CA pulls out of PVG to MEL/SYD

[Melburnian1]

The good website Routes Online informs that effective 31 March 2019, CA of mainland China is ceasing its six weekly flight to SYD and four to MEL.

MU probably dominates on these routes, and QF would be third in market share of the nonstop operators - QF only flies PVG - SYD, not MEL. CX may also carry quite a few PVG - MEL/SYD passengers but via HKG.

Does this decision by CA reflect declining demand, or is it symptomatic as to how the mainland Chinese government has historically preferred just one of the big three mainland Chinese airlines to operate ecah route?

Or is there something else behind this?

 

[moa999]

Interesting. Particularly as China is reportedly getting rid of the one route one carrier rule.

Maybe they've just decided to reallocate to other routes

 

[MEL_Traveller]

Wow. That's disappointing CA is my preferred carrier to PVG.

I was wondering how this might affect their bookings to Europe and USA - but I think most of those route via PEK.

 

[yohy?!]

Discretionary spending is falling in a big way in China also - see collapsing smartphone and new car sales for an indication.

Some China based economists calculating the PRC is already in recession.

 

[Melburnian1]

Discretionary spending is falling in a big way in China also - see collapsing smartphone and new car sales for an indication.

Some China based economists calculating the PRC is already in recession.

yohy?!, forgive me for sort of going OT slightly, but in your view are many of those state-owned enterprises profitable or losing money hand over first, and does it tend to vary by industry sector and/or size? Will these haunt the mainland Chinese economy or are Westerners who write about the SOEs exaggerating the situation? Are the mainland Chinese banks financially supportive of these companies or in some cases are they pulling, or about to pull, the pin?

 

[yohy?!]

yes the SOEs are a big problem, they are generally unproductive / unprofitable (although not always the case depending on industry and location) & hold vast amounds of corporate debt which China is trying to deleverage.

the government has been directing the majority of bank lending to SOEs in a bid to avoid failures that could cause large numbers of retrenchments and unrest.

the china growth miracle was powered by private enterprise growth and capitalism being allowed to operate and flourish - that is now being reversed with the further reforms needed for future growth not being taken in favour of stimulus and tighter control - some are even talking about private companies disappearing altogether in favour of SOEs.

 

[wannabeinvestmentbanker]

I think CA is a government/corporate airline and the vast majority of growth in travel is from the burgeoning middle class who don't care what airline they fly and are very price sensitive so willing to fly these secondary airlines where group travel can be negotiated.

Do we have any idea on loads on CA for the last year or more?

 

[Melburnian1]

I think CA is a government/corporate airline and the vast majority of growth in travel is from the burgeoning middle class who don't care what airline they fly and are very price sensitive so willing to fly these secondary airlines where group travel can be negotiated.

Do we have any idea on loads on CA for the last year or more?

BITRE publishes annual and monthly figures.

The most recent is or September 2018. Outbound from Oz, CA had an 81.9 percentage seat occupancy while inbound from mainland China, it was lower at 72.6 per cent.

However that's an all routes figure, and more importantly does not disclose the all important yield per seat that as you point out may well be very low.

I note PR was selling, until two days ago, return fares including luggage and meals MEL - PEK via MNL for as low as A$429 (including the A$60 departure and other taxes), so while not all seats will be priced as low, it gives an idea of the competition on the mainland China routes.

 

[wannabeinvestmentbanker]

It really doesn't seem to be a profitable route at all for any airlines. China is consistently the cheapest Asian destination on QF, CX, PR and even SQ price very well from Australia let alone direct flights where they now compete intensely with Xiamen, CZ, MU, Shenzhen, Capital Airlines etc... Routes to Europe, North America and Africa must have superior yields and I suggest they are simply adapting to the market.

 

[MEL_Traveller]

However that's an all routes figure, and more importantly does not disclose the all important yield per seat that as you point out may well be very low.

CA is currently selling economy AU-urope for as little as AUD859 return. And they're marketing that alongside their new A359. So it's a pretty awesome deal for full service. I suspect that barely breaks even. Those flights are via PEK though.

Their business class fares are not as competitive, and often seem full, especially when trade missions are in swing.

 

[Mattg]

CA is currently selling economy AU-urope for as little as AUD859 return. And they're marketing that alongside their new A359. So it's a pretty awesome deal for full service. I suspect that barely breaks even. Those flights are via PEK though.

Their business class fares are not as competitive, and often seem full, especially when trade missions are in swing.

