According to the estimation by BCG group, the annual passenger flows from Europe to the Middle East and Asia will surge to 130 million in 2020, indicating a big chance for global airline industry. On this occasion, China’s emerging Europe-to-Asia airlines is catching the eyes of the whole industry.
What advantages exited for China airlines? What opportunities lie forward? What actions should be taken to reshape the Europe-to-Asia route? You would find the answers to those questions in this article.
Cost advantage of China’s Airlines
The cost advantage of China airlines enables them to be competitive among other international airlines. The low cost base is 10 to 20 percent lower than other Asian airlines and 30 to 40 percent lower than international legacy carriers. Meanwhile, the low labor rates, modern fleet and low fares continue to strengthen this predominance.
Growing Consumer Base From Travel Sector
Based on another study by the BCG Group, Chinese travelers will take 2.5 billion trips and spend approximately $850 billion by 2020. Going beyond the borders will generally become an essential part of Chinese travelling. More outgoing passengers forecast more trips in and out of China. It is estimated that Chinese carriers will account for 6% global capacity.
Chinese Traveler’s Preference
There are 2 preferences of Chinese travelers to be notices. One is the purchasing tendency. Chinese travelers are more likely to go shopping when going abroad. The other one is about their information source. They will turn to the internet for all information, including ticket promotions, package tours.
Guidelines For Airlines Out of China
Given the threat from China airlines and the opportunity of reshaping the route, here are some suggestions from BCG for action.
- Join forces in the industry to diversify the offerings and lower cost
- Realize the brand loyalty by targeting at specific groups and quality improvement of service
- Explore ways to build win-win situation with Chinese carriers
Source: The Big Squeeze: How China’s Emerging Airlines Will Change The Industry by BCG