China Eastern growing in North America

Updated: 2015-09-22 13:03

By Li Jing in New York(China Daily USA)

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Carrier will open new routes and boost frequency on existing connections

China Eastern Airlines, one of the top major airlines in China, is focusing on growth in its North American market as it sees a new visa policy boosting travel.

"North America will be a major market for China Eastern over the coming years, even beyond," said Lu Ping, deputy managing director of China Eastern Airlines North America. "The cross-Pacific routes are indispensible, extremely important services of an integral part of the international operations that should be prioritized to develop."

 China Eastern growing in North America

China Eastern Airlines is determined to add more flights to North America. Provided to China Daily

Lu said that is true not only for China Eastern, but also for other Chinese State-owned airlines. "After years of rapid development of China's civil aviation industry, Chinese airlines are poised to eye more on the long-haul air traffic market, to broaden the revenue stream and optimize our internal structure."

Shanghai-based China Eastern is the longest-established carrier in the region. Building on the advantage of an extensive traffic network and a wide client base, it dominates the Shanghai market.

The airline entered the US market in the 1990s and now operates seven cross-Pacific routes to six gateways in North America. Besides Vancouver and Toronto in Canada, it has 35 weekly flights from Shanghai to Los Angeles, New York, San Francisco and Honolulu.

On June 30, 2015, the carrier launched its first direct flight between Los Angeles and Nanjing, Jiangsu's provincial capital near Shanghai, operating three flights a week.

In 2016, China Eastern will initiate flights from Shanghai to Chicago, Lu said.

China Eastern growing in North America

"We are carrying out a Pacific Strategy," she said: "We plan to open new routes to North America and also boost frequencies on existing routes from Shanghai to Los Angeles, New York, San Francisco, Vancouver and Toronto."

China Eastern rolled out Pacific Plan last year to develop the China-North America sector. "It demonstrates the importance of the market in the airline's global strategy," Lu said.

Under the plan, the carrier deployed its first Boeing 777-300ERs to Los Angeles and New York last November and now operates the aircraft on three cross-Pacific routes.

The wide-body Boeing aircraft has six first-class suites, 52 business-class flatbed seats in a 1-2-1 configuration and 258 economy seats in a 3-4-3 configuration. Its business class has an in-flight entertainment system with a 16 inch screen.

The aircraft also features a sky lounge that showcases Eastern and Western art. The planes have in-flight Internet access, making Eastern the first Chinese carrier to provide Wi-Fi services, Lu said.

Consumers are accustomed to easy access to Wi-Fi, and they expect the service on planes to be fast and consistent like at home or work, according to a survey conducted in the United States by Honeywell, said Jack Jacobs, vice-president of Honeywell Aerospace's marketing and product management, one of the world's main aviation systems providers.

China Eastern plans to put Wi-Fi on its entire fleet by 2017 or 2018 and to use the in-flight service for commercialization.

The carrier is scheduled to take delivery of 20 777-300ERs by 2018, making China Eastern the largest operator of the aircraft in China.

"The Boeing 777-300ER fleet will be the driving force for the company's Pacific Plan to raise awareness of the brand and increase its market share in the North American market," Lu said. "Most of the new aircraft will be used on the Pacific routes."

In addition to the new aircraft, China Eastern is also establishing a call center in Los Angeles and will employ some Americans as flight attendants.

"We are convinced that American flight attendants will reduce the language barrier, and more importantly, bridge the cultural gap for our local American customers," Lu said.

She said in the North American market that the airline is looking at more than Chinese as potential customers: "Business travelers are our key market targets, as Shanghai is one of the important financial hubs in the world, now fueled with development of the Shanghai Free Trade Zone."

China Eastern has a fleet of more than 500 aircraft. Its annual passenger volume of more than 80 million has put it seventh among the top airlines globally.

As a SkyTeam member based in Shanghai, it offers a network connecting 1,052 destinations in 177 countries and regions. By establishing alliances with selected overseas carriers, it is capturing a bigger share of the expected increase in foreign visitors to Shanghai while also expanding its network to smaller cities beyond first-tier cities.

China Eastern and Delta Air Lines Inc operate code-share flights on 30 domestic routes in the US, 43 domestic routes in China and seven trans-Pacific routes between the two countries, which together hold about 26 percent of the capacity share in the Sino-US air traffic market, just behind United Airlines' with a 29 percent stake, according to a report published by SinolinkSecurities.

In July, Delta agreed to buy nearly 466 million shares of China Eastern at the price of $0.97 per share. Liu Shaoyong, chairman of China Eastern, said the Delta purchase is an important step by China Eastern to optimize its shareholding structure and promote international development.

"The international market, especially the US routes, is blue ocean for Chinese airlines," said Li Xiaojin, professor of economic-management research at the Tianjin-based Civil Aviation University of China. "As China's economic growth slows, domestic routes are likely to stagnate. But there is growth potential in the international sector."

The air traffic across the Pacific is entering a huge growth period after a new visa policy by China and the US was enacted in November, 2014 with each country giving 10-year tourist and business visas. The visa application process has also been simplified and this has stimulated airline growth. Expanding trade between China and the US has also helped boost the industry.

Driven by rising incomes and relaxed visa requirements, China is the second-largest outbound travel market for the US. More than 2.18 million Chinese people visited the US in 2014, and the number is expected to double to over 4 million by 2020, according to US National Travel and Tourism Office.

Statistics from the US embassy in China showed that 1.84 million non-immigrant visas were issued in 2014, compared to 1.5 million in 2013. This year the number is expected to exceed 2.5 million.

The tourist market promises a great potential, and the market means cooperation as well as competition. US airlines are fighting hard to retain their market share. American Airlines Inc, the world's largest carrier by fleet size, started a daily route from Beijing to Dallas on May 8. It also plans to open up other destinations, according to Erwan Perhirin, Asia-Pacific vice-president of American. The carrier was scheduled to increase the number of flights between Chengdu and San Francisco on June 6.

During this summer season, Chinese airlines for the first time were to overtake their US rivals in the number of flights for the Sino-US market, according to the Center for Aviation, a global aviation market analysis company.

lijing2009@chinadaily.com.cn

 

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