China Southern ramps up expansion
In a sign of the importance it places on the Australian market, China Southern plans to fly A380s between Sydney and its base in Guangzhou, China's third-largest city, in the second half of this year.
The airline has mostly been flying its five A380s on some of the shortest routes in the world for superjumbos, from Guangzhou to Shanghai and Beijing.
One of China Southern's senior executives, Chen Gang, will be in Sydney at the end of the month, when he is expected to announce the plans to fly A380s to Australia. The airline is understood to still be deciding on the exact timing this year for the entry of the superjumbos.
It is not expected to fly the superjumbos between Melbourne and Guangzhou but will still be using more modern A330 planes on that route later this year.
The introduction of the A380s will be a big step in improving perceptions in Australia that China Southern's on-board products significantly lag other airlines.
Australia has been a testing ground for China Southern's international expansion. Last year it launched the so-called "Canton route" between Australia and London via Guangzhou, as an alternative for Australians to fly to Europe.
The biggest barrier to enticing more Australians to fly via southern China to Europe has been the need to pay $98 for a one-entry tourist visa if they want to stop over.
But China Southern expects local authorities to soon introduce a 72-hour, visa-free policy, similar to what is available for passengers flying via Beijing and Shanghai.
The Chinese airlines are regarded as the sleeping giants of the industry, posing the biggest threat in the longer term to the earnings of incumbents such as Qantas and Singapore Airlines.
China Southern has also been eager to form an alliance with an Australian airline.
But Qantas has hitched itself to Shanghai-based China Eastern via code-share agreements and a joint venture to launch Jetstar Hong Kong by the end of this year.
Virgin Australia's alliance and equity ties with Singapore Airlines also make it less likely it will become a bedfellow for China Southern.
China Southern plans to fly new Airbus A330s to its four Australian destinations by the end of this year.
The airline has been the most aggressive of the Chinese carriers in its Australian expansion. It has 35 weekly return flights to four cities, and plans to boost it to 55 services within two years.
Frequently Asked Questions about this Article…
China Southern plans to start flying its flagship A380 superjumbos between Guangzhou and Sydney in the second half of the year, with a senior executive expected to announce timing soon. The airline has five A380s that have mostly been used on short domestic routes so far.
The introduction of A380s on Australia routes is likely to increase competitive pressure on incumbents like Qantas and Emirates by improving China Southern's onboard product and capacity. The article notes Chinese carriers are long‑term threats to the earnings of established airlines.
No. The airline is not expected to fly its A380 superjumbos on the Melbourne–Guangzhou route; instead it will operate more modern Airbus A330s on that service later this year.
China Southern currently operates 35 weekly return flights to four Australian cities and plans to boost that to about 55 services within two years. It also expects to put new Airbus A330s onto its four Australian destinations by the end of the year.
The 'Canton route' is China Southern's route between Australia and London via Guangzhou, launched as an alternative to existing Europe options. It matters because it gives Australians another routing to Europe, particularly if stopover and visa issues are eased.
A key barrier has been a $98 one‑entry tourist visa required for stopovers in Guangzhou. China Southern expects local authorities to introduce a 72‑hour visa‑free policy similar to Beijing and Shanghai, which could make stopovers via Guangzhou more attractive.
Yes — China Southern has been eager to form an alliance with an Australian carrier. However, Qantas has existing code‑share agreements and a joint venture with China Eastern, and Virgin Australia's ties with Singapore Airlines make new alliances more complicated.
Investors should monitor the timing and deployment of A380 services to Sydney, the rollout of new A330s, planned increases from 35 to about 55 weekly services, any 72‑hour visa‑free policy for Guangzhou stopovers, and moves on alliances — all of which could affect competitive dynamics and earnings for regional airlines.
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