Navigating a new growth course

Updated: 2013-04-18 10:30

By He Wei (China Daily)

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"We used to rely on word-of-mouth among overseas Chinese to promote our foreign destinations. Such thinking is outdated and we need to extend our networks to local people," he said.

Currently, the carrier has inked deals with more than 50 corporate clients for first-class and business-class arrangements, which net the most profit in cross-border flights.

He said occupancy rates in these two classes have soared to 70 percent on certain routes such as Shanghai to Frankfurt and Shanghai to Hawaii. A majority of passengers in first class or business class on these flights are foreigners.

"Travelers tend to choose their country's own airlines when taking international flights. Therefore, we need to show what added value we are able to offer."

Backed by dominant market shares in the city's two international airports, with 40 percent at Shanghai Pudong International Airport and more than 50 percent at Shanghai Hongqiao International Airport, China Eastern has counted on diverse intercity travel packages to attract more foreign customers.

While the opening of the high-speed railway in 2010 dealt a heavy blow to the domestic flight market, China Eastern managed to stay afloat by exploring new opportunities.

Last year, it entered into an agreement with the Shanghai Railway Bureau to sell combined air-railway tickets connecting 13 cities that cost less than they would if bought separately. Ma said about 30,000 passengers have benefited from this in the past six months. His goal is to lift this figure to 1,000 passengers per day by 2015.

Ma's other endeavor is to test the budget airlines sector. The partnership with Qantas Group, Australia's national carrier, to run low-cost carrier Jetstar in Hong Kong, is designed to pave the way for the much-neglected low-cost airline market on the mainland.

Being the only national carrier to enter the low-cost segment, China Eastern has its own reasoning. Ma foresaw a surge in domestic travel once GDP per capita reaches $3,000, and that making travel more affordable has been a long-held vision for the carrier.

"Cheap airlines account for up to 30 percent of the European aviation market, but in China it is just beginning to flourish," he said.