In recent years, Kunming Changshui Intl. Airport (IATA: KMG) has seen sustainable growth of passenger throughput. Additionally, it has been eyeing expansion to international destinations in South and Southeast Asia. In order to find out KMG's competitiveness in South and Southeast Asia, the CADAS team has done an analysis based on data provided by VariFlight.

At present, airports located in Yunnan's neighboring regions have vast development potential. However, these opportunities standing before all of Kunming Airport's competitors present the hub with considerable challenges. This report presents the analysis of Kunming Airport's competitive advantages and shortages comparing its passenger throughput, transport capacity, and carriers' operations to other major civil aviation hubs of South and Southeastern Asia: Guangzhou Baiyun Intl. Airport (China, IATA: CAN), Indira Gandhi Intl. Airport (Delhi, India, DEL), Changi Airport (Singapore, SIN), Suvarnabhumi Airport (Bangkok, Thailand, BKK), Tan Son Nhat Intl. Airport (Ho Chi Minh City, Vietnam, SGN), Kuala Lumpur Inlt. Airport (Malaysia, KUL).

1.Passenger Throughput

Passenger throughput recorded in 2017 put Kunming Airport on the 6th position among the airports included in the report. There is a notable difference of 23.56% between passenger throughput of the hubs that took 5th and 6th positions. So far in 2018, this difference has been slightly less: 21.48%.

In the first half of 2018, Indira Gandhi Airport demonstrated the highest passenger throughput among 7 airports overcoming Guangzhou Baiyun Airport.

The largest proportions of local passengers among all 7 hubs traveled through Kunming Airport, Guangzhou Baiyun Airport and Indira Gandhi Airport in 2017. In particular, only 9.3% (4.15 million) of international passengers traveled through Kunming Airport last year against Guangzhou Baiyun's 24% and Indira Gandhi's 26.7%.

Passenger throughput dynamics of these 7 airports has also seen notable changes in recent years.

Guangzhou Baiyun Airport saw the highest passenger throughput growth in 2014-2017. Indira Gandhi Airport demonstrated the steepest PT slope at the same period of time with 72.84% growth of passenger numbers in 4 years.

Looking at the average annual passenger throughput growth rates provides different results. While dropping in 2017 due to capacity trend changes, Tan Son Nhat Airport's average passenger throughput growth during 2014-2017 was 16.88% which is the highest growth rate among all 7 airports. The same trend can be observed with Indira Gandhi Airport and Kunming Airport that were ranked 2nd and 3rd with 14.75% and 10.85% growth rates respectively. The lowest average annual growth rate (3.8%) was recorded in Singapore Changi Airport, the slope almost faced stagnation in 2016 and 2017.

2.Transport Capacity and Route Network

1 South and Southeast Asian markets

South and Southeast Asia are undeniably the most important markets for the airports included in this report. In the 1st half of 2018, Kunming Airport saw the largest share of international passengers traveling in the region: 80.45% (of all international passengers served by the airport during that time period), higher than past year. International passenger proportion on South and Southeast Asian flights was the lowest in Indira Gandhi Airport: 34.26%.

For all the airports included in the report, the following countries of the region served as the most important destinations in the 1st half of 2018: Singapore, Thailand and Malaysia, Indonesia, India, Philippines, Vietnam, etc.

Changi and Kuala Lumpur airports demonstrated their competitive strength with remarkable transport capacity outputs in Singapore, Indonesia, Thailand and Malaysia.

In addition, Thailand and Malaysia have been serving as major markets for Guangzhou Baiyun and Kunming airports. Transport capacity numbers of both hubs can largely be accounted for their operations in these countries. However, Guangzhou Baiyun Airport's transport capacity is still 50% larger than Kunming's TC. Kunming Airport's transport capacity exceeds Guangzhou Baiyun Airport in other markets that lack much space and chances for newcomers: Myanmar, Laos and Brunei.

Guangzhou Baiyun Airport and Kunming Airport demonstrated the fastest average annual transport capacity growth in 2014-2017 among all airports included in the report: 21.16% and 24.86% respectively. While these numbers exceed average transport capacity growth rate of Chinese airports, they are still lower than the average growth rate in the markets of South and Southeastern Asia.

2 Long Distance Flights. Europe and North America

South and Southeast Asia play a crucial role in these 7 airports' development. Although these hubs do not operate many links to the European and North American regions, long-haul flights are still crucial to them sustaining their international networks.

Among all 7 airports, only Singapore Changi, Indira Gandhi and Guangzhou Baiyun have direct flights to North American destinations with Guangzhou Airport demonstrating the highest transportation capacity on flights linking it with West. Kunming Airport that concentrates most of its operations in Asia, has the lowest transport capacity on long-haul routes, just 2% of Changi Airport's TC.

3.Airlines Operations and Transport Capacity

In order to evaluate these 7 airports more properly, air carriers operating at the hubs were also analyzed.

All 3 airlines with the highest transport capacity in Guangzhou Baiyun Airport are full-service carriers while a major share of airlines operating at Changi are low-cost. 2nd and 3rd airline at Tan Son Nhat Airport by transport capacity (which accounts to 39.41% of the airport's TC) are budget carriers as well. IndiGo, the airline with the highest transport capacity at Indira Gandhi Airport, is also a low-cost carrier.

In total, 7 airlines are based at Kunming Airport including China Eastern with the largest transport capacity share (36.93%), Lucky Air (12.75%), China Southern Airlines (8.93%), Sichuan Airlines, Kunming Airlines, Ruili Airlines, Hongtu Airlines.

Apart from transporting 1/3 of the airport's passengers, China Eastern also conducted almost a half of the hub's international operations - 44.57% which is 11.4% of all the airport's flights. However, compared to the share China Southern had in Guangzhou Baiyun, this number is not that large with the latter airline conducting 27.4% of Guangzhou Airport's operations.

In addition, China Eastern's flights frequency in Kunming Airport was 11% while the frequency of China Southern in Guangzhou Baiyun Airport was 25.1%

4.Conclusion

Currently, Kunming Airport faces considerable competitive forces in South and Southeast Asia. On one hand, Singapore Changi, Bangkok Suvarnabhumi and Kuala Lumpur airports operate regional route networks with comprehensive coverage. On the other hand, neighboring countries such as India and Vietnam have airports capable of accommodating more international carriers. For example, American Airlines announced plans to launch direct US - Myanmar flights. Additionally, Vietnam Airlines is considering to link Vietnam and US thus increasing its presence on the regional and international arena.

Aside from that, other airports in China are striving to expand their operations. For instance, Guangzhou Baiyun Airport can be considered Kunming Airport's strongest domestic competitor. It has been operating both within and outside China for a longer time, and the hub's overall transport capacity is 2 times higher than Kunming's.

China Eastern Airlines possesses the largest share of operations in Kunming Airport as it is based in the hub, and has the most influence on its operations and development among other carriers. At the same time, the airline's transport capacity output is limited and not as high as of the other carriers.

All in all, considering that the hub still has weaknesses that might not let it develop with the desirable pace, more research has to be conducted on the target market, as well as the airport's capabilities and opportunities.

Contributed by VariFlight