Shanghai Airlines Pt2: Crane Meets Swallow

Shanghai Airlines had been in competition against China Eastern, also based at Shanghai, since its birth. The 2000s would see growth at Shanghai but not in the same league as other Chinese airlines and finally a rapprochement and merger with its neighbour. Despite this however the crane of Shanghai Airlines is still resplendent on a fleet of over 75 aircraft.

For part 1 of the Shanghai Airlines story see:Shanghai Airlines Pt1: Pearl of the Orient

Shanghai Airlines spent the 1990s operating a fleet primarily made up of Boeing 757s and it wasn’t until April 1998 that it added its first 737NG a series 7Q8. Since then the 737-800 has gone on to form the backbone of the fleet with 52 examples in service by January 2015 alongside only 7 737-700s and 7 757s. In 2002 the airline was officially listed on the Shanghai Stock Exchange. In 2006 it formed a cargo subsidiary and in December 2007 joined the Star Alliance network.

Shanghai Airlines as with most Chinese carriers has been very conservative regarding its branding however in 2007 it did modify its paint scheme replacing the straight cheatline with a new wavy one. The first aircraft to wear the new scheme was B-5185 a new 737-800 in March 2007. Shanghai’s 73H fleet is a mixture of different marks mainly made up of 737-86Ds, 86Ns and 8Q8s – the latter leased from ILFC. This frame is one of only two 89Ps leased from SMBC Aviation Capital.

By 2008 the fleet numbered 53 aircraft, however both Shanghai Airlines and China Eastern were not profitable. Shanghai had an operating loss of USD11.2 million in the first half of 2008 following a USD64 million loss for 2007. This was dwarfed however by the red ink at China Eastern which managed an eye watering USD157.5 million loss in the first half of 2008. Still Shanghai Airline's full year 2008 loss of USD183 million was quite large enough! In February 2009 trading of Shanghai's stock was halted while the government injected cash and in July 2009 it was announced that the also freshly recapitalised China Eastern would takeover Shanghai in a share swap. Despite this though Shanghai Airlines would keep both its identity and independence. At the time Shanghai had a roughly 13% share of traffic at Shanghai compared to China Eastern's 34%.

The merger enabled consolidation of both airlines services and fleets. Shanghai received the first of its own A321 order in 2009, however the 4 aircraft were almost immediately transferred to China Eastern and the narrow body fleet fully standardised around 737s. The merger process was prolonged and it wasn't until January 25, 2010 that Shanghai Airline's shares were officially delisted from the stock exchange. Unsurprisingly it was announced in July 2010 that Shanghai Airlines would leave the Star Alliance and join China Eastern's Skyteam instead. It wasn't until October 2011 that Shanghai Airlines dream of operating the Boeing 787 came to an end however, when China Eastern replaced the oustanding orders with 737NGs.

In February 2012 Shanghai gained a pair of its parent’s A330-200s (B-6545/6546) and these were joined in October 2013 by a pair of ex-China Eastern series 300s (B-6096/6097). B-6097 had originally been delivered to China Eastern on September 26 2007 after first flying on August 16 as F-WWYL. In 2014 a fifth example (B-6127) was transferred from MU. The A330s are mainly used on trunk routes from Shanghai Hongqiao to Chengdu and Guangzhou. Shanghai Airlines has certainly not shown the aggressive growth of many of its peers and now operates in competition with two private airlines (Juneyao and Spring) also based at its Shanghai hub. However in partnership with China Eastern its future seems strong and as of early 2015 it operated 77 aircraft including 52 737-800s.