Private Chinese airlines seek larger market share

Global Business

China’s largest private airline carrier Hainan Airlines has for years been denied direct flights on some of the country’s biggest international routes. Hainan is now taking on the state airlines by launching the world’s first flight between Beijing and San Jose, California, on Monday. Additional Shanghai to Boston and Shanghai to Seattle routes will come later this month.

Private Chinese airlines seek larger market share

Private Chinese airlines seek larger market share

China's largest private airline carrier Hainan Airlines has for years been denied direct flights on some of the country's biggest international routes. Hainan is now taking on the state airlines by launching the world's first flight between Beijing and San Jose, California, on Monday. Additional Shanghai to Boston and Shanghai to Seattle routes will come later this month.
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CCTV America’s Grace Brown filed this report.

In the first quarter of 2015, China’s airlines flew more than 100 million passengers, a 13 percent increase from the end of last year. While it’s good times for airlines, there isn’t much choice for travelers.

Source: World Trade Organization

“There’s not much competition between Chinese airlines. I know most are state-owned. None offer special service. For business, I fly Air China, because it’s convenient… But the service foreign airlines offer is more personal,” said passenger Xi Hou.

Among domestic carriers, state airlines control China’s main direct flights, such as Beijing to Washington. But competition from non-state carriers is taking off. With more Chinese traveling within and outside of China than ever before, private carriers are now expanding routes in this market, and testing the dominance of China’s state-owned airlines.

Private carriers such as Hainan Airlines – backed by George Soros – are taking routes less traveled. In 2012, Hainan’s parent company, HNA Group, acquired a 48 percent stake in French airline, Aigle Azur, flying Hangzhou to Paris, when Beijing was blocked. In June, it bought a six percent stake in South Africa’s Comair.

Vice President Hou Wei says said the launch of the first-ever direct flight from Beijing to San Jose is significant.

“Today’s environment is changing and we do a lot of new services from China to overseas cities. We are targeting passengers not just from China, but also the places we serve,” Wei said.

Hainan Airlines passengers say the personalized service sets them apart.

Ray Kelly, country manager for Gilt Edge in China, said on a recent Hainan flight he mentioned to airline staff that the company should serve a Western breakfast, and 40 minutes after disembarking he got a phone call that promised that the next time he flew on the airline he would get a Western breakfast.

“And true to her word, in two days when I came back to Beijing, there was,” Kelly said.

Hainan’s alternative routes and personal touch seem to be working, net profits up more than 425 percent in the first quarter over last year.


Seth Kaplan on China’s aviation heat

For more on how China’s aviation sector is heating up, CCTV’s Phillip TK Yin spoke to Seth Kaplan, Managing Partner at Airline Weekly.
Follow Phillip Yin on Twitter @PhillipTKYin

Seth Kaplan on China\'s aviation heat

Seth Kaplan on China\'s aviation heat

For more on how China's aviation sector is heating up, CCTV's Phillip TK Yin spoke to Seth Kaplan, Managing Partner at Airline Weekly.
Download Video