Air Carriers in China, and How That Affects You
June 4th, 2007
I recently did the following post that dealt with air carriers in China, Planes, Trains and Automobiles.
Slowly, I am learning more and more about why flight delays are so common in China, why domestic airline service is less than stellar, why I can’t let it get me upset and I need to roll with it, etc.
Here is yet another good WSJ article that sheds more light on this issue: How U.S. Pact Pressures Chinese Carriers.
Great piece. It helped me better understand why this year was difficult to get tickets for our group and trip. After reading this article I was also struck by the tremendous business opportunities that all of this uncertainty creates in China, while at the same time, a HUGE risk appears for those firms in that industry and who guess wrong.
I had also just assumed that Chinese air carriers were making a killing on their US routes and groups of MBA students flying into China — but apparently that is not the case per this article.
Entry Filed under: Pre-Departure, China, Misc.
3 Comments Add your own
1. Stacey Westenberger | June 9th, 2007 at 6:58 pm
In looking for return flights from China (since I will be staying longer), I was always drawn to the airlines I recognized, such as United or American. Part of this reason was frequent flier miles and another part was the past experiences I have had traveling on these flights. I will be interested to complete the first on the road assignment and see what people are taking our same flight to China, on China Southern Airlines. One interesting question might be to ask how they booked their ticket (online, travel agent, etc.). Also, I suspect to see more Americans on our flight to China, if this is the case, how did they hear about the Chinese Airline? For me, it was both brand awareness and price that led to my final decision for a return flight from Asia to the USA.
2. Chris Carr | June 9th, 2007 at 7:20 pm
Yes, these are excellent questions to ask people you meet on these airlines and in the airports. Well done.
3. Kristin Moran | June 12th, 2007 at 8:01 pm
Almost everyone I have talked to about our China trip has mentioned they either: 1. Are interested in visiting China, or 2. They have recently visited China. Before this year I hadn’t heard about anyone visiting China, except for my dad went to China for business. Now I can’t mention I am going to China without having people tell me what I have to see, what their favorite cities were, how big the Great Wall is, which food to eat and which food to avoid, etc. This increased popularity, and the Olympics, is going to provide so much opportunity for both U.S. and Chinese carriers. China’s airlines are going to face pressure to reduce costs, improve service, and increase profitability for their U.S. flights, if they expect to compete with U.S. carriers. I, like Stacey, am staying in China after the MBA trip and picked my ticket based on carriers I know and trust. I was also surprised to hear that they are not making profits on their U.S. flights and was thrown off by the tone of Karen Chan of Credit Suisse in Hong Kong. I may be reading too much into it, but when she said, “They’re still not making profits on their U.S. flights, so there’s not much incentive for them to increase their flight frequencies” it seemed like the airline had given up without a fight. In our strategy class, we read a case about Otis elevators who became profitable when they turned the company from being an engineering company to a service-based company. From what it sounds like, many Chinese airlines are not focused on customer service (although it would be hard to argue that U.S. airlines are focused on customer services today). Once I like an airline, I tend to stick with it in the future. This is for many reasons including trust and frequent flyer miles. If Chinese airlines could get their “foot in the door” especially before the Olympics (when many tourists will travel to China for the first time) they could probably make a killing on repeat customers.
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