Before China was recognised widely as a unique growth opportunity, its aviation planners already knew China would quickly evolve to becoming the world’s biggest market. To guide development, they turned to the world’s existing largest market – the United States – and became enamoured with the hub concept, from Northwest’s fortress in Detroit to American’s sprawling operation at Dallas. The lesson that US airlines and airports imparted on Chinese delegations was that when given large geography, numerous competitions and dozens of major cities, airlines needed to focus on dominating a strong hub.
With San Jose and Manchester, what is most likely is that Air China is pre-empting Hainan Airlines. Hainan, like Air China, is based in Beijing. Under China’s one airline, one route policy, long haul routes are generally limited to having only one Chinese carrier operate. Hainan’s later start, and private status (Air China is the country’s flagship) meant most prime long haul routes were already flown by Air China and could not be accessed by Hainan. There were exceptions: Air China overlooked Chicago and Toronto, and Hainan was able to launch flights.
Hainan’s long haul network has, by force, been mostly to secondary cities: Boston, Brussels, Prague, Seattle and so forth. But to its credit, Hainan has been able to make this work. Earlier in 2015 Hainan commenced a new phase of long haul development by serving its Beijing destinations from a new long haul hub at Shanghai. Boston and Seattle were its initial destinations from Shanghai; Hainan already served them from Beijing (Seattle is its oldest trans-Pacific route).
See related report: China Eastern, Delta and Hainan Airlines’ new routes accelerate US-China aviation development
Chinese airlines generally have a single long haul base for prime routes. There are exceptions, notably Air China’s presence in Shanghai. There are also the various secondary cities that see long haul service, often subsidised and not a core strategic part of an airline’s network. Hainan’s dual Beijing/Shanghai hub is notable, even if it is smaller than Air China’s Beijing/Shanghai hub.
China Southern has tried to build up in Beijing (with proposed Beijing-Paris and Beijing-New York routes, already served by Air China) but this has been unsuccessful. Its sole long haul flight from Beijing is to Amsterdam, and China Southern in northern summer 2015 introduced the A380 on this sector.
See related report: Air France-KLM’s Asian partnerships: JAL codeshare ends, China Southern A380 & Xiamen to Amsterdam
The dual hub strategy allows Hainan to access more prime markets and also reduce its emphasis on Beijing, where primary and secondary growth opportunities are dwindling since the hub is already so strong. Air China likely saw Hainan continuing with this strategy. In North America, San Jose is Hainan’s only market already served from Beijing that Hainan could open from Shanghai. Hainan’s other North American points – Chicago and Toronto – already have a China Eastern presence.
China Eastern flies to Toronto and has recently proposed Chicago for a 2016 launch, part of its North American growth that will probably see it triple seat capacity over three years (so far it has more than doubled, see graph below).
Hainan has proposed service from Tianjin to New York and Vancouver, but these cities already have China Eastern service from Shanghai. For North America, Hainan in Shanghai now needs to look at frequency increases or adding all new points.
Shanghai Pudong Airport to North America (seats per week, one way): 19-Sep-2011 to 8-May-2016
Photo: Eric Salard / Flickr