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Analysis: China Eastern Grows in the US

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Analysis: China Eastern Grows in the US

Analysis: China Eastern Grows in the US
February 03
07:00 2014

MIAMI — China Eastern Airlines loaded a summer expansion of its US operations this weekend from its largest hub at Shanghai-Pudong International Airport, increasing its services to Los Angeles to double daily and New York JFK to ten times weekly (each from current daily flights) beginning June 25th, 2014.

The Shanghai – Los Angeles route will increase from daily to ten weekly flights on May 30th, increase to double daily on the 25th, and come back down to eleven weekly flights on August 18th. The route is currently served by a 322 seat Airbus A340-600 aircraft in a three class configuration (8F / 42J / 272Y). However, China Eastern is in the process of retiring its fleet of these aging quad-jets.

China Eastern once operated a subfleet of ten A340-600s, but has already retired five. The remaining aircraft are plying the longest routes in its network (such as the 7,392 mile journey between Shanghai Pudong and New York JFK) and will be retired in favor of the Boeing 777-300ER, of which China Eastern has 20 on order.

The Los Angeles flights will now be served with 264-seat Airbus A330-200 aircraft (24J / 240Y), which represents a capacity increase of 64.0%. Competition on the Los Angeles – Shanghai sector is extremely fierce, with China Eastern, American, and United all offering at least daily service on the route. However, China Eastern will have an advantage on the route thanks to the connectivity it offers at Pudong, its largest hub, with more than 210 peak day departures to 112 destinations.

Still, that’s a lot of capacity chasing passengers on a route where the per day each way (PDEW) demand in 2011 was just 408 passengers per day. Regardless, the schedules for China Eastern’s new flights are as follow:

MU583 –> PVG – LAX –> D: 1300 A: 1005 –> A330-200 –> Daily
MU585 –> PVG – LAX –> D: 2000 A: 1700 –> A330-200 –> Daily

MU584 –> LAX – PVG –> D: 0100 A: 0610+1 –> A330-200 –> Daily
MU586 –> LAX – PVG –> D: 1230 A: 1730+1 –> A330-200 –> Daily

Meanwhile, the increase to New York JFK will consist of three additional weekly flights between June 25th and August 18th. Despite much less competition (a daily United Boeing 777-200ER from Newark), the market is of a similar size as Los Angeles at 365 passengers PDEW with high yields thanks to the business ties between two of the most important financial centers in the world. Flight schedules for the carrier’s planned New York JFK operations are as follows:

MU587 –> PVG – JFK  –> D: 1130 A: 1425 –> A340-600 –> Daily
MU593 –> PVG – JFK  –> D: 1920 A: 2215 –> A340-600 –> WFSu

MU594 –> JFK – PVG  –> D: 0145 A: 0505+1 –> A340-600 –> MThSa
MU588 –> JFK – PVG  –> D: 1625 A: 1915+1 –> A340-600 –> Daily

In addition to New York JFK and Los Angeles, SkyTeam member China Eastern also serves San Francisco and Honolulu in the US (and historically served Anchorage and Chicago O’Hare as well).

With China Eastern’s growth, the pace of trans-Pacific expansion from Asian carriers (such as Eva Air) continues to accelerate, putting pressure on revenues for American carriers in the Pacific as seen in the fourth quarter and full year 2013 financial results reported over the past two weeks. Still, China Eastern has the benefit of strength in the home market of Shanghai, which should allow its network to ingest these additions with relative ease.

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About Author

Vinay Bhaskara

Vinay Bhaskara

Senior Business Analyst, Big Airline Enthusiast, Avid Airport Connoisseur, Frequent Flyer, Globetrotter. I Miss Northwest Airlines Every Day. vinay@airwaysmag.com @TheABVinay

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