Airlines launch new flights to profit from China-US routes

Flights between China and the United States have become increasingly profitable, with Chinese airlines continuing to add flights or open new flight routes to American cities, reports Beijing's Economic Observer.

US carriers have also reaped considerable profits from flying on the China-US routes, but the rapid growth in market share of Chinese airlines during recent years has been a cause for concern for their American counterparts.

A survey conducted by PricewaterhouseCoopers indicated that American companies accounted for 53% of the flights between China and the United States this year, down 59% from a year ago, with Chinese airlines taking the remaining 47%.

Citing figures from the International Air Transport Association, Liu Jichun, vice manager of Hainan Airlines, one of China's four major airline companies, told the paper that Chinese airlines' capacity had posted an annualized growth of 4.7% to 41.5% this year alone.

The number of Hainan Airlines flights between Beijing and Chicago has increased from two per week to four flights per week since Dec. 10, while Xiamen Airlines has nearly doubled the number of its China-US flights from 15 in 2008 to 26 this year.

On April 20, China Eastern Airlines launched a daily direct flight between Shanghai and San Francisco, which is the company's fourth China-US route after New York, Los Angeles and Hawaii. United Airlines and Air China also operate on the Shanghai-San Francisco route.

A China Eastern offi cial told the paper that many ethnic Chinese living in San Francisco and many inbound and outbound visitors from mainland China, Hong Kong and Taiwan going to American cities were flying on the route.

In addition, China Southern Airlines opened a direct flight from Guangzhou in southern China's Guangdong province to Los Angeles in October last year, while Air China has continued to add flights to American cites over recent years with its over three decades of experience in operating on China-US routes.

The intensifying competition is a result of declining revenue from operating domestic flights in China, Lin Zhijie, an official at Xiamen Air, revealed. Additionally, the US government relaxed its policy of granting visas to Chinese travelers last year in order to boost consumption by Chinese tourists visiting the United States. Official US figures estimated that 1.7 million Chinese nationals visited the country in 2013, up by nearly 40%.

Liu said he believes American airlines will soon expand capacity in response to the growing competition posed by its Chinese rivals.

The recent merger of American Airlines and US Airways on Dec. 10 has transformed the carrier into an industry leader and the company is now operating directs flights on the Beijing-Chicago, Beijing-Los Angeles and Shanghai-Los Angeles routes.

The company is also in the process of applying for permission to fly a new route between the Shanghai Pudong International Airport and the Dallas Fort Worth International Airport. If it is granted approval, it is expected to begin operating the route as soon as next summer, the paper said.

Source: Want China Times

from China Travel & Tourism News http://www.chinatraveltourismnews.com/

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