US menu of­fers food for thought to Asian air­lines

China Daily (Canada) - - HONG KONG -

Air­lines have been a big ben­e­fi­ciary of low oil prices. But in­vestors would love to see Asian air­line com­pa­nies take a leaf out of their US coun­ter­parts’ book to fur­ther boost earn­ings.

Imag­ine this. The com­bined af­ter-tax profit of the 25 US air­lines last year hit $25.6 bil­lion — up a whop­ping 240 per­cent from the pal­try $7.5 bil­lion in 2014 — ac­cord­ing to the US Depart­ment of Trans­porta­tion.

Tum­bling fuel costs ac­counted for a big part of the profit surge — a fac­tor that ap­plied to all air­lines around the world. Then the ques­tion is: Why are US car­ri­ers do­ing com­par­a­tively bet­ter than their coun­ter­parts else­where?

The an­swer lies in the fact that US air­lines have done away with nearly all the free­bies that have been a drag on the prof­its of other car­ri­ers.

For years, pas­sen­gers on US air­lines have had to pay for bag­gage, meals, drinks and a range of other ser­vices which air trav­el­ers in other coun­tries take for granted.

Fliers in the US are will­ing to swal­low the ex­tra fees be­cause the sys­tem is in­her­ently fair. For in­stance, in Asia, why would any pas­sen­ger need a meal on a typ­i­cal two-hour flight from Hong Kong to, say, Shang­hai?

The cost of the meal, which isn’t cheap, is fac­tored into the air­fare. There­fore, it’s un­fair to ask any pas­sen­ger who doesn’t care about the meal to pay for it.

Asian air­lines have built their rep­u­ta­tions on qual­ity ser­vice even on short-haul flights.

Of course, their cus­tomers have to pay for it whether het­h­want they want it or not.t.

Most pas­sen­gers value new air­craftr­craft and­com­for­t­ats.

com­fort­able seats. But more and more canan do with­out the other ser­vices,er­vices, such as in­flightt en­ter­tain­ment, as they cann al­ways turn to their portablee mu­sic play­ers or tablet com­put­ers.

You may ar­gue that those who can’t be both­ered with in­flight ser­vice can choose the al­ter­na­tives provided by a grow­ing num­ber of bud­get air­lines.

That’s not al­ways a valid choice be­cause of their low flight fre­quen­cies and lim­ited des­ti­na­tions com­pared with full-ser­vice car­ri­ers.

Chi­nese main­land air­lines, many of which are listed in Hong Kong, could greatly lift their in­comes

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.