China Southern Airlines Co (中國南方航空) yesterday rolled out an “all you can fly” pass, becoming the latest in a fleet of cash-strapped carriers to join a promotional craze that analysts have said has helped revive a COVID-19-ravaged air travel market.
At least eight of China’s dozens of airlines have introduced similar deals since last month, often priced at about US$500 for in some cases unlimited flights.
Industry watchers have said that the packages have been a shot in the arm, with costs offset by otherwise empty seats being filled in a country where daily flights last month recovered to 80 percent of pre-pandemic levels.
The global aviation industry is keenly eyeing China as a pilot for air travel recovery trends, as the country reopened its economy months earlier than other places after managing to bring the pandemic mostly under control — at least for now.
However, You Luya (尤璐雅), transportation analyst at Bocom International Holdings Co (交銀國際控股), said that the promotional packages — ranging from unrestricted flights to an array of terms and conditions — can only stimulate demand when coronavirus risks are already sufficiently reduced.
“While these packages may work in domestic markets, we do not expect similar rollouts for outbound routes anytime soon,” she said.
The “Fly happily” deal launched by China Southern, the country’s biggest carrier by passengers, allows buyers to use passes for as many flights as they wish for destinations across the country from Aug. 26 to Jan. 6 next year for 3,699 yuan (US$529.03).
As with other deals, passholders also pay a small tax to the airline — about 50 yuan — per flight.
Meanwhile, China Eastern Airlines Corp’s (中國東方航空) 3,322 yuan “Fly as you wish” deal, launched last month, only applies to weekend travel.
Hainan Airlines Co’s (海南航空) 2,699 yuan package is only valid on flights to or from Hainan Province.
China Eastern has sold more than 100,000 passes, state media reported.
That helped boost passenger loads on its domestic routes to more than 75 percent on recent weekends, according to aviation data provider Variflight.
It is not just Chinese airlines that have jumped on the deals bandwagon to revive the travel industry.
Separately, Asian airlines last month carried only 724,000 international passengers, a 98 percent slump from a year earlier, as restrictions on movement suppressed air travel, the Association of Asia Pacific Airlines said yesterday.
Average passenger load factor was just 36.3 percent, the association said in a statement.
Association director-general Subhas Menon said that the prospect of a recovery in the second half of the year is increasingly uncertain as governments grapple with a resurgence of infections and reimpose lockdowns.
“The industry is in a perilous condition,” he said. “Airlines in the Asia-Pacific region are rapidly depleting cash reserves and incurring massive losses,” Menon said.
Asia-Pacific airlines carried 61 million passengers in the first half of the year, down 68 percent from a year earlier, as travel demand evaporated in the second quarter, Menon added.
Additional reporting by Bloomberg
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Tesla Inc is planning to ship vehicles made at its Shanghai Gigafactory to other markets in Asia and Europe, people familiar with the matter said, as the company looks to realize its plan to reduce shipping costs and manufacture vehicles closer to customers. China-built Tesla Model 3s intended for delivery outside China would likely start mass production in the fourth quarter of the year, the people said, asking not to be identified because the details are private. They said the markets targeted include Singapore, Australia and New Zealand, as well as Europe, where customers currently have to wait for a Tesla to
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Nano-X Imaging Ltd, a start-up founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc to build a machine that could disrupt a century-old X-ray industry. Valued at about US$2 billion after listing on the NASDAQ last month, Nano-X is seeking to transform a multibillion-dollar industry that has essentially relied on the same technology since Nobel Prize in Physics winner Wilhelm Roentgen discovered X-rays in the late 19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays. The backing of SK Hynix, the world’s second-largest maker of memory chips, is a boost for