Tourism between mainland China and Australia has been developing consistently over the last decade. CNTAA reports that arrivals from Australia to China totaled 637,300 in 2015 – ranking 13th amongst sources of inbound tourism for China. For the first 9 months of 2016, tourist arrivals from Australia were 484,600, a growth of 5.4%.
In the opposite direction, Australia posted over 20% growth in Chinese visitor arrivals in the first 10 months of 2016, reflecting the similar level of growth experienced in 2015.
Australia annual visitor arrivals from mainland China: 2008-10M2016
Source: CAPA - Centre for Aviation and OAG
This growth is by no means accidental. There has been a significant increase in the number of available seats (or capacity) between mainland China and Australia in recent years with total seats per week rising almost 25%, year on year Dec-2015 to Dec-2016.
|Airline||Week of 21-Dec-2015 seats||Week of 21-Dec-2015 percentage share||Week of 19-Dec-2016 seats||Week of 19-Dec-2016 percentage share|
|Air China||6,680 seats||19.37%||7,547 seats (12.98%)||17.58%|
|Beijing Capital Airlines||n/a||n/a||684 seats||1.59%|
|China Eastern Airlines||7,378 seats||21.39%||10,878 seats (47.44%)||25.34%|
|China Southern Airlines||15,188 seats||44.03%||16,130 seats (6.2%)||37.58%|
|Hainan Airlines||263 seats||0.76%||2,128 seats (709.13%)||4.96%|
|Jetstar Airways||670 seats||1.94%||n/a||n/a|
|Qantas Airways||1,766 seats||5.12%||1,782 seats (0.91%)||4.15%|
|Sichuan Airlines||1,365 seats||3.96%||1,345 seats (-1.47%)||3.13%|
|Xiamen Airlines||1,185 seats||3.44%||2,430 seats (105.06%)||5.66%|
|Total||34,495 seats||100%||42,924 seats (24.44%)||100%|
Source: CAPA - Centre for Aviation and OAG
China Eastern has seen the biggest increase at 47.44%, adding approximately 3,500 seats per week. Xiamen Airlines has doubled its capacity to 2,430 seats per week and new entrant Hainan Airlines has seen its capacity skyrocket from 263 to 2,128 seats per week - an increase of almost 710%.
Qantas, on the other hand, accounted for just 4% of the mainland China – Australia market in December 2016 with 1,782 seats per week down from December 2015 when the Qantas Group had a 7% share, split between 5% for Qantas and 2% for Jetstar. This will change again, however, once Qantas resumes Sydney-Beijing services in 2017 and Jetstar potentially looks to add new routes into China. Capacity between the two nations broadly follows direction of travel which is heavily tilted towards outbound Chinese tourists travelling to Australia.
2016 has seen new entrants and continued expansion and 2017 is set to bring more of the same. Apart from Qantas returning to Beijing, Virgin Australia has announced it is also planning to begin Hong Kong and Beijing services in partnership with Hainan Airlines – a product of the new significant 13% stake Hainan’s parent HNA Group has taken in Australia's second largest airline. The emergence of this HNA-Virgin force around China competes with the Qantas-China Eastern tie-up as well as China Southern Airlines - which at the peak will operate four daily flights to Sydney, including one on the A380.
China Southern dominates the market, operating a total of 16,130 seats per week, just over 37% of the 34,495 seats currently directly available between mainland China and Australia every week. Incidentally, this is separate to the seats currently available on an indirect basis between the two countries on other Asian carriers such as Cathay Pacific/Dragon and Singapore Airlines through hubs such as Hong Kong and Singapore.
2017 Outlook for Australian travellers
Given this exponential growth in flights between the two countries, a possible risk of over-capacity may start to loom. That said, the China market has a long way to go before it peaks - if it ever does.
Competition on pricing out of Australia is likely to remain robust, with Virgin Australia likely to take on its competitors heavily on price, with the financial backing of HNA, in order to penetrate the market and establish market share in a country where the Virgin brand is relatively weak. The remaining carriers will likely respond by following suit to some degree placing downward pressure on fares - all of which is good news for Australians wishing to travel to China.
So, with all these available seats, the China – Australia Year of Tourism 2017 couldn’t have come at a better time. Together with raising awareness of China as a destination within the Australian market and vice versa, the airlines will also be hoping to fill a few extra seats in the process making 2017 not only the Chinese Year of the Rooster but also the Year of the Tourist.