Just heard from a fiend that JAL will suspend its route between Japan and Chinese tier-two cities like Xiamen, Qingdao, or even Dalian. JAL lost money on these routes but it will give its market share to ANA.
The loss of Narita-Hangzhou (HGH) service is quite unfortunate. I think ANA pulled out of that route, too, so now it's only going to be Air China and an occasional China Eastern flight.
I can't quite figure out how that route was unprofitable. The fares were/are quite high.
I am not familiar with NRT--HGH flight? Is the loading usually high enough? The interesting thing is that China--Japan--China is very cheap, but Japan--China--Japan is bery expensive. Does that mean Japanese is richer than Chinese? Or Japanese can afford expensive fare?
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Airlines often charge different amounts for an AAA-BBB-AAA fare compared to a BBB-AAA-BBB fare. It has to do with what people in AAA vs. BBB are willing to pay for the trip, as well as that airline's market share in AAA vs. BBB. JAL can get away with charging more ex-NRT since it's a hub for them. Apparently what they were charging wasn't enough though.
But that issue is not that apparant in other countires like US. The fare of US-other countries-US is usually in the same level as the fare of other countries-US-other countries. But for Japan-China-Japan route, it is sometimes more than double the fare of China-Japan-China route. People can buy two RT China-Japan-China and just use the half of the leg to get one Japan-China-Japan route.
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I continually fail to understand how the China-Japan-China market for air fares actually functions. JAL and ANA report load factors of 50-60% on routes to China taken as a whole, which presumably means fairly high load factors for routes like HND-SHA and very low factors for NRT-DLC and the like.
In a sane marketplace, an airline struggling to fill planes on a secondary route would reduce fares until the seats got sold, or at least until a profitable 80% load factor was reached. And yet even the cheapest fares are way above the level one would expect, even looking at other Asian routes, for a flight of 2-3 hours in length (and in some cases, such as FUK-PVG, barely over an hour).
The fares I end up having to pay to fly PVG-NRT, even on Air China, are comparable to economy fares to Europe from PVG and are significantly more than I would need to pay to fly, say, PVG-SIN, where there is in theory less competition and the flight time is close to 5 hours.
It seems to me that JAL and ANA would rather not fly at all than lower their fares. How this is a good thing for the Japanese economy is beyond me!
I continually fail to understand how the China-Japan-China market for air fares actually functions. JAL and ANA report load factors of 50-60% on routes to China taken as a whole, which presumably means fairly high load factors for routes like HND-SHA and very low factors for NRT-DLC and the like.
In a sane marketplace, an airline struggling to fill planes on a secondary route would reduce fares until the seats got sold, or at least until a profitable 80% load factor was reached. And yet even the cheapest fares are way above the level one would expect, even looking at other Asian routes, for a flight of 2-3 hours in length (and in some cases, such as FUK-PVG, barely over an hour).
The fares I end up having to pay to fly PVG-NRT, even on Air China, are comparable to economy fares to Europe from PVG and are significantly more than I would need to pay to fly, say, PVG-SIN, where there is in theory less competition and the flight time is close to 5 hours.
It seems to me that JAL and ANA would rather not fly at all than lower their fares. How this is a good thing for the Japanese economy is beyond me!
The airfares are set by the governments and are illiquid! Both JL and NH codeshare with their Chinese partners so they probably reap the benefits whomever you choose to fly! And yes, I agree that the fares are ridiculous !
The loss of Narita-Hangzhou (HGH) service is quite unfortunate. I think ANA pulled out of that route, too, so now it's only going to be Air China and an occasional China Eastern flight.
I can't quite figure out how that route was unprofitable. The fares were/are quite high.
JAL cut my nrt-hgh flight on december, so i have to fly pvg instead, and also my daddy has to drive 4 hours to get pvg.
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Quote:
Originally Posted by Q Shoe Guy
The airfares are set by the governments and are illiquid! Both JL and NH codeshare with their Chinese partners so they probably reap the benefits whomever you choose to fly! And yes, I agree that the fares are ridiculous !
Not quite. Full fares are set by the governments, but discount levels and conditions are not (which is why, for example, Air China are usually a little bit cheaper than NH or JL). The level of codesharing does indeed mean that they get revenue whatever happens, minimising the incentive to really compete...
Not quite. Full fares are set by the governments, but discount levels and conditions are not (which is why, for example, Air China are usually a little bit cheaper than NH or JL). The level of codesharing does indeed mean that they get revenue whatever happens, minimising the incentive to really compete...
But since the majority of us have no access to the discount fares(especially ex.China) it is a moot point. And they won't compete....ever!
Even a consolidator usually can't get much cheaper (maybe a couple hundred RMB? Or am I not looking in the right places?) than the airline's heaviest discount level, in my personal experience (living in Shanghai and looking for tickets China-Japan-China). If you can fit into the fare restrictions you'll still end up paying around 3500RMB (given 7.5RMB-100yen and 6.8RMB-US$1 it's a little less than 46k yen and about US$512) SHA-HND or PVG-NRT round-trip (the only cheaper option on PVG-NRT is NW/DL at 2500RMB round-trip with consolidator, though the trade-off is obvious), around 2800RMB (about 36.5k yen, US$410) PVG-KIX round-trip, etc...
Out of curiosity, how much is it the other way around?
