China Southern plans to turn Guangzhou hub for Europe, Oceania transits

CHINA Southern Airlines revealed during a recent promotion conference in Wuhan that it plans to make it Guangzhou hub a transit point for European and Oceanianic flights.

Xinhua reported that most Chinese European-bound passengers transit at Dubai or Singapore, representing a loss of business, inducing China Southern to consider breaking into the international transit market.

Until now China was unable to participate due to limited customs facilities and infrastructure. But as international volumes increase, Chinese carriers are outpacing foreign rivals and are considering participation in what is now a third country transit market.

A flourishing domestic air market has provided a solid foundation for Chinese carriers' international service, while depressed overseas markets offer expansion opportunities.

China Southern Hubei general manager Cai Zhizhou said the cost of launching services and competitive pressures are lower today than they were. Buying aircraft is cheaper, for example, he said, adding that expansion during weak economic conditions can result in market share gains.

Since 2009, China Southern has focussed on Australia as its key overseas market and is now turning to Europe.

With China Southern's expanded network, Guangzhou's transit opportunities has grown from 14,811 passengers in the summer in 2009 to 24,222 this summer.

For three years, the China Southern capacity deployed on the Oceanianic flights has grown more than 50 per cent. In 2009, there were 14 flights per week; today there are 42 going to Sydney, Melbourne, Brisbane, Perth and Auckland. In the first half of this year, China Southern carried 306,800 passengers on the Australian flights, up 28.4 per cent year on year, taking up 45 per cent of China's total. Passenger transits via Guangzhou to Australia have also increased from 148,000 in 2010 to 343,000 in 2011.

On October 28, the carrier will also increase the Guangzhou-London service to one flight per day and bring the weekly service to Europe to 12. On December 18, China Southern will also start a new flights to Cairns and increase its Australian destinations to six. By the end of 2015, China Southern expects to operate more than 110 Australian flights per week.