African skies are no limit for airline

Purchase and links allow Hainan carrier to extend its reach

When Hainan Airlines bought a 48 percent stake in the French airline Aigle Azur Airlines in 2012, Tan Xiangdong, a member of Hainan Airlines board of directors, likened Hainan Airlines to a huge fish stirring up stagnant waters inhabited by poorly performing airlines.

"If everyone did nothing when times are hard, the water in the pool would turn increasingly bad. Hainan Airlines is acting like a fish to stir up the water so things remain dynamic."

"So even the economic environment is bad, we still need to act quickly, so we don't miss good opportunities."

Aigle Azur Airlines, whose Europe-North Africa and Europe-East Africa routes are regarded as good assets, has become the 13th airline flying under the Hainan Airlines brand.

Now the fish is stirring up more waters in Africa. It announced recently that on June 28 it will begin flights connecting Beijing and Paris, and then connect various African destinations through Aigle Azur Airlines, by sharing international flight codes.

Established in China's biggest island and southernmost province, Hainan, Hainan Airlines now flies to 90 cities across the world, via its 500 routes.

In March, the company published its annual report for last year, showing its revenue had reached 30.2 billion yuan ($4.86 billion), up by 4.7 percent compared with the corresponding period in 2012. Profit rose 9 percent to 2.1 billion yuan. The airline said it carried 26.3 million passengers during the year, 17 percent more than in 2012.

It said it will buy another 27 aircraft, including four Boeing 787s, this year.

As Chinese investment and tourism in Africa has been surging over the past few years, Hainan Airlines has bet big on the African market.

Cumulative Chinese investment in Africa was worth $21.7 billion by the end of 2012, more than three times the volume of Japanese investment, and the trade volume was more than $200 billion, government figures say.

In 2006 Hainan Airlines teamed up with Brussels Airlines to attract more Chinese passengers, and they have carried an average of more than 50,000 passengers a year to Africa.

Hainan's flights reach 17 cities in 16 African countries, including Conakry, capital of Guinea and Dakar, the capital and chief port of Senegal.

In addition to Brussels Airlines and Aigle Azur, Hainan Airlines works with other European airlines, including Corse Air International in France.

It is all part of Hainan Airlines' plans for Africa, says Luo Xianxiang, assistant manager of international business development with the airline.

"In 2012, we established Africa World Airlines in Ghana with SAS Finance Group, SSNIT and China-Africa Development Fund." AWA flies domestic routes in Ghana.

"The AWA project is the first investment of Hainan Airlines in Africa," the company says in a statement, "and Hainan is among the first Chinese airlines companies with such links."

"This targets the West African market, which is still very backward in ground transport in most areas."

Until last September, Hainan Airlines had flights linking Beijing, Abu-Dhabi and Angola but the flights have been stopped because of a lack of patronage, but the airline may resume if there is enough demand.

The airline says many of its Chinese customers flying to and from Africa work for big enterprises such as Petro China, China Road and Bridge and China Railway Group Ltd. Over the past few years these companies have needed to send hundreds of staff to Africa who are working on investment or aid projects.

Han Zhi, manager of Hainan Airlines' Code-share, Interline & International Relations, Marketing &Sales Department, says the company may not start a direct route to Africa in the coming one or two years, so linking with European airlines is crucial to expanding its presence in Africa.

"Through code sharing arrangements with many European airlines, we offer more choices for Chinese passengers, and certainly we share the economic benefits with our partners."

Wang Xiaodong, general manager of Brussels Airlines, GSA China, says China-Africa routes via Europe are not as well developed as many other routes, but they have good potential.

"Hainan Airlines and Brussels Airlines have different strengths," Wang says. "Hainan is good at attracting passengers from the Chinese market, while Brussels is traditionally strong in the Africa market."

Wang is also the general manager of South Africa Airlines, Beijing office. The airlines opened a direct flight from Beijing to Johannesburg in January, 2012. It has attracted many passengers flying to southern and western Africa.

Brussels Airlines was known as SNBA and changed its name to Brussels Airlines when it bought Virgin Express in November 2006. It started flying to Africa in the 1920s and now flies to 30 destinations there. It became a member of the Star Alliance in 2009.

Since last year, Hainan Airlines and Brussels Airlines have been jointly promoting the African routes.

Wang says: "Competition between European airlines is now intensive, and by partnering with China airlines we can reduce costs and make the best use of our advantages in Africa. We have been talking with Hainan Airlines about sharing more international codes so we can take advantage of more opportunities in Africa."

Traditionally, Brussels Airlines is strong in French-speaking areas in Western and Central Africa, and South Africa Airlines is strong in southern and western Africa, Wang says.

Bah Thierno Maadjou, counselor of the Guinea embassy in Beijing, says air transport between China and Africa still needs a lot of improvement.

"In Guinea 80 percent of businessmen trade with China, and they frequently fly between Guinea and Beijing or Guangzhou to place orders," he says. "But they need to make transits once or twice in Addis Ababa, in Dubai or in Paris. If there were more choices and transit times were shorter, it will certainly help China-Africa business.

"When we take French airlines, we need a visa very time we transit in Paris. I wish Chinese airlines could open more routes, preferably direct flights, to Africa, so we can bypass this hassle."

(China Daily Africa Weekly 04/04/2014 page20)