Cheap Canton
China Southern Airlines is throwing down the gauntlet to the old-guard with rock bottom fares as it attempts to make a name for itself flying between Europe and Australia.

According to Bloomberg, CSA is undercutting Qantas by as much as 34 per cent between Sydney and London. It is prepared to sacrifice profitability so it can take market share away from Dubai, Hong Kong and Singapore among others.

Here are the all-important numbers:

China Southern’s cheapest economy-class fare between Sydney and London for a two-week trip starting May 4 was A$1,442 (9,309 yuan, US$1497) on travel booking website webjet.com.au yesterday [March 13].

The lowest price for a non-Chinese airline, on Malaysian Airlines, was 19 per cent more expensive at A$1,721 (11,110 yuan, $1,786). Emirates tickets started at A$1,896 (12,240 yuan, $1968) while Singapore Air’s was at A$1,940 (12,524 yuan, $2,014).

The cheapest Qantas ticket was 51 per cent more than China Southern, at A$2,180 (14,074 yuan, $2,263).

Currently, all 30 weekly China Southern flights to Australia from Guangzhou are profitable, an incredible feat. However, a health check on the rest of the airline’s international network tells a different story. The majority are languishing in the red, along with its domestic operations.

These problems can be attributed to a lack of awareness to the CSA brand globally and serious competition in the mainland, but its image is changing as it further embeds itself into the SkyTeam airline alliance.

In announcing the Canton Route last year, it made a play on Cathay Pacific’s Hong Kong territory, but it also joined a handful of airlines connecting the dots, usually via the traditional Kangaroo route.

At the start of next month, Australia’s Qantas, which first coined the Kangaroo Route, will leave its Singapore stopover for Dubai in partnership with Emirates, leaving British Airways and Singapore Airlines a wide berth. But these carriers carry some of the highest fares, leaving state-backed CSA to undercut its rivals.

Bloomberg reports:

The [Canton] route will provide experience needed for further expansion into North America and Europe as annual spending by Chinese tourists exceeds $100 billion.

Here’s what the rivals have to say:

The Chinese carriers “are on our radar,” said Simon Hickey, head of Qantas’s international unit.

The competition “keeps us on our toes,” Singapore Air spokesman Nicholas Ionides.

Qantas and Singapore Air are configuring their own strategies for growth and profitablity

Peter Harbison of aviation analyst CAPA says:

“The sheer volumes of travelers mean that eventually China can be the most powerful transit country in the region, probably the world…They will be able to price very, very competitively.”

Plans to make Guangzhou a transit hub of choice are well underway, with upgrades to existing infrastructure and an expansion in full swing. Still, it has a ways to go before it can take on award-winning Changi Airport in Singapore, the premier choice.

BA to go A380 to Hong Kong
British Airways is joining the superjumbo pack later this year as it unleashes its first batch of 12 Airbus A380s to Hong Kong. The UK’s flagship carrier has penned November 15 for its first departure if all goes according to plan.

This will be a boost also to Cathay Pacific, as it joins up with BA to become the partner of choice to take passengers between Australia and Europe. Deploying the A380 will marginalise CSA’s attempts to shift passengers from Hong Kong to Guangzhou.

All change for Dragonair?
Rumours of a name change at Dragonair are being speculated, first reported by CAPA, as Cathay Pacific seeks to accelerate the makeover of the regional airline it bought back in 2006.

A rogue photo sent to the South China Morning Post has heightened speculation that change is afoot.

The name is Dragon… Cathay Dragon.

The hybrid puts a Swire stamp on its purchase, keeping part of the Dragonair brand – stated to be a powerful name among Asian travellers – and shoehorning Cathay, widely recognised around the world, to show who’s in charge.

The option to refresh the brand comes as naming rights expired last year leaving the door open to change.

Dragonair’s cabin offerings will soon be matched to its sister airline in all but colour, giving consistency to customers – a regular complaint among seasoned Cathay travellers shoved onto codeshare flights.

Dragonair image: SCMP / Other images: Danny Lee

The new Addis Ababa–Lome–Rio de Janeiro–Sao Paulo service is marketed as a seamless gateway to Asia.
Ethiopian hopes to use Addis Ababa to its advantage but joins a long list of airlines competing on the Latin American-Asia route.

