Routes Reconnected Q&A: Sanya Phoenix chairman eyes return of international flying

How badly has Sanya (SYX) been affected by COVID-19?

Since the outbreak of COVID-19 in 2020, Sanya's domestic and international flights have been canceled to varying degrees.

The number of passengers on international and regional flights at Sanya Phoenix Airport has plummeted. From Jan. 23 to Feb. 7, the cumulative number of international and regional passengers at Sanya Phoenix Airport was only about 20,000. Since Feb. 8, all international and regional flights at Sanya Phoenix Airport have been grounded.

There were 36 international and regional routes stopped and 18 international and regional airlines were affected. The recovery time for every single international and regional route to return is yet to be determined.

At present, there have been no new cases of COVID-19 in Sanya for more than half a year.

As a popular tourist destination, Sanya attracts a large number of tourists who come for vacations, and the Sanya tourism market is very hot. Since May 2020, Sanya Phoenix Airport has been among the best in its resumption of work and production, which has contributed to the rapid recovery of Sanya’s aviation market.

Among the 10-million-class airports in mainland China in July, Sanya Phoenix Airport had the highest degree of recovery of outbound flights. In August, the number of monthly flights and passenger flow both increased year-on-year, and production and transportation maintained a good momentum of sustained and steady growth.

In September, Sanya Phoenix Airport recovered the fastest among all ten-million-class airports, with passenger throughput exceeding the same period last year by 16.1%. Sanya Phoenix Airport achieved an annual passenger throughput exceeding 10 million passengers on the first day of the National Day, and the passenger throughput has exceeded 10 million for 10 consecutive years.

How have conversations with your airline partners progressed in this time?

Many domestic airlines contacted Sanya Phoenix Airport wanting to open more routes to Sanya or to increase routes to Sanya's key passenger source areas. They are actively visiting the airport for seminars to communicate and negotiate matters such as optimization of the route network layout and overall development of passenger and cargo services.

There are also some international airlines contacting Sanya Phoenix Airport, hoping to resume their previous international and regional routes and open the seventh freedom route after the international and regional pandemic situation stabilizes.

What incentives/policies have Sanya implemented to drive recovery?

Sanya Municipal People’s Government has established special support funds, timely awards and supplementary funds and taxation reductions. Sanya Phoenix Airport also complied with the government’s notice by reducing or deferring payment, reducing corporate rents, reducing sea area usage fees and strengthening financial policy support.

We also implemented rent reductions and exemptions for merchants at the airport to support the development of tourism companies and promote economic recovery in Sanya.

How is the provincial/national government supporting your recovery?

At this stage, the national and provincial governments have formulated relevant preferential policies to stimulate the development of the aviation tourism market in Hainan Province, including the following:

• Fee reduction and burden reduction policy

The Civil Aviation Administration of China has implemented the reduction of air traffic control charges in domestic, Hong Kong, Macao and Taiwan regions for foreign airlines.

The base price of the first and second types of airport take-off and landing charges are reduced by 10%, and parking fees are waived; the airway fee (except for overflights) is reduced by 10%.

The benchmark price of jet fuel for domestic flights by domestic airlines was reduced by 8%. At the same time, route flight licensing management has been optimized, supporting airlines to flexibly adjust flight plans, international route structure and traffic rights based on market demand, simplify route flight approval procedures, schedule coordination procedures, and shorten the approval time limit for the resumption of international routes.

• Jet Fuel Bonded Policy

From July 1, domestic and foreign airlines operating at Haikou Meilan Airport, Sanya Phoenix Airport and Qionghai Boao Airports will have lower jet fuel prices for refilling.

The domestic trade jet fuel import and sales price difference has decreased by CNY50 ($7.60) per ton, and the comprehensive service fee of bonded jet fuel decreased by $100 per ton.

The sales price of bonded jet fuel is now the lowest in China.

With China’s recovery faster than other countries, when borders reopen is there an opportunity for Sanya to attract more international airlines and tourists?

Under the current global pandemic situation, more international tourists are interested in traveling to Sanya, which is an important step to restore the international aviation market. But on the other hand, the entry of international tourists would also pose a huge challenge to Sanya's pandemic prevention and control work.

Before COVID, our international route network covered important countries and regions along the Silk Road Economic Belt and 21st Century Maritime Silk Road such as Hong Kong, Macau, Taiwan, Russia, Ukraine, South Korea, Central Asia, East Asia, and Southeast Asia. A relatively complete route network layout had been formed.

In 2019, Sanya Phoenix Airport completed 8,829 international and regional flights, with a passenger throughput of 1.2 million passengers. Compared with the same period in 2018, they increased by 16.8% and 36.3% respectively.

International and regional passengers accounted for 6% of the total annual passenger volume.

Which key routes/networks are you focusing on in 2021 and beyond?

After the pandemic situation stabilizes and Sanya Phoenix Airport's international and regional routes resume, we plan to rely on the current international and regional route network to utilize the third, fourth, fifth, and seventh air traffic rights opening and visa-free port visa policies for 59 countries.

As well as the favorable policies of the Sanya Municipal Government to grant financial subsidies to overseas routes, the unique geographical location of Sanya connects Australia, Southeast Asia, Japan, South Korea and Russia.

Sanya Phoenix Airport will continue to promote Hainan’s seventh freedom rights policy to foreign airlines, actively communicate with airlines and charter operators, and strive to promote the landing of fifth and seventh freedom rights routes.

We hope to make new breakthroughs in the development of international routes, more foreign tourists transiting through Sanya, improve international accessibility and aviation security capabilities, further improve the international and regional route network of Sanya Phoenix Airport and make Sanya a hub for international routes.

Photo credit: Sanya Phoenix Airport (portrait) / Visit Sanya (main)