I've just booked return flights with Air China from MUC to SYD and, of course, the only options were via PEK. The layovers in PEK are very long (21 hours on the way back ) but for $2,700 return in J during peak season, I don't mind too much.

 

[Cruiser Elite]

Wow. That's disappointing CA is my preferred carrier to PVG

Are you serious MEL? It is a dog of an experience!

 

[MEL_Traveller]

I've just booked return flights with Air China from MUC to SYD and, of course, the only options were via PEK. The layovers in PEK are very long (21 hours on the way back ) but for $2,700 return in J during peak season, I don't mind too much.

That was a good fare. There were some really bad connections though - ex DUS it was 20 hours in PEK on the way to AKL. IIRC out of FRA was better for connections (but some still 6+ hours)

Are you serious MEL? It is a dog of an experience!

But you look for different things CE Air China's A330 beds are notably long, have no cubbies for your feet, and good padding. And non-stop flights that allow a good 7-8 hours of sleep. While the soft product offerings are not the same as SQ, the service is pretty hard to complain about. Always been exemplary. Although I guess that might come down to how well a passenger can relate to the crew.

 

[Cruiser Elite]

But you look for different things CE Air China's A330 beds are notably long, have no cubbies for your feet, and good padding. And non-stop flights that allow a good 7-8 hours of sleep. While the soft product offerings are not the same as SQ, the service is pretty hard to complain about. Always been exemplary. Although I guess that might come down to how well a passenger can relate to the crew.

Damn right I do - I look for a quality experience. I found nothing comfortable about the bed at all - I tried to sleep but couldn't. Champs / wine / spirits offerings disgraceful - food OK but it did come out of MEL kitchen - never any dispute about crew on any Chinese carrier - they bend over backwards to try to assist - but overall CA exp would seriously want to be cheap - indeed much cheaper than it has been.

I hate to see any carrier discontinue services on any route as it simply lessens capacity which lessens potential competition for bums on seats - but that is all i will miss.

 

[jase05]

I still can’t fathom how any of these airlines make money on many these routes. Fares to China are insanely cheap with most coming in at under $500 return from the East Coast for Y. Hainan quite often has flights for under $400 return.
My parents have just booked their 5th trip to China in the last 12 months, 7 nights for $699 ex Sydney including flights, accomodation, transfers plus 1 internal flight in China. Little wonder they travel to China more than they come and visit me in Adelaide

 

[MEL_Traveller]

I found nothing comfortable about the bed at all - I tried to sleep but couldn't.

But you have said you don't sleep on day flights, so perhaps not surprising you didn't get a good sleep?

 

[Cruiser Elite]

But you have said you don't sleep on day flights, so perhaps not surprising you didn't get a good sleep?

Why would anybody sleep on day flights? You do know that one day you are going to sleep forever? Can't imagine missing even one minute of this precious life because I slept on a daytime flight - well until the Champs kicks in and you slide off into that totally Champagne induced slumber - but that is never going to happen on CA with 2 botts to share with 20 pax in J - DISGRACEFUL!

 

[MEL_Traveller]

I still can’t fathom how any of these airlines make money on many these routes. Fares to China are insanely cheap with most coming in at under $500 return from the East Coast for Y. Hainan quite often has flights for under $400 return.
My parents have just booked their 5th trip to China in the last 12 months, 7 nights for $699 ex Sydney including flights, accomodation, transfers plus 1 internal flight in China. Little wonder they travel to China more than they come and visit me in Adelaide

There was an article recently about the costs of flying different planes on different routes. I can't seem to find it now (thought it was linked here on AFF). SYD-MEL was about $10,000 including fuel, staff other costs. Lng haul flights were slightly cheaper per hour based on the economies of scale. Economy pays for the fuel. Premium cabins give something towards profit.

 

[MEL_Traveller]

Why would anybody sleep on day flights?

Some people have things to do on arrival. (I'd much rather having a fantastic night out than going to the hotel to sleep.)

 

[Cruiser Elite]

Some people have things to do on arrival. (I'd much rather having a fantastic night out than going to the hotel to sleep.)

Don't ever assume those that play during the day can't continue to play on and on MEL - some people do have stamina.

And what time does CA718 arr PVG? 19:25 if ever on time - more likely 20:00 or later - collect your luggage and 1hr into to city ctr - miracle if you are in hotel by 21:00 - then you need shower and get likkety split to head out - all of a sudden you big night out is getting kinda late to start - much better alternatives with much more civilised arr times into PVG than CA