Chinese Aviation Gambits - The Port Moresby Two-Step
A Chinese-financed airline & airport initiative in Papua New Guinea would restructure Pacific aviation
The belt and road initiative is arguably the most important element of economic affairs in the world today. Chinese General Secretary Xi Jinping launched the programme in 2013 during a visit to Kazakhstan and since then it has agreed to help more than 140 countries build their infrastructure – everything from ports to skyscrapers and bridges to power stations.
The “belt” part of belt and road is land routes from China to the rest of Asia, Europe and the middle east, so-named from the “Silk Road Economic Belt”, as General Secretary Xi calls it. The “road” part of the name represents a “Maritime Silk Road” linking China by sea to south-east Asia, Africa and through the Suez Canal to Europe.
But so far belt and road has been relatively passive when it comes to air travel. Airports would be prime candidates for infrastructure development and China did invest in Velana International Airport, which serves Maldivian capital Malé. But that is it for now, as far as I am aware.
As planes start coming off the production line at Chinese aircraft manufacturer Comac, more airports and even airlines themselves could easily become part of the programme.
I believe that there are three prime opportunities for China to invest in new travel markets, supporting it’s overseas investments and becoming a new part of belt and road. These are:
1. The Port Moresby Two-Step (today) – building regular and reliable air links between mainland Asia and small island nations in the Pacific
2. The Somalia Shuffle – a chance to connect interior Chinese cities to Africa using low-cost single-aisles with just one stop in Mogadishu
3. The Taklamakan Tango – forging links with central Asia through the north-western city of Ürümchi.
Now read on…
The mighty Pacific ocean covers half the Earth’s surface. Look at a globe and you will see that even the distances associated with longhaul flights pale in comparison. Compared with crossing the Pacific London does not seem so far from Hong Kong and New York does not seem a long way from Sao Paolo.
The island nations of the three Pacific regions Micronesia, Polynesia and Melanesia are scattered across the face of the waters. The maps below show all* the international flights to and from Pacific island nations (the red dot in the middle centres the map at 0N, 180E).
* All that I could think of… apologies if some are missing.
They are operated by, on the left-hand map:
Air Niugini (IATA = PX, ICAO = ANG, Callsign = NIUGINI, hub = Port Moresby, POM)
Solomon Airlines (IATA = IE, ICAO = SOL, Callsign = SOLOMON, hub = Honiara, HIR)
Air Vanuatu (IATA = NF, ICAO = AVN, Callsign = AIR VAN, hub = Port Vila, VLI)
Aircalin (IATA = SB, ICAO = ACI, Callsign = AIRCALIN, hub = Noumea, NOU)
Air Tahiti (IATA = VT, ICAO = VTA, Callsign = AIR TAHITI, hub = Papeete, PPT)
Nauru Airlines (IATA = ON, ICAO = RON, Callsign = AIR NAURU, hub = Nauru, INU)
And on the right-hand map:
Fiji Airways (IATA = FJ, ICAO = FJI, Callsign = FIJI, hub = Nadi, NAN)
Air Tahiti Nui (IATA = TN, ICAO = THT, Callsign = TAHITI AIRLINES, hub = Papeete, PPT)
Air Niugini, Solomon Airlines, Air Vanuatu, Aircalin, Air Tahiti and Nauru Airlines exist to link their countries to the outside world and provide essential air services domestically.
Nauru Airlines only has one service from Nauru to Brisbane and Aircalin does not have any domestic services. The others have complex networks serving many hard-to-reach airports in their island countries. Here are their domestic route maps.
Air Niugini:
Solomon Airways:
Air Vanuatu:
Air Tahiti:
Air Tahiti’s network makes a little more sense if you divide it up into regions:
Countries like Vanuatu and the Solomon Islands are small economies, with respective populations of 652k and 308k, and GDPs of $1.5bn (£1.1bn) and $960m (£730m). These countries are simply too small to invest in wide-body aircraft that can reach mainland Asia. Single-aisles to Australia can be worthwhile investments if they attract Australian tourists to visit and spend money in local hotels and tourist attractions.
The arrival of a cruise ship is a significant event in Port Vila Vanuatu and locals set out their wares for tourists to buy on the boardwalk. How much the tourists do or do not spend hits the newspaper headlines the next day.
Fiji Airways and Air Tahiti Nui are a little different. Their economies are significantly larger at $5.2bn and $6.0bn GDP respectively (£4.0bn and £4.6bn). Powered by tourism, they can afford larger, longer-range aircraft and links to both Asia and North America. Fiji and Air Tahiti Nui are the hubs of the Pacific.
Meanwhile China is investing in the Pacific island nations through Belt and Road. In Vanuatu Chinese money paid for the new road between Port Vila and Bauerfield International Airport. And as you drive down that road on the way to Port Vila Chinese names are on the signs outside many businesses.
These countries are too small to afford links to Asia on their own. If China was able to provide high frequency, convenient services it would improve their links not just to China but to the rest of Asia and beyond to Europe, supporting economic growth and making ordinary people better off.
The problem though is that operating longhaul flights from China to the island countries will be extremely expensive. For now at least there is probably not enough demand to justify the services. Passengers travelling on Fiji Airways via Nadi travel 22% further than the great circle distance from Guangzhourto to reach Vanuatu and 24% further to reach Noumea (see table).
So if I were investing Chinese money in Pacific aviation I would build a connecting network at Port Moresby. One or two wide-bodies a day could connect in Papua New Guinea to daily single-aisle (much cheaper to operate) services to the other island nations. It would be the Emirates of Asia-Pacific, albeit on a smaller scale. That is my first Chinese aviation gambit. Tune in next time to hear about the Somalia Shuffle.
oliver AT ransonpricing DOT com, editor
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