Michael Boyd, President Boyd Group International.
“It’s the Chinese consumer, and the current lack of full-connecting hub operations involving US airlines and Chinese partners, that will restrict US carriers to nonstops to only the very largest commercial markets in China”, says Michael Boyd.
Boyd Group International President says that he contentions in Mr. Mitchell's article regarding Chinese carriers forcing US airlines out of China, based only on statistics of numbers of flights operated, display a woeful lack of understanding of the Chinese air transportation system.
"The foundational reasons for Chinese airlines dominating the China US market have zero to do with any government subsidies. They are due to structural and consumer factors pertinent to the China market.
Boyd Group International is heavily focused on this sector, and the reasons for Chinese airline dominance is based on market and consumer factors specific to the very different Chinese air transportation system structure.
Mr. Mitchell is obviously unaware that the majority of US-China trip originations are in China, not the US. He is also unaware that China does not have US-style connecting-hub operations at any major airport. Therefore, traffic that can be generated from secondary cities, for example Hangzhou, is local O&D, and US carriers do not have the brand identity to capture Chinese consumer market share, even with large connecting hubs in the US to distribute the traffic. This is the reason United failed in the Hangzhou-SFO market – not government subsidies.
A recent example of the Chinese consumer advantage – not "subsidies" – is Fuzhou-JFK. Xiamen Airlines started nonstops last year, and local O&D went from an estimated 3,500 to over 73,000, with an 85% load factor. A US carrier, with low brand identity and marketing reach in Fujian Province, could not develop this almost entirely point-to-point route. This is the case with most such airports in China.
Point: Mr. Mitchell's contention that it is government subsidies that are the reason for Chinese carrier growth at the alleged expense of US airlines is bogus. The inability of US carriers to effectively penetrate huge markets such as Changsha, Kunming, Zhengzhou and others is because the majority of these markets are China-originated and all only supportable to points in the US with very strong point-to-point O&D.
It's the Chinese consumer, and the current lack of full-connecting hub operations involving US airlines and Chinese partners, that will restrict US carriers to nonstops to only the very largest commercial markets in China."
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales.
She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
