In 2011 China Eastern Airlines’ chairman Shaoyong Liu envisaged transforming the airline from a traditional carrier to a modern integrated aviation service.
Three years later his vision has finally been realized – with the launch of China Eastern E-commerce on December 7. The company’s primary tasks are to consolidate China Eastern Airline’s internal and external O2O products and service resources and offer a one-stop integrated product and service solution to its customer base that makes 80 million to 100 million trips per year.
China Eastern E-commerce is a wholly-owned subsidiary of the airline and has received a RMB50 million initial capital investment. Its general manager Zhilin Wei outlined three areas in which the company aims to explore to realize potential resources.
The first area involves analyzing the travel habits and demands of its customer base to develop more demand-led services and products in addition to just selling air tickets.
Secondly, the company will explore more channels for utilizing frequent flyer points and extend choices for redeeming from air tickets or products to more partner businesses such as supermarkets and petrol stations, or even offer the option of cash conversion to improve the customer experience of the redemption program.
Thirdly, it will extend services beyond transportation by introducing more added-value products and services. For example travel products like car rental and accommodation will be made available to customers who are booking air tickets on the official website.
Such integrated service is in fact similar to the typical services of OTAs like Ctrip. In recent years, airlines have been eager to regain customer resources from ticketing agents through bolstering direct sales. This battle has evidently been extended from air ticketing service to other service areas.
China Eastern Airlines is not alone with this thinking. China Southern Airlines started a provisional tie-up last month with the Los Angeles city government to promote wellness tourism in a move meant to be the touchstone for its transition to comprehensive services. It has also set up an e-commerce division internally.
International carriers such as Delta Airlines and Austrian Airlines have already established integrated product service and delivery on their official websites, offering one-stop ticket booking, hotel reservation and car rental that help them achieve a much greater percentage of revenues from direct sales than carriers in China. Air Canada, Qantas Airways and Lufthansa also have kicked off their loyalty programs by setting up independent companies, turning them into new areas of growth.(Translation by David)
