Chinese Airline Beats Out Southwest To Become World’s Biggest Airline

Chinese Airline Beats Out Southwest To Become World’s Biggest Airline

Last month, Southwest Airlines became the biggest airline in the world, as measured by the number of available seats.  The airline took the ranking based on a substantial cut in demand for airlines around the world.  Now, a Chinese airline has taken the spot away from Southwest Airlines.  China Eastern Airlines is now the world’s biggest airline (for now).

The world’s seat capacity slid to 26.6 million seats a week, lower than the 30 million bottom experts were hoping for.  Southwest Airlines had over one million fewer available seats, which contributed to its loss at the top of the world market into the number two spot.

This doesn’t come as a huge shock, given that China has started reopening when the U.S. is only starting to reopen in limited areas.  Last week, Beijing’s loosening restrictions led to a surge in people booking airline tickets out fo the capital city.  China has added nearly 900,000 seats to its market as the country opens up.  Northeast Asia is currently the world’s largest regional market, with a 6% increase in seats in the past week.

In addition, as OAG reports, 82% of available seats are from domestic markets. That means airlines with substantial domestic markets are at an advantage over some of their competitors.  Domestic travel is significantly easier right now, given there are fewer restrictions than there are for international travel.  It is that same reason that Southwest Airlines had an advantage over other U.S. airlines, given its limited international destinations.

The chart below shows the domestic and international capacity for all markets.  As you can see, the slope of loss is much greater to international capacity than it is for domestic capacity.

While there was some hopeful signs in the data with increased seat capacity for some airlines, there were also substantial cuts from other airlines.  OAG reports, “Some 270 airlines added capacity back to the tune of approximately 3.9 million seats; unfortunately, 303 airlines reduced capacity by some 5.6 million.”

Bottom Line

What does this mean in the long term?  Well, nothing really to be completely honest.  But it provides an interesting metric in the short term for where airline demands are increasing and where they are decreasing.  As China begins to open up, it makes sense their large domestic carrier would take the top spot.  It’s unlikely to remain there for an extended period of time, but it’s still interesting data to peruse.