Hainan Airlines

Xiamen Airlines gears up for international expansion

Xiamen Airlines, China's sixth largest carrier and the world's 27th largest by available seat kilometres, is gearing up for more forays into the international market. Xiamen is predominately a domestic carrier with only 5.7% of available seats allocated to international services. Xiamen in May-2011 ordered six Boeing 787s for services to Europe and North America after their 2014/15 delivery dates. But international expansion, albeit medium-haul and not long-haul, can commence earlier with the carrier retrofitting its 757s with a three-class configuration, including having lie-flat beds in first class. 

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.

Qantas' Hong Kong capacity increase underscores city's importance to pan-Asian strategies

Qantas will increase capacity from Jan-2012 on its Sydney-Hong Kong service despite the route soon losing traffic as onward passengers to London are forced to transit through Singapore after the Hong Kong-London service ends in Mar-2012. The increase shows the emerging relevance Hong Kong, and its access to mainland China, has to Australia as Cathay Pacific increases competition and Hong Kong Airlines looks to enter the market. Hong Kong also has strategic relevance as a low-cost carrier hub for Jetstar or any other pan-Asian airline – if local incumbent Cathay Pacific loses its fight to keep LCCs out from its home turf.