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Long-haul plans could fall short

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2016-08-05 09:18Global Times Editor: Li Yan

Do China's second-, third-tier cities need so many cross-continental flights?

From east to west, from north to south, a growing number of cities in China are in a frenzy to have long-haul international flights.

In the latest news, Sanya could be the next Chinese city to host a Tibet Airlines flight to Sochi, Russia, via a stop in Chengdu, capital of Southwest China's Sichuan Province.

If approved, travelers departing from South China's Hainan Province from November will be able to enjoy Sochi's frozen scenery within a day of departing.

And Sanya is just one of many cities that have become international departure points. Kunming, capital of Southwest China's Yunnan Province, could soon host flights to Moscow and Los Angeles. HNA Group's Lucky Air intends to launch twice-weekly routes from Yunnan to each city as early as December.

It wasn't long ago that opening international routes was the exclusive domain of the major airlines, such as Air China, China Eastern and China Southern. But with the rapid expansion of the domestic high-speed rail network and the rising number of Chinese tourists going oversees, smaller airlines have begun to set their sights abroad.

So far, there are nine carriers in China that either have cross-continental routes or are planning to open such routes. Many of the routes take off from second- and third-tier cities. As far as I can see, they include half of the capital cities of China's 31 provinces and autonomous regions.

Are these airlines expanding overseas too fast? Is it necessary for them to open more long-haul international routes from second- and third-tier cities?

A map of departure points for long-haul international flights from China now includes Shenyang in Northeast China, Nanjing and Hangzhou in East China, Haikou and Guangzhou in South China, and of course Chengdu in Southwest China.

But Chengdu is really more of an exception. Airlines have opened or are considering opening as many as 15 non-stop intercontinental flights from Chengdu to cities such as Moscow, Frankfurt, London, Paris, Prague, New York, and Sydney. That's far more destinations than any other non-first-tier city in China.

It makes sense considering so many people are flying to and from Chengdu. The number of air travelers passing through the city's airport hit 37 million in 2014 and surpassed 40 million in 2015. It is the fourth busiest city in China in terms of air travel, after Beijing, Shanghai and Guangzhou.

So much so that the local government is planning to build a second airport so the city can handle 90 million passengers a year.

The question, however, is whether other cities can copy Chengdu's success. I don't think so. In a way, Chengdu is simply serving its role as the air passenger hub for Southwest China, much like the roles that Beijing, Guangzhou and Shanghai play for their respective regions.

It's quite understandable that Chinese airlines want to expand and grab the market share, or maybe even challenge foreign airlines on some parts of the map. However, it's far more important for them to maintain a stable flow of passengers.

For smaller airlines, the strategy of expanding into direct overseas flights seems attractive, but it also begs a question. How many international travelers in second- and third-tier cities are unwilling to transfer to a hub airport, like the one in Chengdu, before taking a flight out of the country. Flights from these airports tend to be considerably cheaper. And I believe most Chinese travelers are price-sensitive. Consequently, I suspect they would prefer saving money over the convenience of a direct flight from their hometown.

It's true that more international flights will benefit the economy of the departure city. However, airlines should be opening new routes primarily to meet demand, not simply to dress up the local government's annual GDP report, especially if the government hasn't offered subsidies or other beneficial policies.

To my understanding, what second- and third-tier cities really need is more regional routes, which will give them greater access and more robust connections to more of China's developed regions.

 

  

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