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Airlines hold status quo before railway launch


25-May-2011 - Global Times
Domestic airlines aren't changing anything for the Beijing-Shanghai high-speed railway.
"We're not planning on reducing flights so far," China Eastern press officer Zhang Ming told the Global Times Tuesday.
As the biggest carrier with 55 daily flights including through its subsidiary Shanghai Airlines, China Eastern denied any changes ahead of the rival railway launch.
A standard flight still costs 1,130 yuan ($174) and the occupancy rate of China Eastern's most profitable route remains at about 85 percent.
High-speed railway tickets are predicted to cost about 600 yuan, according to the Shanghai Morning Post Tuesday.
"Most passengers on our Beijing-Shanghai route are business travelers who are not very sensitive to prices," Zhang said.
High-speed railway need not always be seen as a threat, Zhang argued.
"High-speed railway is a challenge for us," he said, "but it also brings us more potential customers as more people in the Yangtze River Delta will be brought to the Hongqiao railway station, which is close to the Hongqiao airport."
None of the other carriers on the route including Air China have announced changes to their flights or prices so far.
"Carriers will definitely change their strategies," a transport industry analyst with Orient Securities, who declined to be named, told the Global Times Tuesday.
Airline companies must maintain a 75 percent occupancy rate to stay profitable, he explained.
"What they are likely to do is reschedule their flights, move the ones that overlap with high-speed trains to another time period of the day," he said.
25-May-2011 - Global Times

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