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Aussie Airline Books China As New Hub

Posted on: Tuesday, 10 January 2006, 18:00 CST

By Lu Haoting

China could become the most important Asian destination port for Qantas Airways, as the Australian airline plans to turn the country into its primary transit port for Aussies travelling to Europe.

The move could replace Singapore as Qantas' major hub for transferring passengers to European destinations.

After a short pullout from the Chinese market, the world's second oldest airline is re-launching non-stop service from Sydney to Beijing on Monday and expects to offer daily flights to and from Beijing and Shanghai within two years.

The company's second brand Jetstar is also expected to link secondary destinations in China and Australia in the next few years, said Margaret Jackson, Qantas' chairman.

"China will become an important destination for us in Asia and Australian travellers could make a stop in China on their way to Europe," Jackson told China Daily. "It will be very attractive to them."

In 2001, Qantas briefly departed from the Chinese market due to "commercial reasons," said John Borghetti, the company's executive general manager.

"In those days there were only Australian leisure travellers into China. Australia was not an ADS (approved destination status) country for China and it was difficult for Chinese travellers to get down to Australia," Borghetti said.

"But we are confident that the market is mature now. We believe the growing trade relationship between the two countries, increasing demand for leisure travel in both directions and the growing number of Chinese students attending schools and universities in Australia will see the market continue to grow strongly in the years ahead," Borghetti said.

The Flying Kangaroo resumed non-stop flights from Sidney to Shanghai at the end of 2004. With the new Beijing services, Qantas currently offers four flights a week from Shanghai to Sydney.

The traffic between Australia and China grew 22 per cent last year, and more than 1 million Chinese tourists are expected to travel to Australia annually in the next 10 years, according to Tourism Australia's forecast.

Jackson said Australia has to market itself better to make more Chinese people aware that the land down under is a travel destination with easy access.

There are about 26 flights a week linking Australia and China, including those operated by Air China, China Eastern and China Southern Airlines. Currently, Qantas holds 30 per cent of the market, Jackson said.

Jackson said that Qantas' Sydney to Shanghai flights currently have an 80 per cent average occupancy rate. Around 38 per cent of the passengers are business travellers and 35 per cent are holiday passengers.

Nick McGlynn, Qantas' manager for East China said currently only 30 per cent of the airline's business in China comes from individual travellers, with the rest coming from tour groups.

"But our aim is to increase the number of individual travellers and hope to see half of the business come from individual travellers," McGlynn said.

Qantas is the world's 11th largest airline in terms of revenue passenger kilometres (RPK).

During the year ending June 30, 2005, Qantas recorded a profit of A$1,027.2 million before tax, up 6.5 per cent on the previous year. It also reported a net profit of A$763.6 million after tax, up 17.8 per cent year on year.

Source: China Daily; North American ed.

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