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Beijing Daxing International Airport - Growth Prospects

Beijing Daxing International Airport – pictured in December 2018 while under construction.(Photo from Chinatopix/AP)

On the 25th of September of 2019, Beijing’s second international airport at Daxing was opened, just ahead of the 70th anniversary of the People's Republic of China on the 1st of October.

Beijing Daxing International Airport is located 46 kilometres (29 miles) south of Tiananmen Square - its 700,000 sqm starfish-shaped terminal was designed by the late Iraqi-British architect Zaha Hadid - and is expected to operate at full capacity in 2040, with eight runways and the potential to receive 100 million passengers annually.

The entire airport project was completed in less than five years and development costs were about CNY 450 bil (US$63 bil) in total. It is expected to give a boost to infrastructure growth, flagging amid the biggest economic slowdown in decades.

With Beijing Daxing International Airport in operation, the region now has four major civil airports-Beijing Capital International Airport and Beijing Daxing International Airport in the capital city, one in Tianjin and one in Shijiazhuang, capital of Hebei province.

This article here briefly describes the drivers for the growth of passenger traffic at Daxing International Airport over the next decade or two.

The Xiongan New Area

A key reason for the selection of the Daxing region as the location of the second international airport was to allow for a key air transport link to the Xiongan New Area, which has been earmarked as a hub for Beijing’s non-capital functions and designated as one of China’s new innovation-driven economic engines.

An aerial view of Xiong'an New Area on October 26, 2017. (Photo from People's Daily Online)

Seen as China's "city of the future," Xiongan has been designed to become a zone for innovation, a digital city synchronized with a brick-and-mortar one, and a livable and business-friendly area. Xiongan would effectively perform Beijing’s non-capital functions and would become a significant growth engine for the world-class "Jing-jin-ji" mega-city cluster (with a combined population of over 100 million) and which would coordinate the development of Beijing, Tianjin as well as Hebei province, not unlike other similar regional mega-city cluster developments in China like the Pearl River Delta Greater Bay Area and Yangtze River Delta.

The new airport sits at the junction of Beijing, Tianjin and Hebei, and is the closest to Xiongan New District (about 74 km away) among the four airports. Connections to Beijing Daxing International Airport include the Beijing–Xiong’an Intercity Railway, which meets the high-speed rail routes that run through West Beijing station.

Visual Representation of key locations from Daxing Airport. (Graphic is from CGTN)

Beijing Daxing International Airport is therefore a crucial link to the growth of Xiongan New Area and the Jing-jin-ji mega-city cluster.

Dual-Hub Ambitions

The allocation of majority of landing slots to two major domestic network carrier groups will also boost Beijing Daxing International’s upcoming role as an alternative hub airport for Beijing.

At Beijing Daxing International Airport, China Southern Airlines Group will have 40% of total landing slots while China Eastern Airlines Group will have 30% of total landing slots. Air China Group would have 10% of landing slots, but this allocation essentially means that China Southern Airlines and China Eastern Airlines will be the dominant carriers at Beijing Daxing International Airport and bring along with them their international partner airlines (China Southern with American Airlines and China Eastern with its SkyTeam Partners).

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China Southern Airlines (Photo from Wikimedia Commons)

China Eastern is due to become the only Chinese airline with dual home hubs in Beijing and Shanghai, granting a remarkable advantage and augmenting its growth potential from the synergies generated with its dual home hub status.

According to Hu Haiqing, deputy general manager of China Southern Airlines’ operation control centre in an interview with Global Times, with most of its bases in the south of the country, China Southern Airlines's flights to Beijing Daxing International Airport will be 10 to 15 minutes shorter than to Beijing Capital International Airport. A further 15 to 20 minutes taxiing time will also be saved, thanks to its position in the new airport.

Beijing Daxing International Airport’s design also makes transit much quicker, with transfers between international and domestic flights up to 90 minutes shorter than from Beijing Capital International Airport.

In addition, Beijing Daxing International Airport’s terminal has been designed to allow for short walking times – it takes 8 minutes to walk from the centre of security check to the furthest end-gate in each wing. This is in contrast to the older terminal facilities at Beijing Capital International Airport, where connecting passengers often require the use of the airport people-mover system.

China’s leading technology company, Huawei, is also having its latest 5G technology installed in Beijing Daxing International Airport. This will allow travellers with China Eastern Airlines to purchase tickets, check in bags, complete security checks and board the aircraft through facial recognition technology, making connecting at Beijing Daxing International Airport more convenient than at Beijing Capital International Airport.