Crucially, it will be the sole operator between Addis Ababa and Brazil. However, its conservative approach means a non-direct flight will operate to build demand. Time will tell if the market takes off.

Ethiopian is one the better airlines on the African continent with ambition and vision, but the reality is they are up against bigger, legacy carriers such as Air China and Singapore Airlines.

Guangzhou’s thriving African expat community creates a demand for service between the city and Africa, which Ethiopian is looking to exploit. Conservative estimates put the number of Africans in Guangzhou at 20,000, but it could be as high as 150,000, according to the Globe and Mail:

There are at least 20,000 Africans, mostly from West African nations such as Nigeria, Ghana and Mali, living legally in Guangzhou, a city of about 12 million. The number could be as high as 150,000 if you include the many illegals and those temporarily in the city chasing business opportunities.

The demand is there but the big question is whether it will all work.

Generally, non-SkyTeam alliance carriers have a tougher job of competing with the dominant China Southern.

However, Emirates competes with the Guangzhou-based carrier on the Dubai route. And it has no problem filling planes with feeder traffic transiting at its Dubai hub coming from all over the world. It’s a big airline with a well-established frequent-flyer program – and officially claims the shortest LatAm-Asia service.

That being said, from Guangzhou, Ethiopian has no other feeder traffic or much help from fellow Star Alliance members, but as CAPA reports, it doesn’t have a problem filling planes, which is why it switched to a daily service late last year.

Since Ethiopian has been clipped by the grounding of Boeing’s 787 Dreamliners worldwide, the plan may not even leave the gate if it’s new planes are not back in service by June.

Without these aircraft, Ethiopian’s five 777-200LR would not have sufficient capacity to cover its existing long-haul network to Beijing, Guangzhou, Toronto and Washington Dulles, as well as a direct Hong Kong service.

We say watch this space.

Images: BriYYZ/Flickr and CAPA

China Southern ramps up London service
It wasn’t long ago that China Southern Airlines (CSA) launched their new Guangzhou-London service, and they’re already increasing the frequency of flights. Starting October 28, Heathrow will get daily service from Guangzhou, the only non-stop flight between the two cities.

Shenzhen starts-up Sydney service again
Hainan Airlines is returning to Sydney, Australia once more starting October 29 after a near nine-month hiatus – also making it the furthest international destination from Shenzhen to anywhere in the Asia-Pacific, let alone the world.

China Southern’s South East Asia shuffle
From September 21, Kuala Lumpur gets an extra daily flight from Guangzhou, taking the total to three flights a day.

Starting September 24 there will be extra flights from Guangzhou to Ho Chi Minh City, Singapore and Yangon. Ho Chi Minh goes thrice-daily, Singapore has been increased to four-a-day while Yangon temporarily doubles to four-a-week until October 26. Finally, starting October 1, twice-daily service resumes on the Guangzhou-Manila route after passenger traffic took a knock over rising political tensions between the mainland and the Philippines earlier this summer.

Hong Kong’s winter blues
Winter is the time of year where wings are clipped in the northern hemisphere as far as long-haul goes. British Airways are keeping to its 14 weekly departures from Heathrow, previously aiming for 17, while European rival Lufthansa reduces daily departures to a five or six flights a week service.

And in recent weeks, Hong Kong has been hit by strikes at Air India. While there’s been a resolution, flights from Delhi to Hong Kong and onwards to Osaka Kansai and Seoul Incheon are still suspended until September 1.

Emirates A380 Hong Kong u-turn
The Dubai-carrier has backed out of plans to introduce a 14-weekly A380 service to Hong Kong. It will stick to its previous seven A380 departures via Bangkok, with four other aircraft going to Hong Kong non-stop.

There’s still hope
It’s not all bad news in Hong Kong. Hong Kong Airlines is boosting services to Shanghai Pudong starting August 1. Its introducing an extra three flights on top of the 14-weekly in an all-new business class only flight. And from September 10, the number of flights will rise to 21 a week.

Source: Airline Route