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TS-IOR
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Finnair "focus" On China...

Sat Jan 26, 2013 5:29 pm

Two AY destinations in China, XIY and CKG gave me the idea to start this thread ! Was also reading a thread on Sichuan and Chengdu so...

Why flying to these almost unknown cities and why being AFAIK the unique European airline to serve them ? What is the market profile, importance for One World...
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Flighty
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RE: Finnair "focus" On China...

Sat Jan 26, 2013 5:42 pm

Xian and Chongqing are roughly equivalent to China's Denver and Chicago... They are not unknown cities. They may not be global cities now, but AY has long had a business of providing unique links between Europe and Asia. So Finnair is pioneering these routes. But as China develops, these cities will be necessary business and tourism cities of the rich world.
 
LAXintl
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RE: Finnair "focus" On China...

Sat Jan 26, 2013 5:47 pm

Actually these places are not unknown especially in the business world.

The Chinese industrial machine is shifting away from the Coast and going inland as part of what is called "Go West" policy in China that is creating a boom in already large cities like Chongqing (poupulation 28mil), Chengdu (14mil), Xi'an (8mil).

If you own a an iPhone it likely came from a factory in these places.

Not only is there growing air-freight demand (as witnessed by ever more foreign cargo airlines serving these points), there is growing passenger demand from both foreigners but also as locals that need to access the outside, and the growing numbers of economically more prosperous Chinese.
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b2319
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 8:40 am

Quoting LAXintl (Reply 2):
Actually these places are not unknown especially in the business world.

  

I cannot see how people would consider these cities to be 'almost unknown' by any measure. Some people will argue that Chongqing is the largest city in China; to be honest there are various methods to compare. In any case, the metropolitan area of Chongqing has a population of ~ 28.8 million people. This, if it were an individual country, would rank it at 44th in the world, between Venezuela and Saudi Arabia, hardly 'almost unknown', I think.

Also, if we are brought up to read atlasses or online maps, and not use globes, we tend to see the world as being flat. With its northern Europe location, Helsinki is in a good position to fly to many places in the northern hemisphere, distance-wise.

For example, LHR to CKG via HEL is only 34 km more than the direct route.

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AirlineCritic
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 8:48 am

Quoting b2319 (Reply 3):
Also, if we are brought up to read atlasses or online maps, and not use globes, we tend to see the world as being flat. With its northern Europe location, Helsinki is in a good position to fly to many places in the northern hemisphere, distance-wise.

For example, LHR to CKG via HEL is only 34 km more than the direct route.

Exactly.

The business idea of Finnair is to be the "Emirates" of the north, connecting Europe and Asia from a good geographical position. And as you say, there are big cities in China and elsewhere. This traffic is just going to grow. The only question is if Norwegian or others will find the same business model and do it better/cheaper than Finnair.
 
finnishway
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 9:14 am

Quoting AirlineCritic (Reply 4):
The business idea of Finnair is to be the "Emirates" of the north, connecting Europe and Asia from a good geographical position.

Why not add North America there? There could be demand for a couple more routes like LAX and MIA.

AA could actually fly ORD-HEL in the summer and MIA-HEL in the winter.

There is one big difference between Emirates and Finnair and it is costs. Finnair will not be able to operate as "cheap" as Emirates can.

Finnair also needs more planes if it wants to start many new long haul routes or then cut some routes.
 
LJ
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 11:47 am

Quoting TS-IOR (Thread starter):
Why flying to these almost unknown cities and why being AFAIK the unique European airline to serve them ?

Because there is demand and less to no competition. Hence why KL started Xiamen and was the sole airline on Europe - Chengdu (though KL started Chegdu to gain access to Shanghai). Furthermore, AFAIK the Chinese governement stimulates these destinations.

Quoting AirlineCritic (Reply 4):
The only question is if Norwegian or others will find the same business model and do it better/cheaper than Finnair.

