Cathay Pacific CEO John Slosar, speaking on the sidelines of CAPA's World Aviation Summit in Hong Kong, stated (29-Nov-2012) the carrier sees China as an extremely important market and has placed a lot of attention there. Mr Slosar reported China’s outbound travel is estimated to reach 78 million this year and increasing to 122 million passengers p/a by 2020, which will be a big opportunity not just for China’s domestic carriers but also airlines operating to China. More importantly, according to Mr Slosar, the carrier sees Chinese consumers’ increasingly high propensity to “trade-up” as being a strong premium opportunity for the carrier, not just the business end of the market but also the leisure end of the market. One of the reasons Cathay entered into cross-shareholding partnership agreement with Air China in 2006 was based on the recognition of a need to have a China network to respond to the growth it is seeing now. He also said 2012 has been quite an “ok” year but the general feeling about outbound travel in China in 2013 is quite positive. For Cathay, premium outbound travel from China doubled from 2008 to 2012. The carrier has also been quite successful in growing corporate deals in China, up by 33% in 2012. Around 50% of traffic from corporate deals is for premium. The way China is developing as a premium market is different to other markets around the world.
Cathay Pacific notes importance of China market, notes propensity to 'trade-up' to premium ravel
You may also be interested in the following articles...
China and Australia remove airline growth restrictions as China cautiously embraces open skies
China has agreed to liberalise passenger flights and remove capacity restrictions with Australia, its largest outbound long haul market after the United States. This is a relief to Chinese airlines, which face bilateral constraints in North America and Europe. The result is already evident as Chinese airlines deploy more capacity and larger aircraft to Australia.
In North American and European markets the local governments hold back on traffic right expansion (let alone open skies). But for Australia it was the Australian government, which signalled some years ago that it wanted to liberalise once China was ready – a time that has now come.
Australia's view was progressive and detached from bygone days of national carrier interest; Chinese airlines hold 90% of the market to Australia. Elsewhere many governments still hold back on Chinese traffic right expansion so their local airlines can continue to grow. There are 15 Chinese airports that have nonstop flights to Australia with a total of 27 airport pairs – figures that should expand in 2017 as the market evolves further with the Virgin Australia-HNA partnership.
China and France expand flights for airlines, giving China aeropolitical negotiating leverage
China and France have agreed to a significant expansion of flights between their countries. Chinese airlines, which have no more than 50 weekly flights to France, will be permitted to grow to 126 weekly flights within a few years. This tranche of rights will likely double the number of Chinese airlines in France (currently four) and take Chinese airlines to serving French cities other than Paris.
Air France will likely grow partnerships with SkyTeam's China members, although Air France will need to make concessions on its existing China JVs. It is unclear whether Air France will revisit considerations of investing in China Southern.
Chinese airlines will become France's second largest source of foreign long haul flights, and in the long term China could surpass the US. For China, France could become its third largest long haul market after the US and Australia. France is China's third major aeropolitical expansion in recent months, after the UK and Australia. This could give China leverage to press the US and Canada to expand traffic rights, although these markets are far more convoluted.