username

Mainland and Taiwan had their meetings recently and Taiwan again brought up letting Chinese citizens to transit through Taiwan for other countries.

http://udn.com/NEWS/MAINLAND/MAI1/8505899.shtml

There are some interesting numbers in the various news reports:

1 - 1.8 M Chinese citizens visited US last year and 60% transitted through Japan, Korea and HKG
2 - The thinking for CI and BR is to get a piece of the pie and mainly from secondary Chinese cities - those are still huge cities that CI/BR/AE/B7 now serve
3 - Taiwan side said that this will also relieve pressure at PEK, CAN and PVG
4 - CI and BR Management think their passenger volume can go up 40-60% if this opens - quote and context "
華航和長榮主管表示，大陸北京、上海、廣州等中轉點已面臨飽和，大陸航空公司才會透過東京、香港等中轉。如 果台灣也可成為中轉站，載客量將可提升四成到六成" as it seems a little high

Background:

1 - Nither recognize each other as a country so both sides use another travel document when going to the other side.
2 - Taiwan currently allows its citizens to transit through Mainland for other destinations without this document.
3 - Mainland currently requires its citizens to have the special document to trainsit in TPE leaving Mainland - essentially making it not feasible for most
4 - Yet, mainland citizens can transit through TPE into Mainland (since no one at their origin to enforce the documentation requirement)
5 - Passport is not an issue since transitting passengers are not officially entering the other side (what about IRROPS?)
6 - BR/CI want this badly. Mainland has never agreed to even think about this when Taiwan brought this up. This time, it looks like there is some movement
7 - From some Mainland cities (e.g. Xiamen), transitting through TPE is actually the most logical path

I am sure existing CI/BR passengers don't want this to happen but it will and it will be interesting to see what it does to fare.

coolfish1103

I'll believe it until it actually happens.

If it does indeed happen then I highly doubt BR/CI are retiring fleets as fast.

tris06

I dont think its bad for current customers of CI or BR. It will allow both airlines to have bigger fleets which will allow more convient sceduling. Also the demand and supply will eventually even itself out so apart from short term issues the fares wont change that much. Also for frequent fliers i doubt many mainland chinese will fly enough to get the ranks. So it wont flood the lounges.

username

It is interesting to see how big EVA and China have gotten the last 20 years but I guess looking at CX and SQ, it is possible that they will keep growing and get really big.

tris06

BR and CI will be restricted to how much they can grow unless they can get this transit issue solved. Otherwise they can only pick up customers for transit from Japan,southeast Asia or US.

If Chinese citizens can depart places like Xiamen, Wuhan, Changsha,Nanjing and even places like Chengdu and Chongqing then they should be able to get many customers. places future north would be easier to connect through places like South Korea or Japan if not a direct flight from China.

There is limited potential from more southern routes as it would then be competing with the likes of HK and CAN. Shenzhen,Naning or Haikou could see a reasonable boost.

moondog

I'm in Nanning again now, and going between here and the US really is quite annoying. The problem is the airlines that serve logical connecting points (like TPE or HKG) aren't the same airlines that can take me across the Pacific. I'm not sure opening up Taiwan to PRC nationals would change the market dynamics enough to justify BR or CI trying it out Nanning and places like it. After all, HKG has no such restriction, and KA hasn't been able to sustain many of its tier 2 city routes (though it does still place its code on a fair number of them).

tris06

Well of course it depends where in the US you are going. If your flying to Vancouver, Honolulu, LA,San Fransisco or New York then they do provide the service to fly on to the US.

Maybe their time schedules are not suitable right now for connections but they dont worry about that right now considering there is no on connecting traffic.
You can get CI and I maybe even BR all the way. Its under a code sharing agreement with Air china and China southern.
But anyway CI and BR dont fly there only because they are not allowed to. That's the whole point about this transiting thing they want to open up China more to their services. They have older planes they could retire or preferably use on short haul routes to China to fill the capacity gap until more new inventory comes.

Also another thing to add is that places like Nanning until recently lacked much of a market who wanted to travel overseas. Also not as wealthy as 1st tier cities. But that is changing gradually. With the interest of Chinese to visit Taiwan and connect on to places like US the route is viable.

gengar

Oh, c'mon. Of course it's bad for current customers of CI and BR.

tris06

Well i can see where your coming from but I want the company to stay around not go bankrupt. No point being a member of an airline that's losing money. Their not losing lots of money but they are not making much at all.. Overall i would say small losses.

