Carriers set to change teams?

Carriers set to change teams?
Dec 1, 2017 (WiC 390)

Star Alliance, the oldest of the global airline alliances, has been around for 20 years. It launched in an era when low-cost giant Ryanair lacked a website and Middle Eastern carriers like Etihad didn’t exist.

And the aviation alliance landscape seems set for more change last month after reports in the Hong Kong press that China Southern, one of China’s largest airlines, could leave Star’s competitor SkyTeam to join rival grouping Oneworld.

The background to the reshuffle is the opening of Beijing’s second international airport in 2019, which is set to shake up the sector. China Southern wants to challenge Air China’s dominance in northern China and it plans to operate a huge fleet out of the new hub, flying some of its new routes in conjunction with American Airlines, a member of Oneworld.

American bought a stake in China Southern for $200 million earlier this year and 

Oneworld has an obvious weakness in lacking an airline from mainland China, although it does include Hong Kong’s Cathay Pacific in its ranks. Of course, Cathay might not be keen on the arrival of a new partner with a home base in Guangzhou, barely 100km from its own hub. Yet there is speculation that Cathay could soon switch to Star, which would put it in the same club as Air China, its second-biggest shareholder and a potential bidder for full control of Cathay in the future.

 For now though Cathay is denying the rumour, saying it is “committed” to Oneworld and “proud” to be a founding member, which “has served the airline very well”.

 (For more on Cathay’s strategic dilemmas see WiC377.)

Flying off the shelves

Flying off the shelves
Nov 24, 2017 (WiC 389)

A month ago we reported that a couple of unlikely items – two cargo jets – were for sale on Taobao, China’s leading e-commerce site. And this week there was news that the two aircraft have been purchased. On Tuesday there was an online auction for two Boeing 747-400 Freighters that were being sold by a Shenzhen court, after a bankruptcy case. It had been trying to find buyers for the planes since 2015, and turned to Taobao as something of a last resort. Jack Ma’s platform didn’t let it down, with the aircraft sold for Rmb322.8 million ($49 million) in what has been billed by the South China Morning Post as the first online auction for jets in China.

Bidders were required to show their seriousness by depositing Rmb6.1 million with Taobao and the eventual winner was courier giant SF Express, which is building out a fleet of its own delivery planes (its boss Wang Wei said earlier this year he will spend Rmb2.7 billion on aircraft). The planes, currently painted green and white and carrying the logo of former flyer Jade Cargo, are currently in Shanghai. One other aircraft – parked in Shenzhen’s Bao’an Airport – went unsold, with its minimum starting bid of Rmb122.6 million unmet.

Nikon shutters China factory

Nikon shutters China factory
Nov 17, 2017 (WiC 388)

Peek into most restaurants in China and you will see people taking photos of food. In the days before the smartphone, the habit was restricted to food critics. But with the high-quality cameras installed in today’s handsets it is easy to snap show-off photos of food and post them online to be ogled at by absent friends and relatives.

The method of taking the photos speaks volumes too about the pending extinction of the standalone digital camera. And another milestone in this decline was reached last week when Nikon announced that it will close its digital camera factory in China.

The company blamed the rise of smartphones and the resulting shrinkage in camera sales. The factory – which has been operating in China for 15 years – made 1.75 million cameras in 2016 but sales numbers have dropped 68% since 2012.

More than 2,000 Chinese employees will now be laid off and the factory and its land will be sold, reports China Business.

With its core camera business being ravaged by the likes of iPhones, Samsung Galaxies and Huawei smartphones (which even use Leica lenses), Nikon is now looking to grow in areas such as virtual reality cameras and healthcare technology. The closure of its longstanding China facility shows the Japanese firm is making some hard choices as it tries to reinvent itself.