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Canton route opens up: China’s biggest airline China Southern expanding Australian operations [The Age]

40% cheaper: China Southern offers up a Canton route with ‘no qualms‘ undercutting Qantas and Singapore Airlines to attract bargain hunters to draw Australian passengers to its Guangzhou hub.

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Canton route opens up
Clive Dorman
Source – The Age, published February 4, 2012

On the up ... China Southern staff on an Airbus A380. Photo: AFP

China’s biggest airline as well as key Gulf carriers are expanding their Australian operations, writes Clive Dorman.

Qantas faces new competition on its remaining services to Europe but not only from its rivals in the Arabian Gulf. While airlines such as Emirates and Etihad have been wooing corporate travellers by offering business-class fares to Europe up to 40 per cent cheaper than Qantas fares, China’s lower-cost network of carriers has economy-class fares from Sydney to Paris for about $1550 return.

Paradoxically, the Gulf carriers’ prices are often hundreds of dollars dearer than Qantas at the discount end of the plane, charging about $2000 return to London in economy, while the Australian carrier has economy fares of less than $1800.

The Chinese carriers have no qualms about undercutting Qantas and Singapore Airlines to attract bargain hunters. China Southern Airlines recently announced its new service to Heathrow from Australia will be called the “Canton route”, a self-styled alternative to the long-standing “kangaroo route”.

It is part of a move by the airline to attract Australian travellers to its Guangzhou hub, alongside the promise of fares that might be hundreds of dollars cheaper than the main competition.

Qantas recently halved its services to London, from four flights a day to just two A380 services (one from Melbourne, the other from Sydney and both via Singapore). Qantas has axed daily flights from both Bangkok and Hong Kong to Heathrow to stem losses, expecting onward travellers in those cities to transfer to same-day British Airways services.

Qantas has retained a daily service via Singapore to Germany’s business capital, Frankfurt, but there are rumours it could be next to face the chop.

Meantime, the European economic crisis has put on hold talk by Qantas subsidiary Jetstar of its first services to southern Europe. Italy and Greece are among the worst-affected countries in the euro zone.

AirAsia X has blamed its recent decision to axe its London and Paris services on the European recession and the tax implications of the European Union’s emissions trading scheme.

Yet airlines such as Emirates continue their expansion plans. As well as serving 26 European cities, Emirates has 70 flights a week (10 a day) to Australian cities – Perth, Melbourne, Sydney and Brisbane – operated by planes as big as the 550-seat A380.

Emirates has rights to increase the number of weekly flights to 84 and eventually wants to increase flights to more than 100.

By contrast, China Southern – Asia’s biggest airline and the sixth-biggest in the world, with 80 million passengers carried last year – has 35 weekly flights to Australian cities operated by 25 Airbus A330s, including twice-daily flights to both Melbourne and Sydney. It, too, wants to increase that number.

“This will amount to a travel bonanza for Australia and Australians,” China Southern chief executive Tan Wan’geng said in Sydney last month. “By 2015, China Southern will carry an estimated 1.2 million passengers between Australia and China, around half of them Chinese travellers coming to Australia for pleasure or business.”


Filed under: Australia, Charm Offensive, Chinese Model, Environment, Infrastructure, The Age, Transport

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