Up­front

Mr. Shaoy­ong Liu, pres­i­dent of China Eastern Air Hold­ing Com­pany, talks about the fu­ture of this fast-grow­ing avi­a­tion mar­ket

Business Traveler (USA) - - BUSINESS TRAVELER -

One on One with Shaoy­ong Liu, pres­i­dent of China Eastern Air Hold­ing Com­pany. US air­line traf­fic up 2.5 per­cent in 2014. En­ter­prise con­tin­ues global ex­pan­sion. Sher­a­ton en­larges global pres­ence. The Res­i­dence by Eti­had lands at JFK in De­cem­ber. ev­ery Pic­cadilly opens. JAL de­vel­ops Ap­ple Watch app. Protea Fire & Ice! bows in Pre­to­ria. Bac­carat de­buts in NewYork. Mar­riott sets sum­mer roll­out for Ap­ple Pay. Plus lounge up­dates for Qatar in Doha, Emi­rates at LAX and United all over.

Many pre­dict China will soon over­take the US as the world’s largest air mar­ket. What does the growth of China’s com­mer­cial avi­a­tion mean on the global stage?

MR. LIU: It’s true. China’s com­mer­cial avi­a­tion has seen steady mo­men­tum in re­cent years. In 2014 Chi­nese air­lines car­ried 390 mil­lion pas­sen­gers, a 10.1 per­cent in­crease com­pared to 2013. How­ever, in com­par­i­son to the US com­mer­cial avi­a­tion, there is still a large gap in var­i­ous as­pects such as per capita in­come, per capita travel by air and the num­ber of air­ports avail­able. In the past year alone, China Eastern has no­ticed North Amer­i­can air­lines rapidly rais­ing the stakes in prof­itabil­ity and com­pet­i­tive­ness.

BT: What are your plans to deal with this growth?

MR. LIU: China Eastern has es­tab­lished a global sales and mar­ket­ing net­work. In fu­ture, we will con­tinue our hub strat­egy, strength­en­ing key mar­kets. Fur­ther­more, China Eastern will ex­tend its in­ter­na­tional net­work with sup­port from the SkyTeam part­ners.

BT: In what ways has the SkyTeam Al­liance been crit­i­cal to China Eastern’s growth plans?

MR. LIU: SkyTeam is not only one of the big­gest air­line al­liances in the world, but also the al­liance with largest in­vest­ment and mar­ket share in China. There­fore, join­ing SkyTeam was a very im­por­tant strat­egy for China Eastern.

First, through our part­ner­ship with SkyTeam, we work to­gether with the world’s best air­lines such as Delta, Air France-KLM and jointly de­velop our long­haul routes to Europe and Amer­ica. Sec­ond, we have fur­ther en­hanced the qual­ity of in­ter­na­tional op­er­a­tions.

BT: At the same time, you’re pur­su­ing other part­ner­ship op­por­tu­ni­ties.

MR. LIU: China Eastern’s con­cern is not just to en­able pas­sen­gers fly across con­ti­nents, but also to help them to reach the fi­nal des­ti­na­tion. Ad­di­tional part­ners, such as Canada’s WestJet and Vir­gin Amer­ica Air­lines, al­low us to fo­cus on other smaller mar­kets.

BT: What’s the strat­egy be­hind China Eastern’s 777-300ER air­craft with a new cabin lay­out?

MR. LIU: There are sev­eral eco­nomic ad­van­tages of the air­craft it­self. The 777-300ERs can carry more pas­sen­gers with longer range, low noise and less fuel con­sump­tion. The top-level cabin con­fig­u­ra­tion al­lows for bet­ter ser­vice – all very im­por­tant to at­tract in­ter­na­tional trav­el­ers. Com­pared to other Chi­nese air­lines’777s, China Eastern hosts the most busi­ness class seats. Plus, China Eastern has de­vel­oped sev­eral first and busi­ness class prod­uct com­bi­na­tions at very fa­vor­able prices.

BT: Are we likely to see more ser­vice to North Amer­ica?

MR. LIU: While it is likely we will see more North Amer­i­can ser­vice, the cities are still un­der con­sid­er­a­tion. Apart from the pas­sen­ger vol­ume, we have to con­sider fac­tors such as our part­ners.

BT: What is the im­por­tance of your in­creas­ing ser­vice to China’s sec­ondary cities?

MR. LIU: The space in pri­mary city air­ports in China is very tight, mak­ing it hard to add more flights and routes. How­ever, there are al­most 120 sec­ondary cities in China, whose an­nual av­er­age growth rate has in­creased by 15 per­cent. Th­ese routes will be sup­ple­men­tal to our trunk routes but im­por­tant to strengthen our hub net­work.

BT: China is build­ing new air­ports at a record pace. How will th­ese change the face of China’s air ser­vice?

MR. LIU: Cur­rently, the ca­pac­ity in some ma­jor air­ports in China is al­most full mak­ing it dif­fi­cult for air­lines to add more flights. The con­struc­tion of new air­ports has brought some re­lief to the sit­u­a­tion.

In ad­di­tion, new air­ports will be equipped with self-serve and mo­bile ser­vice de­vices to im­prove the check-in and board­ing ex­pe­ri­ence, and brand new VIP lounges.

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