Norwegian is not a threath for AY's Chinese destnations, but from other European/Chinese airlines and the Middle Eastern airlines. Look at what happens with Chengdu. KL has been the sole airline linking CTU and Europe. Nowadays EY and QR have entered the market and CA and BA will follow in S13. The same will probably happen with CKG, which has already many cargo only links with Europe.

[Edited 2013-01-27 03:53:44]
 
finnishway
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 12:06 pm

Quoting LJ (Reply 6):
Norwegian is not a threath for AY's Chinese destnations

It will be if they start long haul flights from Helsinki, though it is not very likely for now.

It is also interesting to see can Finnair compete with other European airlines if/when they start competing routes.

[Edited 2013-01-27 04:07:20]

[Edited 2013-01-27 04:07:44]
 
bogoss
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 12:46 pm

Quoting finnishway (Reply 7):
It is also interesting to see can Finnair compete with other European airlines if/when they start competing routes.

I'd hope AY can make XIY last first, it's a brave take I must say, the city has a lot to offer as a tourist destination but it's rarely a sole destination in China for the most, AY's role here is to be an alternative gateway which means it's somehow competing with PEK and PVG. Also in comparising to CTU or CKG, its business connections with the outside world are relatively weak, as well as the demand for the locals to go abroad...

I wish AY good luck anyhow, and why hasn't it resumed CAN if it can start XIY, HKG again?
 
KFlyer
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 1:13 pm

Simply put, AY is trying to take the 'first mover' advantage. This helps them establish themselves as the go to airline for the Chinese when flying to Europe. Plus it is less risky than flying to a point in US which is over-crowded. In opening up these markets, you define the yield level - if the demand is sufficient. And most of the Chinese second tier airports now have attractive incentive schemes too.

As for CAN - everyone flies there now and you'll be forced to fight for a share by undercutting.
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bogoss
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 1:35 pm

Quoting KFlyer (Reply 9):
Simply put, AY is trying to take the 'first mover' advantage.

AY is hardly the "first mover" in the secondary Chinese cities, KL, as mentioned, started their adventure in 2006 to CTU, then HGH in 2010 and XMN in 2011, both were earlier than AY's CKG, so were LH's NKG, TAO and SHE actually... AY started CKG last year and XIY will be this summer, by then, most of the secondary cities will have 1 or 2 connections to Europe already.

Quoting KFlyer (Reply 9):
As for CAN - everyone flies there now

And for CAN, its European connection isn't really covered by "everyone" yet. CZ does AMS and LHR, AF does CDG, TK to IST, EK QR connect from the gulf, that's merely it if I don't miss anyone... Besides its higher frequency, CTU will have almost the same coverage by this summer, but CAN, as far as we know, is a much larger market and sometimes it gets mentioned together with PEK and PVG, and of course, not really has it been to that level.
 
finnishway
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 1:47 pm

Why AY should fly to CAN? They already fly to HKG which is not too far from Guangzhou.
AY simply hasn't got planes enough or then they need to cut a route or two.
 
b2319
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RE: Finnair "focus" On China...

Sun Jan 27, 2013 1:52 pm

Regarding CAN, my personal views:

CAN, in my opinion, suffers from being, in China terms, close to Hong Kong. Truth be told, and despite the efforts of the Chinese government to 'clampdown', there is still a grey market for certain visas in China. There's a perception that the ability to obtain an F visa for mainland China is easier than in Hong Kong versus elsewhere. Note the highlighting of "perception".

Now, if I am going to Guangdong province and there's a doubt regarding my visa that could be lessened via Hong Kong, that's maybe a reason, at least initially, to route myself through Hong Kong.

Just my thoughts on one reason why CAN (and SZX/ZUH) aren't as popular as they might be.....

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RE: Finnair "focus" On China...

Sun Jan 27, 2013 2:11 pm

Finnair do both CAn and HKG because the demand is heavy, AF also do both, as ET, KY. One significant benefit of going into Western China for AY is it only need one aircraft to do a roundtrip, instead of 2 if the route is from Western Europe to CAN and HKG with 9 hours layover in both ends.

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