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