Growth in travelers helping to boost Chinese airlines
The world’s largest outbound travel market — China — is poised to expand its airline routes, as more Chinese travel abroad.
On the routes between China and the United States, the growth among Chinese airlines is approaching new heights this summer, as more Chinese are traveling to the country.
According to a report by Sydneybased CAPA Center for Aviation, four major Chinese airlines — Air China, China Eastern, China Southern and Hainan — have scheduled 2,028 weekly flights to the US during this year’s peak July 1 to Sept 20 period, compared with 1,853 from US airlines.
Chinese carriers will overtake their US counterparts for the first time in history to offer more flights to and from the US.
Data from CAPA and US-based OAG show, Chinese airlines will operate 9.4 percent more flights and offer 14.5 percent more seats than US carriers.
Just four years ago, US carriers offered almost twice as many flights on US-China routes as Chinese counterparts, according to CAPA.
Industry insiders say the surge in Chinese visitors to the US is the key contributor to the increase in flights offered by Chinese airlines on these routes.
Last year, the number of Chinese tourists traveling abroad increased by 19.5 percent year-on-year to 109 million, and nearly 2 million Chinese visitors arrived in the US, up 21 percent on 2013, according to the China National Tourism Administration.
With the US relaxing visa rules for Chinese and the larger travel propensity of people in China’s smaller cities, which is a vast and still largely untapped market, the boom looks set to continue. Industry officials expect to record another 25- to 30-percent increase in Chinese travelers to the US this year, about 50 percent higher than previous growth projections.
As China’s summer travel season starts, overlapping with the US high summer travel season, Chinese airlines are expanding more aggressively.
Hainan Airlines launched three China-US direct flight services over one week in June — five weekly flights between Beijing and San Jose in California from June 15, three weekly flights between Shanghai and Boston from June 20, and four weekly flights between Shanghai and Seattle from June 22.
Hainan Airlines Vice-President Hou Wei said at a CAPA conference in April that North America would be the biggest opportunity for the company, which recently announced its intent to purchase 30 787-9s, mostly for North American service.
In China’s second-tier cities, Chinese airlines are developing networks directly connecting to the US.
On June 30, China Eastern began flying directly between Nanjing and Los Angeles. China Southern already carries passengers between the central Chinese city of Wuhan and San Francisco.
Chang Hong, director of Los Angeles Tourism’s Beijing Office, said: “China is a huge market. Tourism demands lead to the launch of flights, while the launches will likewise help to channel and boost untapped tourism markets. We are helping each other forward.”
Data released by the Civil Aviation Administration of China on June 24 showed that China’s international air passenger traffic increased by 39.4 percent in the first five months of this year, 30 percent more quickly than domestic air traffic. A total of 31.52 million passengers took international flights with Chinese airlines last year, an 18.8-percent increase over the previous year.
Chi Zhizhang, Air China’s vicepresident and general manager for North America, said in the past, 80 percent of the airline’s US-China sales were booked in the US. Now that has shifted to a 50-50 ratio. Beyond that, Chi said he expects bookings eventually will swing in China’s favor to 60 percent.
The services on the routes between China and the US are increasingly important for Chinese airlines’ international growth. Chi called the routes “low-hanging fruit”.
Mou Weigang, vice-chairman of Hainan Airlines, said at the China Civil Aviation Development Forum in June that Hainan Airlines will increase investment in international flights, especially those to North America, and add new routes from China’s second-tier cities to North America’s first-tier cities.
Mou was quoted by the online news provider Jiemian News as saying that the growth and development of the commercial aviation industry are because of the new extended USChina visa agreement signed at the APEC summit in November, which is encouraging an increase in Chinese business travelers and tourists to the US.
“Chinese business travelers and tourists are the major market sources for China’s commercial aviation industry, which is boosting the acceleration of our company’s globalization.”
It seems that in the global market, Chinese airlines have many potential advantages, the size in particular. They come from a market of 1.3 billion people compared to 300 million in the US.