Flight discounts in free-fall in China?
Trip Start
Jan 30, 2007
1
70
634
Trip End
Dec 31, 2011
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Guangzhou,
China
Sunday, July 6, 2008
Not so, it seems.
When I checked yesterday, it was possible to get air tickets within China for up to 70% discount. That's huge, considering that this time last year it was damn hard to find flights and seats, let alone discounts.
Here's a piece from the News:
The Week in Review: China's Air Industry Faces Global Economics Challenge
By Gary Bowerman, on Sunday, 06 July 2008
Published in : The News, News July 2008
"Shanghai air fares are at their lowest levels for five years." This quote from a well-placed source is surprising for two reasons. Firstly, oil price rises are sending global airlines into meltdown. Cathay Pacific is the latest to issue a profits warning, and Chinese airlines are among those to have announced new fuel surcharges in their pricing mechanisms. Carriers worldwide are very aware that passing on increased fuel prices to passengers will simply slash demand, but have very little leeway as operating costs are pushing many of them close to the brink. The current result is airlines are slashing long-haul flights and offering cut-price deals on routes (especially from China) that they believe will be profitable in the longer term.
The second surprise factor is that projections earlier this year suggested the Beijing Olympics would galvanise China's travel and tourism industry - notably increasing the demand for, and, therefore, the pricing of, hotel rooms and air tickets. It simply hasn't happened. International travel demand to China is weakening, and not just because of the new visa restrictions. A frail U.S. dollar has decimated America's outbound travel industry this summer, and economic loom in Europe is also affecting long-haul travel. China is currently feeling the pinch of cyclical global economics, and not thesuperficial Olympic tourism boost that was so widely predicted.
As Giovanni Bisignani, IATA's Director General and CEO, said this week, "The high price of oil is re-shaping the industry. The major shifts in [air] traffic flows experienced during May reflect this." His comments followed new figures showing that international air cargo and passenger travel demand in May were significantly down year onyear.
The air cargo dip is a genuine concern for manufacturing-focused economies, like China. "Air cargo demand is considerably down from the 4.3 per cent recorded for the full year 2007," IATA says. "The biggest cause of the slow growth came from a 0.5 per cent contraction in Asian carrier traffic. This resulted from the impact of the earthquake in China and weakness in the Japanese economy."
