The SkyTeam alliance formally accepted Taiwan's China Airlines into the fold, with one eye on increasing its presence - especially in the front end of the cabin - in the greater China market.
The combined network of China Eastern Airlines and China Southern Airlines - both SkyTeam members - and China Airlines gives the alliance access to 20 major destinations in China on cross-straits routes from the respective hubs of Shanghai, Guangzhou and Taipei. This gives SkyTeam the biggest market share in the region of all three alliances.
RAMPING UP FLIGHTS
"Thanks to excellent links to a number of existing SkyTeam hubs, China Airlines' membership adds value to the alliance for both passengers and cargo customers," says Leo van Wijk, SkyTeam's chairman. The Taiwanese carrier has been ramping up cross-straits operations since it was liberalised two years ago, and will add more services in the coming months, together with its subsidiary Mandarin Airlines.
During China Airlines' official accession ceremony in September, executives from China Eastern and China Southern reiterated plans to add services and further co-operation with China Airlines As a result, Taiwan's government says the number of direct cross-straits flights is expected to reach 558 per week in October, as new services and additional frequencies come on stream.
Joining SkyTeam is also expected to add New Taiwan dollar (NT$) 1 billion ($33 million) to NT$2 billion in revenue by next year, says China Airlines president Huang-Hsiang Sun. He also predicts that the airline's costs will fall by 1% next year.
"We have seen that joining SkyTeam can benefit an air carrier's yearly revenue by 17%, while we conservatively estimate a NT$1 billion contribution for next year - the company's first full year in the alliance," he adds.
China Airlines also plans to join the SkyTeam cargo alliance, which it hopes will mitigate what could be a slower-than-expected fourth quarter for the market.
"The fourth quarter used to be the traditional hot season for cargo business, but the global economic slowdown shrunk the demand," says China Airlines chairman Chia-Juch Chang.
The Taiwanese carrier also plans to increase its presence in the passenger and cargo markets in other parts of Asia, especially given the poor economic outlook for the USA and Europe.
Source: Airline Business