I think the long term picture..

Just consider how pissed off the Qantas members must be for all the routings that are being canceled now. But i am sure they enjoyed half empty cabins alot of the time.

I doubt there will be that many emerald or higher from mainland China as its still requires connections which most wealthy Chinese don't like that much.

And finally do you hear Asiana members complaining about the hordes or Chinese going through Korea to the US?

gengar

Quick thoughts:

1. CI is the flag carrier - it's not going anywhere;
2. short term profit strategy is rarely good for customers (see UA) and negative changes, even if each individually small, can impact HVF behavior and thus yield/PRASM growth in a huge way (again, see UA);
3. long-term growth strategy is dangerous if it depends on low pricing in a competitive market with high cross price elasticity (interesting you bring up Qantas given how much they lost on Jetstar, right?);
4. even if there is long-term growth potential, it can still be bad for current CI/BR customers; and
5. just search the Asiana forum, although granted some of the complaints are what I'd consider a bit insensitively timed.

I actually don't have a dog in this fight since I'm likely gone from CI after they get rid of F. I do appreciate that you see where I'm coming from, though. That's all I ask.

tris06

I am surprised you wont fly if First class goes. No doubt the Business class is going to be just as good as the old first class was. I am more looking forward to the A350's than the 777's though. And hope the 747's stay on for some time in short haul.

I think whether or not the Chinese market opens up the market will get more competitive. CI/BR job no matter what will be to cut costs or improve efficiency.

So i have no complaints in paying more to fly China airlines because if i was always getting dirt cheap deals then others would too.

I would say there is not as much competition in mainland china than there is outside at the moment. All CI and BR need to do is have access to the markets and then make sure they don't add too much capacity but ensure high load factors keeping the yield high enough.

If they can even drip feed from mainland china to boost their cabins (Long haul) but not sacrifice yields then that can only be positive. There are always times when consumers will find other airlines itineraries full or not convenient to them. The cross straight flights are a boom and will be if they only so very gradually open more flights across the straights.

If both want to get more then of course they will need to cut yields.

I think most programs around the world apart from ME airlines are under pressure.
Just been reading the Delta changes which have annoyed many.

Anyway hard to tell the future. We'll just have to see..

By the way. If your flying first class, then CI gold wont mean much as it don't give you any additional benefits that first class passengers already have.

bzcat

Well, the big problem I see is that even if China lifts the transit ban on its citizens, CI and BR still won't have enough frequency or rights to really serve transit traffic to places like XMN, FOC, NKG, CSX, KHN, or WUH. In order for this to work, each airline will need to have minimum double daily service to all the 2nd tier cities south of PVG and north of CAN.

The current bilateral air service agreement is highly restrictive and most stations don't even see daily service even with code share.

That being said, a lot of these Chinese cities will probably benefit from being able to transit in TPE. For example, XMN-TPE-LAX on a single CI or BR ticket is probably a lot easier to do than a mixed MF-CZ itinerary that involved backtracking XMN-CAN-LAX.

But then the question you have to ask is... why would the Chinese airlines want to see this happen? What does CZ (which will be impacted the most) have to gain from this?

username

That is when the Chinese saying "nutritious water does not go into outsiders' fields" comes in In the best situations, the Mainlanders and Taiwanese view they are "the same family" - better have the Taiwanese make the money than the Japanese or Korean.

It seems a lot of the limitation is due to capacity - the sky is full. They were talking about adding another air traffic route that will help.

Of course, the scary thing is what happens if the relationship between the two sides sours? Or, we are past that point now?

coolfish1103

Well, the thing is it's already happening for the Chinese carriers where they may carrier Taiwanese passengers to Europe or America since Taiwan did not ban this, so BR and CI are simply asking the Chinese government to lift the restrictions.

It's not like the Chinese cannot limit the number of frequencies each station can be served. Places like Guangzhou do not even have double daily frequencies from either side. There are many other ways to put restrictions than this unfair practice.

warakorn

One of the annoying things about Mainland China:

At exit immigration in Mainland China -> Chinese citizens must show a valid visa for the country where they are flying to.

Thailand does not require a visa for Chinese tourists.
However, China Immigration Service requires a Thai visa from its citizen if they want to leave Mainland China.