Keeping China’s aviation industry on the fast track

To ensure that China stays on the fast track of air travel growth, continued cooperation, ongoing liberalisation and a level competitive playing field will be key

Bart Tompkins, managing director, Amadeus China

ACCORDING to IATA, 800 million additional travellers will travel by air by next year, and over a quarter (214 million) of them will be from China. This forecast comes as no shock, with such a massive and growing population of travellers in China. But what does surprise many experts is the speed at which Chinese travel is growing. Chinese travellers made 83 million overseas trips in 2012, compared to just 10 million in 2000.

Can China sustain this staggering growth rate? To ensure that China stays on its fast track, continued cooperation, ongoing liberalisation and a level competitive playing field will be key.

The power of choice

Most international airlines have known for many years that China represents a significant opportunity due to its sheer size, and that the volume of Chinese travellers going overseas will only continue to grow. The number of outbound travellers each year from China is still equivalent to only four per cent of the total population, and around 15 per cent of the total middle-class population.

International carriers have increased flight services to China, introduced Chinese language on board their aircraft, and offered Chinese meals to please the local palate ­– all in an effort to compete for a slice of the Chinese travel pie. And the Chinese travelling population has been eager to fill their seats. Amadeus research shows that Chinese travellers increasingly want to go further afield and want the freedom to book their own travel itineraries rather than following scheduled tour groups. Yet their access to international airline bookings has been somewhat restricted.

Unlike the rest of the world, GDSs have not been able to operate in China, which means that technology has not always been able to evolve in line with global standards and the industry uses a system that is relatively restricted in some areas.

This has meant that local travel consultants don’t have the option of working with a GDS like Amadeus to search flights and make reservations. They have to rely on the local provider TravelSky with often less evolved technology, which can mean travel consultants resort to time-consuming manual processes to check fares and confirm flights for their customers.

Last October, with the publication of new regulations from the Civil Aviation Administration of China, a gradual change is due to take place. For the first time, foreign airlines will have the option of using GDSs to distribute their air fares to travel consultants in China.

This means GDSs like Amadeus will be able to start working with Chinese travel consultants to help them deliver better service and more travel options for Chinese travellers, and in turn help international airlines access the ever-growing Chinese travel market. This reaches beyond airlines as well, with international hotels, cruises and other travel providers also set to benefit from new Chinese bookings.

A level competitive playing field

However, while the regulations have been approved, actual implementation is not yet completed. But change is underway and it will only mean good things for the Chinese travel industry.

As Chinese airlines acquire new aircraft and provide new services to an increasing number of Chinese as well as international consumers, Chinese airlines will benefit greatly and be able to compete more effectively by using the same cutting-edge technologies that foreign airlines now use in China.

Open market access and a level competitive playing field will not only benefit new entrant GDS companies to China, but also benefit incumbent players in the market and the end result would be a much more vibrant travel distribution industry than it is today.

By Bart Tompkins, managing director, Amadeus China

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