Report by : Gan Yung Chyan
/ KUCINTA SETIA
After serving Changi Airport for less than two years, Hebei Airlines announced that it has suspended its flights from Shijiazhuang via Hangzhou to Singapore from 21 May 2019. The airline is refunding affected passengers.
Regarding the reason for the suspension, the relevant person in charge of Hebei Airlines said in an interview with the reporter that “it is a normal business operation”. However, some insiders analyzed that from the general situation of the industry, the grounding is mostly related to the lack of transportation capacity of the airline, the limited demand of the second and third-tier cities for flights to Singapore, and the adjustment of subsidy policies. Considering that Hebei Airlines will settle in Beijing Daxing International Airport (hereinafter referred to as “Daxing”) and introduce international and domestic flights from Daxing, re-calling some of the routes to replenish the capacity, is likely to be a major cause.
Hebei Airlines first launched its flight to Singapore Changi on 29 October 2017 via Hangzhou. This is the second international route opened by the airline after the launch of the Shijiazhuang-Bangkok Suvarnabhumi route in March 2017.
According to statistics, the number of tourists visiting mainland China from Singapore last year has exceeded 3.41 million, an increase of 6 per cent year-on-year, ranking first in the country of origin. Lin Zhenjie, managing director of the aviation business development of Singapore Changi Airport Group, also said that China's second- and third-tier cities have great potential. As a result, Hebei Airlines’ “sudden” flight withdrawal decision has caused concern.
According to Hebei Airlines' plan, before 30 September 2019, it will take the lead in the airline operations at Daxing Airport. In the future, operating in Beijing and Shijiazhuang will result in insufficient capacity of the company. In addition, the company's E190 aircraft is being phased out. So it is reasonable to stop flying some routes to ensure its smooth operations at Beijing's new airport.
According to the official website of Hebei Airlines, the company's fleet consists of 28 aircraft, including 20 B737-800 aircraft, 2 B737-700 aircraft, and 6 E190 aircraft. Since its establishment, Hebei Airlines has opened more than 100 routes from Shijiazhuang. It has initially built a trunk network connecting Shijiazhuang to major cities in the country. However, in view of whether the international network construction of Hebei Airlines will be affected after the grounding, industry observer Qi Qi pointed out that it is necessary to consider the comprehensive consideration of the company's operations in Daxing Airport.
In addition, some insiders pointed out that due to changes in the positioning of the Beijing-Tianjin-Hebei regional airport, Shijiazhuang's subsidy policy for international routes has not been adjusted. However, this statement has not been confirmed by Hebei Airlines.
However, industry insiders analyzed that from the overall situation of the industry, in recent years, with the rapid development of China's economy and the implementation of the “going out” strategy of many enterprises, the enthusiasm of many governments to develop aviation has stimulated demand for international flights.
Subsidies for new routes, especially international routes, are also increasing year by year, and many subsidies fall into the pockets of foreign airlines unfortunately. A widely cited data shows that in 2012 alone, 18 provinces (cities) subsidized 107 international routes operated by 63 foreign airlines, with a subsidy of more than 600 million yuan. However, from the actual operation situation, even if government subsidies are obtained, it is not easy for airlines to develop in second-tier cities, and many local governments have begun to change subsidy policies or reduce subsidy amounts, which have prompted some airlines to adjust their route strategies.
/ KUCINTA SETIA
After serving Changi Airport for less than two years, Hebei Airlines announced that it has suspended its flights from Shijiazhuang via Hangzhou to Singapore from 21 May 2019. The airline is refunding affected passengers.
Regarding the reason for the suspension, the relevant person in charge of Hebei Airlines said in an interview with the reporter that “it is a normal business operation”. However, some insiders analyzed that from the general situation of the industry, the grounding is mostly related to the lack of transportation capacity of the airline, the limited demand of the second and third-tier cities for flights to Singapore, and the adjustment of subsidy policies. Considering that Hebei Airlines will settle in Beijing Daxing International Airport (hereinafter referred to as “Daxing”) and introduce international and domestic flights from Daxing, re-calling some of the routes to replenish the capacity, is likely to be a major cause.
Hebei Airlines first launched its flight to Singapore Changi on 29 October 2017 via Hangzhou. This is the second international route opened by the airline after the launch of the Shijiazhuang-Bangkok Suvarnabhumi route in March 2017.
According to statistics, the number of tourists visiting mainland China from Singapore last year has exceeded 3.41 million, an increase of 6 per cent year-on-year, ranking first in the country of origin. Lin Zhenjie, managing director of the aviation business development of Singapore Changi Airport Group, also said that China's second- and third-tier cities have great potential. As a result, Hebei Airlines’ “sudden” flight withdrawal decision has caused concern.
According to Hebei Airlines' plan, before 30 September 2019, it will take the lead in the airline operations at Daxing Airport. In the future, operating in Beijing and Shijiazhuang will result in insufficient capacity of the company. In addition, the company's E190 aircraft is being phased out. So it is reasonable to stop flying some routes to ensure its smooth operations at Beijing's new airport.
According to the official website of Hebei Airlines, the company's fleet consists of 28 aircraft, including 20 B737-800 aircraft, 2 B737-700 aircraft, and 6 E190 aircraft. Since its establishment, Hebei Airlines has opened more than 100 routes from Shijiazhuang. It has initially built a trunk network connecting Shijiazhuang to major cities in the country. However, in view of whether the international network construction of Hebei Airlines will be affected after the grounding, industry observer Qi Qi pointed out that it is necessary to consider the comprehensive consideration of the company's operations in Daxing Airport.
In addition, some insiders pointed out that due to changes in the positioning of the Beijing-Tianjin-Hebei regional airport, Shijiazhuang's subsidy policy for international routes has not been adjusted. However, this statement has not been confirmed by Hebei Airlines.
However, industry insiders analyzed that from the overall situation of the industry, in recent years, with the rapid development of China's economy and the implementation of the “going out” strategy of many enterprises, the enthusiasm of many governments to develop aviation has stimulated demand for international flights.
Subsidies for new routes, especially international routes, are also increasing year by year, and many subsidies fall into the pockets of foreign airlines unfortunately. A widely cited data shows that in 2012 alone, 18 provinces (cities) subsidized 107 international routes operated by 63 foreign airlines, with a subsidy of more than 600 million yuan. However, from the actual operation situation, even if government subsidies are obtained, it is not easy for airlines to develop in second-tier cities, and many local governments have begun to change subsidy policies or reduce subsidy amounts, which have prompted some airlines to adjust their route strategies.
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