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SHANGHAI—China Southern Airlines Co., set to become the
first mainland carrier to fly nonstop to Taiwan, said
routing services via Hong Kong airspace will lead to
longer flights, squandered fuel and higher fares.
“It’s
unreasonable and a huge waste of resources and
passengers’ time,” chairman Liu Shaoyong, who will pilot
the first flight, said in an interview over the weekend.
“This must be changed as soon as possible.”
Fares
for Shanghai and Taipei trips will be twice the price
they could be because of the diversion, which will add
an extra 90 minutes onto the length of a flight,
according to China Southern. The services, due to start
on July 4, will have to make the detour because of
Taiwanese security concerns governing the airspace above
the 150 kilometer-wide strait.
“Nonstop
flights between the mainland and Taiwan will be very
profitable, if they can be flown direct,” said Li Lei,
an analyst at China Securities Co. in Beijing. “The fare
for the flights is international, while the distance is
domestic.”
Chinese
and Taiwanese airlines are beginning the weekend
services following the easing of a near six-decade-long
ban on direct flights. Carriers from the two sides will
each make 18 return trips a week under the deal agreed
earlier this month.
China Southern, the mainland’s largest carrier, Monday
signed an agreement in Guangzhou, where it’s based, with
China Airlines, Taiwan’s biggest carrier. The two will
cross-sell tickets and cooperate in areas including
maintenance and catering.
Taiwan’s
Defense Ministry said on May 16 that planes shouldn’t be
allowed to fly directly across the strait, as it could
reduce combat readiness and cut reaction times.
China
Southern, like carriers worldwide, is struggling to cope
with surging fuel costs. China raised the price of jet
fuel 25 percent from June 20, adding about 15 billion
yuan ($2.2 billion) a year to domestic carriers’
operating costs. Fuel will account for more than 40
percent of China Southern’s operating costs this year,
based on current fuel prices, Liu said. That compares
with 35 percent in 2007.
The
airline forecasts that a rebound in traffic in the
fourth quarter will enable it to post a full-year
profit, even amid higher fuel costs and slower travel
demand caused by surging inflation, natural disasters
and a stock-market slump.
The
carrier is also cutting services, optimizing routes and
reducing waste on flights to cut fuel usage. It has also
applied to raise surcharges on domestic routes.
“We’ll
do everything we can to pass this difficult time,” which
is the worst period for Chinese carriers since the SARS
outbreak in 2003, said Liu.
China’s
airlines need a 70-yuan increase in surcharges to offset
the increase in domestic fuel prices announced last
week, China Securities’ Li said. The government is more
likely to approve an extra 50 yuan, he added.
(Bloomberg) |
