China Southern Airlines

Marketing the emergence of China's sixth-freedom hubs

In a move that will tilt the world's aviation axis, Chinese airlines are making bold efforts to target sixth-freedom traffic from their geographically well-positioned hubs that further benefit from very low cost bases. There are challenges including service, distribution and marketing, but on the latter two, China's airlines are making efforts and not standing still.

Chinese airlines' sixth freedom roles could challenge Middle East, Asian, European hubs this decade

Signs are now emerging of the enormous – and largely unanticipated – impact that China’s airline industry will have on the international network as this decade rolls out. It will significantly tilt the world airline system.

China’s airlines have expanded remarkably since 2000, but most of that growth has been in the domestic arena, responding to the country’s rapid economic rise. It is only more recently that the airlines, with Central Government encouragement, have begun to focus more on international routes.

There are obstacles to be overcome. Service quality is typically not at the standards expected of the Asia Pacific region carriers; marketing and distribution remains a problem; yield management systems have been inadequate; and limited networks still make achievement of critical mass a challenge.

Yet Chinese airlines have two great advantages when it comes to operating sixth freedom network roles: they have a massive and growing third and fourth freedom market; and they are geographically strategically placed to service traffic flows from all countries to the south, connecting with North America and Western Europe using the effective north Polar routing. Additionally, they have relatively low cost bases.

China Southern Airlines receives country's first A380 with eye on potentially ordering more

China Southern Airlines has become the first operator of the A380 in China and the seventh globally, with the newly delivered A380 the 58th A380 delivered to date by Airbus. China Southern chairman Si Xianmin said the airline would evaluate the aircraft's performance before deciding whether to acquire additional A380s beyond its small order for five.

The carrier has declared it still has not yet decided whether to deploy the aircraft to Europe or the US after initial test operations on domestic trunk routes between Beijing, Shanghai and Guangzhou that commenced on 17-Oct-2011, but says negotiations between the government and the European Union over the latter's emissions trading scheme will not be a factor.

There has been local speculation the Guangzhou-based carrier, Asia’s largest by passenger numbers, will use the A380 to open long-haul routes from a new long-haul hub in Beijing instead of Guangzhou, where the carrier is based and currently operates long-haul routes from. The move would bring China Southern into competition with Air China, and is reportedly considering targeting Air China's two most profitable routes: Beijing-New York and Beijing-Pairs CDG. China Southern serves Paris from Guangzhou, but New York would represent a new destination. China Southern only offers passenger services in North America to Los Angeles. Airbus, in its Sep-2011 A380 destination map, indicated Europe would be the first destination for the carrier's A380. The carrier is also seeking to launch service between Guangzhou and London and could operate A380 equipment on the sector.