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China Southern trading premium margins for UK market share

China Southern Airlines will not be actively marketing its premium-economy cabin when it opens a new route to Wuhan from London this month.

The SkyTeam carrier is planning to use Airbus A330-200s on the route from London Heathrow.

But while the three-class layout includes a premium-economy section, UK commercial manager Nick Newman says the carrier will effectively be selling the seats under economy-class fares.

Speaking during a briefing in London on 2 May, Newman said the primary reason for this decision relates to the absence of a premium-economy cabin on board onward connections, particularly to Australia.

This means London-Australia passengers face a disconnect in the service level.

But Newman also admits that the carrier's premium-economy product is fairly basic and that there is insufficient justification for charging the higher fare when China Southern is prioritising a strategy of market-share gain in the UK.

"The focus is to get into the market," says Newman, and this means the carrier is prepared to sacrifice margins on the premium-economy cabin, and keep fare levels down, in order to attract greater custom.

China Southern will commence Wuhan flights on 30 May and is looking at opening a Sanya route from Heathrow. The carrier is also considering a Beijing-London service once the new Beijing airport opens next year.

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