Chinese carriers seek to challenge US dominance in China-US airline market
A new era of growth and competition is expected for US and Chinese carriers following the Sino-US bilateral visa extension policy in November 2014.
A new era of growth is expected for US and Chinese carriers following the Sino-US bilateral visa extension policy in November 2014.
Chinese carriers increase flights to the US
China Eastern Airlines launched its “Pacific Plan” to reverse the distribution imbalance between Chinese and US airlines last year. The plan calls for capacity increase in key air routes connecting Shanghai to Los Angeles, New York, San Francisco, Vancouver and Toronto, and adding new routes over the next three years. It also started receiving delivery of Boeing 777-300ER, the latest model in the 777 series, in 2014 to boost its transportation capacity.
China Southern Airlines is the largest carrier in China in terms of fleet size and passenger transport capacity. Although it has never secured Beijing to USA routes, it managed to launch last year flights from Guangzhou to New York and San Francisco via Wuhan. It will up frequency of its Guangzhou New York flight and open a direct service to San Francisco this year.
Air China is the first Chinese carrier to have flights to the USA. It announced that it will operate three flights daily from Beijing to Los Angeles from June this year.
Hainan Airlines makes bold moves
Of the four major Chinese carriers, Hainan Airlines is making the biggest moves into the US market. An airline spokesperson said it will open three new routes in June - Beijing to San Jose (the “Heart of Silicon Valley”), Shanghai to Boston and Shanghai to Seattle. The frequency will initially be five flights per week for Beijing- San Jose and three flights per week for Shanghai-Boston, and will be adjusted according to demand.
Hainan Airlines will use the twin-cabin Boeing 787 Dreamliner that offers passengers a more spacious and comfortable flight experience.
China’s carriers want a bigger piece of the action
Competition among the Chinese carriers on the Sino-US routes is bound to heat up as passenger volume between the US and China increases. US international carriers had 7% y-o-y growth in passenger transport volume, recording 197.3 million trips in 2014. China is the fastest growing market for the US airline industry. It ranked 10th in the national air passenger throughput to the US, 5.13 million passenger throughput, and had the highest growth at 16.6%, according to the US Office of Travel and Tourism Industries.
Chinese airlines have been keen to break the monopoly held by US airlines on China-US flights since 2014.
Since signing the “Sino-US Aviation Agreement” in 2004, US airlines have made a large-scale entry into the Chinese market and have always maintained dominance.
Chinese carriers held a 47% share of the flight service between the USA and China in 2005.This number dropped to 39% in 2009, then rebounded to 47% in 2014 and is expected to rise to 49% in 2015. (Translation by David)