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Zoedyn
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CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 8:04 am

Per Air China’s Weibo account (https://m.weibo.cn/1686727842/4326113172294711), the airline announced today on Jan 8th that it will suspend its PVG-SYD/MEL service on Mar 28th/29th respectively, citing network and capacity issues

Currently, CA runs a total of 7 intercontinental longhauls from Shanghai, ie, PVG-CDG/FRA/MUC/MXP/BCN/SYD/MEL, of which MUC/MXP/BCN are solely flown by CA on the Chinese side while operating trunk routes PVG-CDG/FRA alongside MU

The fact that CA got such a number of longhaul routes in Shanghai is extremely unusual given PVG got China Eastern Airlines as the dominant hub carrier, esp under China’s “One Route One Carrier” policy, even allowing for some historical legacy CA got in Shanghai due to a major overhaul of Chinese aviation in early 2000s

Because clearly MU, along with CZ, has long been blocked to open intercontinental longhauls from PEK, CA's hub, yet CA has been allowed to operate a considerable intercontinental network of popular routes directly from MU’s home hub. This is of course grossly unfair and deeply revealing of the playbook by the “flag carrier” backed by certain forces

It should be noted dropping SYD/MEL doesn’t mean CA would weaken its ops/market share in Shanghai in any way

Domestically, CA is highly likely to get a lion’s market share (a position currently taken by MU) on China’s top cash-cow route PEK-SHA following Daxing’s opening, as CA’s hub at PEK has a clear edge over MU’s upcoming hub at ZBAD in attracting premium business traffic btwn China's two largest metropolises Beijing and Shanghai simply because of PEK’s geographic proximity to downtown Beijing in the north that features premium-heavy traffic

Internationally, due to CAAC’s recent laxation of “One Route One Carrier” policy (See: viewtopic.php?f=3&t=1394075), Shanghai, like Beijing, is also going to open quite a few trunk longhauls to the entry of additional Chinese carriers. CA should have a good chance to further tap Shanghai’s long-haul market by adding, say, PVG-LON in the short term, and further adding, say, PVG-NYC/LAX if China-US bilateral expands in the future

Also noteworthy PVG's multi-billion satellite terminals (S1 + S2) , claiming to be the world's largest of its kind with a total of 83 gates under construction now, are reportedly scheduled for completion and opening by the end of this year, plus the opening of 5th rwy to commercial ops, which surely promises growth opportunities for all airlines with an eye on Shanghai

Current CA route network in Shanghai
Image
Map via VariFlight
Last edited by Zoedyn on Tue Jan 08, 2019 8:08 am, edited 1 time in total.
 
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SQ789
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 8:05 am

It appears that QF and MU also operate these Aussie routes as well.
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clrd4t8koff
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 8:28 am

Who does CA get favored like this whereas MU & CZ don’t get any love in return?
 
smi0006
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 8:56 am

SQ789 wrote:
It appears that QF and MU also operate these Aussie routes as well.


I believe QF has a JV with both MU and CZ, and HU owns part of VA.

Tough for CA to find feed beyond low yield at the AU end?

I do think it’s tome for CA to have a brand refresh, all three Chinese majors need a serious brand overhaul. From a networks perspective how much are they simple three brands of the CAAC anyway? All money ends up on the same pocket, and is profit a key driver?
 
royroy
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 9:57 am

I wonder if the authorities will allow another airline to operate MAN considering CA hold the rights and have so far refused to start the service
 
SeanM1997
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 10:18 am

royroy wrote:
I wonder if the authorities will allow another airline to operate MAN considering CA hold the rights and have so far refused to start the service


I'm hoping for a use them or lose them type of deal for rights to destinations. The problem with Manchester is confidence. Hainan started Manchester-Beijing 4x weekly, increased to daily but in S19 it will only operate 3x weekly. Hainan also applied for rights to start a new Guangzhou service in December and that never materialized. Manchester need to attract more passengers onto the existing Beijing service before a Shanghai route will have confidence to open up in my opinion. How they do that is difficult
 
workhorse
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 10:20 am

Personal rant: for me, the Air China's PVG-CDG flight is a complete waste of airplane and slots. Why can't they make it an evening arrival to CDG, late night departure from CDG and afternoon return to PVG?

It's not like they need it for connections, they can (and do) connect their pax through PEK and CTU. And for an O&D flight, the vast majority of passengers prefer to arrive in the afternoon/evening rather than at 5am!
 
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LAX772LR
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 10:51 am

Zoedyn wrote:
Because clearly MU, along with CZ, has long been blocked to open intercontinental longhauls from PEK, CA's hub

For the most part, yes; though are are some exceptions, most notably CZ's PEK-AMS.
I myself, suspect a more prosaic motive... ~Thranduil
 
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RyanairGuru
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Tue Jan 08, 2019 11:43 am

smi0006 wrote:
SQ789 wrote:
It appears that QF and MU also operate these Aussie routes as well.


