Attractive combinations of price, service and safety are helping China-based airlines take off in the lucrative travel market.
By Michael Gebicki
It’s an infusion of competition that has flown under the radar: seven China-based carriers now operate flights to Australian cities. That’s more than the total number of European and North American carriers flying into Australian ports.
Between them, Air China, Beijing Capital Airlines, China Eastern, China Southern Airlines, Hainan Airlines, Sichuan Airlines and Xiamen Airlines offer non-stop services from Australia to more than 10 cities in China, with more destinations on the agenda.
Driving this push from Chinese airlines into Australia’s airspace is the rise and rise of Chinese travellers. The numbers are dizzying. According to the China Outbound Tourism Research Institute, 120 million Chinese travelled overseas in 2015, an increase of 12 per cent over the previous year.
There is plenty of blue sky in the figures, too – less than one in 10 of China’s population currently holds a passport, and the McKinsey Global Institute foresees threefold growth in the number of people in China able to afford airline travel in the next 10 years.
Broadening the horizons
One of the traditional constraints to the huge appetite among middle-class Chinese for overseas travel has been the relatively tight visa regulations imposed by destination countries. That’s changing fast.
In December 2016, the Australian Government announced its intention to offer fast-track visa processing to Chinese tourists and confirmed the introduction of 10-year, multiple-entry visas for eligible Chinese visitors. The announcement was part of an open-skies deal brokered between China and Australia that removed all capacity restrictions on their respective airlines.
“In both business and economy classes, Chinese carriers are among the cheapest...”
Since they appeared on the scene, China’s carriers have carved out a significant share of the air travel market – and not just for travel to Chinese destinations. Their highly competitive seat prices have played a big role in building that market share.
In both business and economy classes, Chinese carriers are among the cheapest for flights from Australia to North America and Europe, and these fares exert downward pressure on other carriers’ airfares.
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Prices to China can be spectacularly low. At the time of writing, a quick web search revealed return flights from Sydney to Shanghai two months ahead being offered for under A$600 by each of China’s three state-owned carriers – Air China, China Southern Airlines and China Eastern. China Southern Airlines was also offering the cheapest listed flights to Rome.
The competition could get even hotter. China is steadily reforming its state-owned enterprises, ramping up their exposure to free-market competition in a bid to promote efficiency and profitability, and that has implications for the entry of low-cost carriers to the market.
The Civil Aviation Administration of China has given a tick of approval to Spring Airlines, the country’s first budget carrier, founded in 2005 and now flexing its muscles on the international scene with flights between Shanghai and Japan, South Korea and Thailand.
“China’s carriers have carved out a significant share of the air travel market.”
China will become even more accessible in the years ahead. In mid-2016, China announced plans to build 66 new airports, a 25 per cent increase on its existing number of commercial airports. This will significantly boost the number of entry locations for visitors, and enable even more of China’s emerging middle class to become airborne.
Service on the rise
Although they offer attractive prices, several of China’s airlines suffer from poor perceptions of service delivery, and this is largely reflected in airline review sites such as Skytrax and AirlineRatings. Reviews suggest that Air China and China Eastern are best avoided if service, food quality or entertainment are important components of your in-flight experience. Reviews from business and economy class travellers tend to run in parallel.
However, China Southern Airlines rates well, and Hainan Airlines is another worthy contender, with one-stop flights from Sydney and Melbourne to several major cities in Western Europe, as well as the US. On the Skytrax list of the world’s top 100 airlines for 2016, Hainan Airlines was the highest-placed China-based airline, in 12th position, ahead of Air New Zealand and Japan Airlines, and three places behind Qantas.
The safety record of many Chinese carriers is similarly competitive. Germany’s Jet Airliner Crash Data Evaluation Centre puts Hainan Airlines in third position in its latest safety ranking. Sichuan Airlines and China Eastern all ranked above several other respected airlines, such as Air France, American Airlines and Korean Air, in the 2016 list.
China beyond the big three
Most international visitors to China have traditionally entered through one of three major airport cities – Beijing, Shanghai or Guangzhou. The Chinese airline expansion, for Australian flyers in particular, means direct access is now more readily available to some of China’s tier II and III cities.
- Kunming, with thrice-weekly non-stop flights from Sydney on China Eastern, is the entry point for Yunnan Province. It’s home to many of China’s ethnic minorities, whose cultures are expressed in distinct styles of architecture, cuisine and costume. High points include terraces of barley and maize carved into mountain scenery, the deep gorges of the Yangtze, Mekong and Salween rivers, and the city of Lijiang, where the shops and temples of the old city border a gushing stream.
- The Yellow Sea port city of Qingdao, accessible via a non-stop flight from Melbourne aboard Beijing Capital Airlines, is famous as the home of Tsingtao beer and hosts a beer festival known as the Asian Oktoberfest. Twisting alleyways, street markets and a lively open-air food scene add interest and variety for visitors.
- Xiamen Airlines now offers non-stop flights from Melbourne and Sydney to the Fujian port town of Xiamen, one of China’s most appealing cities, endowed with street markets, subtropical greenery and a rich colonial heritage. Just offshore, Gulangyu Island was once designated a foreign enclave, one of only two on Chinese soil (the other being Shanghai). Today, with its churches, consulates, villas and all the other apparatus of a colonial-era trading outpost still intact, the car-free island is a major drawcard for local and international tourists alike.
The woman future proofing Sydney airport