The mobile infrastructure at the Beijing Daxing International Airport supports 5G technology.(Photo from Reuters)

Easing of “one route, one airline” policy

The opening of Beijing Daxing International Airport also comes after the easing of China’s “one route, one airline” policy in Oct 2018. This policy has been used on long-haul international route allocation since 2009. The new rules allow a second airline to serve some route pairs in a move in recognition of the changing nature of China’s aviation market (“double designation”).

The criteria for “double designation” was revealed by Midas Aviation on its website:

  1. If the frequency share of Chinese airlines on the route is less than 70% and the combined weekly frequency for both Chinese and foreign airlines is above fourteen flights a week then double designation is possible.
  2. Double designation can be awarded where a Chinese airline has been the only operator for the last six years.

Under the most ideal circumstances, the new rules benefit China Eastern and China Southern which would have an opportunity to compete with other foreign carriers on lucrative long-haul routes originating from Beijing Daxing International Airport to popular destinations in Europe like London and Paris.

Overcapacity at Beijing Capital International Airport

Beijing Capital International Airport’s annual passenger throughput – it handled over 100 million passengers in 2018 – now exceeds its design capacity of 82 million passengers per year. Passenger traffic at Beijing Capital International Airport is expected to continue growing annually and there has not yet been any official announcement about the building of Terminal 4 to further increase terminal capacity.

Therefore, the development of Beijing Daxing International Airport to absorb some of Beijing Capital International Airport’s passenger traffic has been a right decision.

It should also be acknowledged that due to its closeness to some key areas in Beijing city (as well as the Star Alliance airline network remaining at Beijing Capital International Airport), Beijing Capital International Airport will still continue to play an important hub role for the city.

Beijing Skyline from Northeast 4th Ring Road (Photo from Wikimedia Commons)

Conclusion

 

From a long-term perspective and taking into context China’s plans to grow its economy through the synergies created by innovative mega-city clusters, Beijing Daxing International Airport has a very important role in catering to the increased demand for air transport from its surrounding region. The scenario for a dual-hub airport system for Beijing has also been set with by opening up to market to other domestic players apart from Air China as well as the loosening of the “one route, one airline” policy.

Sources:

Airport Technology - Beijing Daxing International Airport

"BCIA to be faced with ‘new development situation’ after Daxing airport opening", TRBusiness, 1 Aug 2019

"A big new airport shows China’s strengths (and weaknesses)", The New York Times, 25 Nov 2018

"China’s airlines jostle for position at new mega airport, in rare glimpse into Beijing’s palace intrigue", South China Morning Post, 3 May 2019

"大兴机场正式投运,首都机场要过两年苦日子了?", 新浪财经-自媒体综合, 15 October 2019

"对话大兴机场副总经理:机场中转效率国际领先”, 新京报, 25 Sept 2019

"Huawei Fusion Solar Powers Select Areas of Beijing Daxing International Airport", Huawei (via PR Newswire), 9 Oct 2019

"Huawei 5G Technology Supports Beijing’s Newest Smart Airport", MyWallSt, 26 Sept 2019

"解读北京大兴机场临空经济区建设", airportse.cn, 17 Sept 2019

"The hi-tech features at Beijing's new Daxing International Airport", South China Morning Post, 26 Sept 2019

Boyd Group International China Airport Forecast

"Why Beijing's New Daxing International Airport is a big deal", China Aerospace Blog, 3 August 2019

"Mega-flight hub bolsters cluster plan", China Daily, 26 Sept 2019

""Jing-jin-ji": China's regional city cluster takes shape", Xinhua News, 26 Feb 2019

"China Southern Launching Airline to Serve State-planned City", AIN Online, 5 Oct 2018

"Beijing's Second Airport Will Most Likely Divert Traffic Away From BCIA, FVE Lowered to HKD 7.90", Morningstar Research, 3 Sept 2018

"In Depth: Beijing’s New Airport Offers Leveler Playing Field for Air China’s Rivals", Caixin Global, 5 June 2019

"The Battle for International Routes at Beijing's New Daxing Airport", 23 March 2019

"China's carriers allowed to compete on some international routes", China Daily, 4 May 2019

"Beijing Daxing opening resets competition between “Big Three” carriers", Orient Aviation, 1 Sept 2019

"The Beijing-Tianjin-Hebei Integration Plan", China Briefing, 26 April 2018

"Foreign airlines to face new rivals on popular China routes as restrictions ease", Reuters, 26 Sept 2018

"China’s New Route Policy - Time to Double Up", Midas Aviation, 7 Nov 2018

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