I believe QF has a JV with both MU and CZ, and HU owns part of VA.

Tough for CA to find feed beyond low yield at the AU end?


QF only have a joint venture with MU, but do have a codeshare agreement with CZ as well.

In the PVG-Australia market CA really were an irrelevant afterthought so they are much better off focusing on PEK. CA flew PVG-SYD 3x weekly compared to 17-21 weekly for MU-QF (7x QF + 10-14x MU). MU is 10-14x PVG-MEL as well, compared to 4x CA.
Worked Hard, Flew Right
 
User001
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Wed Jan 09, 2019 7:19 am

SeanM1997 wrote:
Hainan started Manchester-Beijing 4x weekly, increased to daily but in S19 it will only operate 3x weekly


HU remains 4 weekly next summer at MAN.
 
mrwhistler
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Wed Jan 09, 2019 7:27 am

Zoedyn wrote:
Also noteworthy PVG's multi-billion satellite terminals (S1 + S2) , claiming to be the world's largest of its kind with a total of 83 gates under construction now, are reportedly scheduled for completion and opening by the end of this year, plus the opening of 5th rwy to commercial ops, which surely promises growth opportunities for all airlines with an eye on Shanghai


Any idea who will be assigned to the satellite terminals? I assume MU? Are there any plans to rehab T1? It is getting pretty long in the tooth and could definitely use a refresh. Will it then be possible to fully transit from T1 to S1/2 to T2 after the opening of the satellite terminals? Both T1 and T2 feel not particularly premium which is odd given that PVG no doubt is the most lucrative international airport in China.
 
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Zoedyn
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Re: CA suspends PVG-SYD/MEL; A look at Air China in Shanghai

Fri Jan 11, 2019 5:19 am

So, CA chose to ramp up its Australian service at PEK instead

CA will increase PEK-SYD from Mar 31 from 5 to 7 weekly for Northern summer season this year
https://www.routesonline.com/news/38/ai ... e-in-ns19/

Also an interesting development following CA's cancellation of PVG-SYS/MEL: CZ is considering picking them up according to an internal material of the carrier circulated on Chinese social media

Will CZ apply to CAAC for traffic rights on the two routes? (CZ currently runs no intercontinental longhaul in Shanghai)
How will MU/FM respond?

We'll see

clrd4t8koff wrote:
Who does CA get favored like this whereas MU & CZ don’t get any love in return?


Well, the only plausible explanation is the presence of an invisible toxic force in Chinese aviation that must be wiped off for the establishment of a level-playing field in which airlines compete on strengthen of their management/products rather than having some black sheep play dirty hand under the cover of "flag carrier" at the cost of other airlines' legitimate interests


SeanM1997 wrote:
royroy wrote:
I wonder if the authorities will allow another airline to operate MAN considering CA hold the rights and have so far refused to start the service


I'm hoping for a use them or lose them type of deal for rights to destinations.


Exactly. CAAC has now tightened regulation concerning the use of int'l traffic rights Chinese airlines have gained from the agency with the rollout of a dedicated directive in that respect last year (See: http://www.caac.gov.cn/XXGK/XXGK/ZFGW/2 ... 036835.pdf)

Per the stipulation, a Chinese airline is given one year's time at most for preps to start a flight after it got route authority from CAAC, with a further 3 months' grace period given via application. So altogether 15 months given for a new flight to take off, otherwise the airline will lose the rights (barring the case of delays caused by irresistible external force at no fault of the airline itself)

Back to PVG-MAN that CA applied for in late 2015, and it didn't happen in the past 3 years, hence good reason to believe CA long lost the route authority under the new rule. Meaning any other airlines could apply for it again if they want to

mrwhistler wrote:
Any idea who will be assigned to the satellite terminals? I assume MU? Are there any plans to rehab T1? It is getting pretty long in the tooth and could definitely use a refresh. Will it then be possible to fully transit from T1 to S1/2 to T2 after the opening of the satellite terminals? Both T1 and T2 feel not particularly premium which is odd given that PVG no doubt is the most lucrative international airport in China.


As per a brief by Shanghai Airport Authority (http://www.shanghaiairport.com/Wap/Phon ... =280139863), PVG's newest satellite terminals will accommodate 38M pax in the initial stage, connected with an underground people mover to T1 and T2, with S1/T1 for MU, FM and SkyTeam, while S2/T2 for SA carriers (No mention about OW airlines)

Image
Via Shanghai Airport Authority

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