Chinese airlines look inland for outbound opportunities

Wed May 13, 2015 11:19pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article
[-] Text [+]

GRAPHIC: Passenger traffic: link.reuters.com/qaj74w

By Fang Yan and Matthew Miller BEIJING, May 14 (Reuters) - Chinese airlines are banking on the newly rich in China's inland provinces to drive the next phase of their global expansion, offering flights to destinations like San Jose and Nairobi from cities hundreds of miles from aviation hubs on the Chinese coast.

Air China , China Eastern Airlines and China Southern Airlines are adding flights to New York, Paris and Sydney from thriving inland cities such as Wuhan and Chengdu. The carriers are also flying to second-tier cities in North America, Europe and Australia, spurred by a growing penchant for overseas travel. In January-to-March, the number of kilometres travelled by paying passengers, or revenue passenger kilometres (RPKs), climbed to near record highs, according to filings by the three carriers.

"Historically what happened is strong hub-to-hub," said Andrew Herdman, director general of the Association of Asia Pacific Airlines. "But when the market grows, it makes sense to come up with direct service to non-hub cities."

Last year, China's outbound leisure travellers topped 100 million, a new record. That number is expected to rise 10 percent this year as countries including the United States, France and Australia relax visa policies. With the boom in leisure travel, Chinese airlines on China-U.S. routes will be offering more seats than American carriers this year for the first time, according to Mark Clarkson, business development director for Asia Pacific at data and analytics company OAG.

Air China plans to resume services to Africa as the region becomes a must-go for adventurous Chinese travellers. The flag carrier will be flying to Johannesburg and Addis Ababa later in the year. Rival China Southern will be flying to Nairobi from Guangzhou from August. Even smaller carriers traditionally focused on the domestic market are joining the fray. Sichuan Airlines is flying to Vancouver and Melbourne from Chengdu. Xiamen Airlines, which has ordered six Boeing 787 jets, is set to fly to Amsterdam from Xiamen in July and possibly to North America later in the year. (Additional reporting by Shilpa Murthy in BENGALURU; Editing by Ryan Woo)