China Eastern Airlines GM Ma Xunlun stated the carrier may establish a mainland China-based LCC if its JV LCC with Qantas, Jetstar Hong Kong, proves to be successful, stating “China Eastern has always been trying to enter the low-cost airline market amid rapid growth of the budget carrier sector around the world”. According to reports from China Daily, Shanghai Daily and Yicai, Mr Ma said the carrier may also cooperate with Qantas on the potential new LCC as it seeks to be the first major Chinese carrier to tap China’s LCC market. Mr Ma stated there is no time frame for the new LCC as the carrier’s main priority at the moment is to focus on the development of Jetstar Hong Kong, a major test bed for the carrier. Mr Ma, however, warned there are many hurdles that LCCs face in mainland China “low-cost carrier actually has to bear high costs on fuel, salaries and various operational charges in China.” Commenting on the development of Jetstar Hong Kong, Mr Ma said it hopes to launch Jetstar Hong Kong in 2H2013 adding its fleet target of 18 aircraft by 2015 has not changed, although it will be adjusted on a per year basis depending on the timing of approvals by the Hong Kong SAR Government.
China Eastern Airlines considering establishing mainland China-based LCC with Qantas
You may also be interested in the following articles...
Where the A380 flies: Japan and intra-Asia routes decline while Australia & Middle East grow
The A380 is once again under media scrutiny, despite there being no major movement on the type. Comments from Air France and Qantas about not taking further A380s have long been assumed, and it has been apparent that Malaysia Airlines does not even have the need for its A380s. Singapore Airlines not renewing the lease on its first A380 is hardly surprising, and offers no definitive conclusion about the A380 or second-hand market; early A380s had different production and are not as efficient as later models. The lack of movement on the A380neo continues to irk the model's largest customer by far, Emirates, and may not make for a productive relationship as Emirates weighs an A350 or 787 order.
For most, the A380 continues to fly. How and where it flies is changing. Flights to and from the Middle East are becoming more common as Gulf airlines, and mostly Emirates, take delivery of A380s. A further shift to the Middle East is inevitable. In Japan there has been a near exodus of A380s; airlines dropping the type as they moved from Narita to Haneda, which cannot accommodate the A380 during the day, and Singapore Airlines down-gauging. Intra-Asia flying is decreasing – notable given the growth of A380s based in the region. Services by the A380 to Australia are growing, perhaps as it becomes an easy market for airlines to redeploy capacity amid European security concerns and trans-Pacific overcapacity.
China Southern Airlines deflects yield pressure concerns. Long haul focus shifts to North America
China Southern Airlines may be Asia's largest airline, but it has one of the smallest long haul networks. China Southern has shifted growth to international markets, which represented only 17% of capacity in 2009 but doubled to 34% in 2016. Its long haul plank has been Australia and New Zealand, funnelling traffic from around China down to its southern hub at Guangzhou. China Southern has met its objectives for Australia/NZ and now turns its focus to the market that has preoccupied most other Northeast Asian airlines: North America.
China Southern plans to increase flights from five daily to 11 daily, about the size that ANA is today – and larger than Air China and China Eastern. Although China Southern can build on the principle of using Guangzhou as a North-South hub, North America is a radically different proposition. Guangzhou's southern positioning limits exposure to the Chinese market that China Southern knows best. China Southern will need to target connections to Southeast Asia and India, which have only been a small component of Air China and China Eastern's network.