uploads///Part_CEA_Revenue break down

A snapshot of China Eastern Airlines’ revenue composition

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Dec. 22 2014, Updated 3:39 p.m. ET

Revenue breakdown

China Eastern Airlines provides passenger and cargo transportation services in domestic as well as international markets. Around 68% of its revenue is generated from the domestic market, 28% from international markets, and 4% from regional markets, including Hong Kong, Macau, and Taiwan. In the regional markets, China Eastern (CEA) operated 24 flight routes between China and Hong Kong, 25 routes between China and Taiwan, and three routes between China and Macau in FY13.

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Market share in core markets

China Eastern has a seat share of 22% in the domestic market and is among the top three state-owned airlines in China. The other two principal competitors in the domestic market include China Southern (ZNH) and Air China (AIRYY), with a seat share of 27% and 25%, respectively. China Southern is based in Guandzhou, Air China is based in Beijing, and China Eastern has its main hub in Shanghai and regional hubs in Xián and Kunming.

China Eastern controls a significant share in all three hubs. It accounts for 49% and 38% of the flight departures and arrivals in the Shanghai Hongqiao International Airport and Shanghai Pudong International airport, and 31% and 44% in Xián Airport and Kunming Airport, respectively.

Competition in international markets

In the international market, China Eastern competes with several major airlines, including Delta Air Lines (DAL), United Continental Holdings (UAL), American Airlines (AAL), Lufthansa, and British Airways.

The Guggenheim China Small Cap ETF (HAO) invests in shares of China Eastern Airlines, China Southern, and Air China. Top ETFs holding shares of US airlines include the iShares Transportation Average ETF (IYT) and the SPDR S&P Transportation ETF (XTN).

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