The race for Chinese connections as Qantas increases Asian presence

Courtesy Qantas

Courtesy Qantas

Qantas took another step forward to increase its presence in the Asian market, which it has recognized as a key strategy in returning the international operations of the airline to profitability. Just last week, it expanded its codeshare agreement with China Eastern Airlines.

“We said we would expand Qantas’ Asian network through our airline partnerships and we’re now delivering on that promise,” said Qantas General Manager Andrew Hogg.

The codeshare will provide greater access to China, offering a choice of 17 direct weekly flights between Australia and mainland China on either airline, and onward connections via Shanghai to 11 other Chinese destinations domestically. Qantas already has a codeshare service with China Eastern between Shanghai and Singapore.

It is inevitable that the competition will zoom in on the rivalry between Qantas and Asia’s leading airlines Singapore Airlines (SIA) and Cathay Pacific Airways. Although Qantas reiterated the importance of Singapore as its Asian hub – after moving its hub for Europe-bound flights to Dubai following a mega-alliance arrangement with Emirates Airlines – it is clear that Qantas will tackle the Asian market in more ways than just relying on transit connections as there will be more direct flight options between Australia and Asian destinations. That reduces the importance of Singapore and Hong Kong as the go-between.

Additionally, Qantas is pushing the low-cost subsidiary brand of Jetstar across the region through Jetstar Asia based in Singapore, Jetstar Hong Kong pending approval, and Jetstar Japan based in Narita.

If China is where the aviation pot of gold is, Qantas is not wasting time. Cathay, though unhappy with Qantas’ proposed Jetstar operations based in Hong Kong, already has a stake close to 19 per cent in Air China and a stake of 49 per cent in Air China Cargo. Its wholly-owned subsidiary Dragonair operates an extensive network connecting Hong Kong and other Chinese destinations.

That leaves Singapore Airlines to work on its Chinese connections. Five years ago, it failed in a bid to buy a stake in China Eastern, but it has not ruled out the possibility of reviving that bid now that it has divested in Virgin Atlantic – a lacklustre acquisition it made more than decade ago. There is also the possibility of it looking at China Southern Airlines.

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About David Leo
David Leo has more than 30 years of aviation experience, having served in senior management in one of the world's best airlines and airports. He continues to maintain a keen interest in the business, writes freelance and provides consultancy services in the field.

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