two additional cities – Nanning and Jinan;
  • SIA Group leads with 26 mainland China destinations, followed by Cathay Pacific with 23;
  • SIA Group’s footprint in mainland China has grown exclusively due to low-cost airlines, and in particular Scoot.

Cathay Dragon adds China’s Nanning and Jinan

The group’s regional arm, Cathay Dragon, launched Nanning in Jan-2018 and will open Jinan in Mar-2018. This grows the group’s destinations in mainland China to 23 but this still falls short of the Singapore Airlines Group. Despite the SIA Group being further from mainland China, it serves more destinations: 26.

The SIA Group’s 26 destinations include two cities in the Pearl River Delta, of which Hong Kong is one part of. The two PRD destinations are Guangzhou and Shenzhen. Cathay does not fly to Shenzhen but does serve Guangzhou. A note too on Cathay’s China footprint: the figure of 23 destinations includes both Shanghai Hongqiao and Shanghai Pudong airports.

SIA overtook Cathay in 2014 for mainland China destinations

Until 2014, Cathay served far more destinations in mainland China than SIA. Until Cathay’s launch of Nannin and Jinan, its destination footprint has been flat in China since 2013.

Cathay Pacific and Singapore Airlines Groups mainland China destinations: 2006-2018

Source: CAPA – Centre for Aviation and OAG 
Note: Cathay Pacific includes Dragonair/Cathay Dragon. Singapore Airline Group includes Singapore Airlines, Silk Air, Tigerair and Scoot.

SIA’s China growth is exclusively because of low-cost airlines

The SIA Group’s footprint in mainland China was stagnating with 11 destinations served from 2008-2011 (this was a decrease from the 13 destinations served in 2006). The group began to grow in 2012 and made significant additions from 2013-2016.

The growth was exclusively due to low-cost airlines, and in particular the SIA Group’s launch of Scoot. Scoot’s widebody fleet gave the group the ability to serve destinations too far for Tigerair’s narrowbody fleet.

The number of mainland China destinations served by the SIA Group is nine, one more than the typically eight cities served from 2007-2013. But this is a slight decrease from the 10 cities served in 2006, 2015 and 2016.

What is unmistakable is the growth in number of mainland China destinations served exclusively by the SIA’s Group LCC platform. SIA’s LCCs served only one mainland China destination in 2011 and in 2018 serve 15. The group has consistently seen about two destinations (Guangzhou and Shenzhen) served by both low-cost and full-service platforms.

Singapore Airlines Group mainland China destination by airline service: 2006-2018

Source: CAPA – Centre for Aviation and OAG 
Note: Cathay Pacific includes Dragonair/Cathay Dragon. Singapore Airline Group includes Singapore Airlines, Silk Air, Tigerair and Scoot.

Is Cathay missing out by not having a LCC?

Cathay Pacific is one of the few full-service Asian airlines without a LCC subsidiary. Looking at SIA in China, it may be tempting to suggest Cathay could grow in its own backyard if only it had a different way of doing so – such as a LCC.

Yet Cathay would not spend a second to think about trading its China network for SIA’s: while SIA may lead on destinations, Cathay has far greater depth with hyper-frequency, especially to Beijing and Shanghai.

So why the difference? For a matter of fact, mainland Chinese airlines were slower to grow in Singapore than Hong Kong. Hong Kong was closer, more comfortable and an easier sell. That made it harder for Cathay to reach thinner markets, while the SIA Group was able to move early on smaller Chinese cities.

Cathay may argue route-by-route financials are unclear: serving a city is no indication of long-term stability.

More Cathay growth in China with A321neo

Cathay Dragon is likely to grow its China network in coming years as it starts to receive units from its order of A321neo aircraft. Besides replacing existing narrowbody aircraft and also some widebodies, there is significant net growth planned, as CAPA previously surveyed.

See related report: Cathay Pacific to order 32 A321neo aircraft in strong commitment for regional Asia growth