Chinese carrier Hainan Airlines is seeking rights to further expand its long-haul network into the United States of America (USA) with an application to authorities for permission to introduce flights to Los Angeles and New York from Jiangbei International Airport in Chongqing. The carrier plans to offer two or three weekly frequencies on the routes using Boeing 787 Dreamliner equipment.
In a formal application to the US Department of Transportation (DOT) for a foreign air carrier permit to serve these two additional routes, Hainan Airlines proposes starting flights on the Chongqing – Los Angeles route as early as the quarter, with flights between Chongqing and New York, serving John F Kennedy International Airport, starting from the second quarter of 2017.
These will be the first non-stop flights in and out of North America from the developing city of Chongqing, one of one of the five national central cities in China. Located in the southwest of the country, Chongqing is one of the most densely populated municipality in the country, is a major manufacturing centre and transportation hub and serves as the economic centre of the upstream Yangtze basin.
Hainan Airlines has been developing its own presence at Jiangbei International Airport as well as through its sister HNA Group ventures: Capital Airlines, Tianjin Airlines and low-cost carrier West Air will all provide feed on the domestic front complementing Hainan’s own branded flights. Hainan Airlines currently offers a single international link from Chongqing to Rome Fiumicino, while Tianjin Airlines also links the city with Auckland, London Gatwick and Phuket, Hong Kong Airlines operates to Hong Kong and West Air flies to Singapore.
Jiangbei International Airport was opened in 1990 and replaced Baishiyi Airport as the main air gateway to Chongqing. It is now the country’s ninth largest airport having grown from just 2.78 annual passengers at the start of the Century in 2000 to over 32 million annual passengers in 2015, an average annual growth of 17.9 per cent. In fact, double-digit year-on-year traffic rises were recorded in all but one of those 15 years – the exception being a 7.6 per cent growth in 2008.
These operations are heavily skewed to the domestic market which accounts for almost 95 per cent of its available departure capacity this winter, according to schedule data from intelligence provider OAG. The growth in Jiangbei International’s foreign network saw international capacity grow to its highest ever share last summer of 8.2 per cent, before slipping to 6.9 per cent this winter, which despite still being a record seasonal level has been impacted by Finnair cancelling its Helsinki – Chongqing route during the first quarter due to crew training needs.
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Flight operations out of Chongqing are dominated by Sichuan Airlines (15.3 per cent capacity share) and it is a focus city for Air China (14.6 per cent share). West Air is the third largest operator (11.0 per cent share) ahead of majors China Southern Airlines (10.8 per cent share) and China Eastern Airlines (8.7 per cent) and will provide important regional feed into Hainan Airlines new US routes. The latter has just a 5.2 per cent share of capacity under its own ‘HU’ code serving a network of 15 destinations.
Chongqing is currently the 14th largest source market for passengers flying between mainland China and USA. In the last 12 months, an estimated 34,000 bi-directional O&D passengers flew from the city to points across the US with Los Angeles, San Francisco, New York, Chicago and Detroit the largest destination markets, according to data from the AirVision Market Intelligence tool from Sabre Airline Solutions for the last year (12 months to November 2016).
Hainan Airlines first inaugurated non-stop service to the United States in June 2008 with flights between Beijing and Seattle. In recent years, it has started non-stop services between Beijing and Chicago and San Jose and between Shanghai and Boston and Seattle. It also has offered flights between Changsha and Los Angeles since January 2016 and late last year added a non-stop service between Beijing and Las Vegas.
The airline says the relaxation of US-China visa requirements is already dramatically increasing travel between the two countries, resulting in more demand for air capacity. It requests in its application to the US DOT that its request for an exemption and amended foreign air carrier permit be reviewed “on an expedited basis” so it can begin offering the proposed services “as soon as possible”.
“Hainan Airlines intends to operate scheduled flights to both US cities using Boeing 787 aircraft with a two class configuration. Hainan proposes to operate the Los Angeles route initially with eight to nine flights per month beginning in the first quarter of 2017, and the New York route initially with eight to nine flights per month beginning in the second quarter of 2017,” it confirms in its letter to the US DOT.
The Government of China designated Hainan Airlines as the preferred carrier to conduct the proposed flights from Chongqing to New York in October 2016 and from Chongqing to Los Angeles in December 2016 despite interest in the routes from Air China. The Chinese regular, the Civil Aviation Administration of China (CAAC) has a one route, one airline policy.
Air China will this summer become the largest operator between China and USA - overtaking United Airlines - after boosting its own offering. The airline recently confirmed it is adding frequencies on its flights from Beijing to Newark and Washington, albeit Houston flights will see a small reduction. Its summer offering in the China - USA market this year is forecasted to be up 7.9 per cent on summer 2016. This is actually its slowest rate of year-on-year summer growth since the start of the decade following rises of 14.2 per cent in 2012, 27.3 per cent in 2013, 35.6 per cent in 2014, 19.6 per cent in 2015 and 10.8 per cent in 2016.
Looking back ten years to the summer of 2007 and United Airlines had a dominant 44.3 per cent share of the available non-stop capacity between China and USA, but despite growing capacity by 10.1 per cent it had seen this share eroded to 31.9 per cent by summer 2011. In Summer 2012 it had risen back up to 38.1 per cent following its merger with Continental Airlines, but this has again slipped down to just 21.8 per cent last summer and a forecasted 20.8 per cent this summer, despite capacity growing 23.2 per cent since 2012.
Overall, non-stop air capacity between China and USA has grown 252.3 per cent over the last ten years from just over 845,000 one-way seats in summer 2007 to the almost three million already available for sale this coming summer, according to published schedules on OAG. There are now ten airlines providing scheduled services between the two countries with Air China leading the way in summer 2017 with a 20.9 per cent share versus United Airlines’ 20.8 per cent share.
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