North America is on sale again as airlines look to sell more seats across the Pacific despite unrelenting competition from Chinese carriers

It's that time of the year again with many airlines holding further 'new year' sales to stimulate demand and fill empty seats.

The current sales in Australia / New Zealand are North America focused. A reason for this is an excess of trans-Pacific capacity. Carriers such as Qantas, American Airlines, United and Air New Zealand are looking at ways to fill their flights in the face of increasing competition, particularly from Chinese carriers.

Fares between Australia / New Zealand and North America are coming down. And, despite heavy discounting by airlines such as Air New Zealand and Qantas, Chinese airlines are now entering the one-stop market much more actively, with very low fares. Since the frequencies of Chinese carriers have increased so dramatically over the past three years - at almost 90% - they have become much more interested in carrying beyond their home market.

China to Southwest Pacific (frequencies per week, one way): 13-Jan-2014 to 26-Jun-2017

Source: CAPA - Centre for Aviation and OAG

CAPA has compared fares, including sale fares currently on offer for sale in Jan-2017 between Australia/New Zealand and North America, specifically on five city pairs:

1. Sydney to New York
2. Gold Coast to San Francisco
3. Auckland to Toronto
4. Sydney to Toronto
5. Sydney to Montreal

For all five we have chosen flights in early May-2017, traditionally a low season outside school holiday demand and covered in the majority of sale validities. In many cases the cost per km is below 7 USD cents - compared with USD2.00 per mile for a New York cab.

Sydney to New York (Departing 8 May returning 15 May-2017)

Source: Skyscanner

Despite both Air New Zealand and Qantas currently actively promoting sale fares to North America, including for travel in early May-2017, the Chinese airlines are increasingly making their presence felt on routes beyond the US West Coast.

In fact, all three of the mainland Chinese airline heavyweights, namely China Southern, Air China and China Eastern are able to undercut United, American, Virgin and Qantas - even when those airlines are on sale.

Routing through Guangzhou, Beijing or Shanghai can however increase travel time by at least 12 hours over the shortest routing available, but also means that the often-stressful LAX transit can be avoided.

Gold Coast to San Francisco (Departing 8 May returning 15 May-2017)

Source: Skyscanner

For this specific routing, Air New Zealand currently has the edge both on price and convenience. This is largely a product of the airline's "Better Way to Fly" strategy, which feeds passengers into its Auckland hub directly from cities around Australia, including secondary ports such as Gold Coast, Adelaide and Perth, connecting them onwards to the airline's direct services to the United States.

In this case, the Chinese carriers don't have an edge given they don't operate services directly from the Gold Coast to their Asia hub.

This means that, in the case China Southern, it relies on Jetstar to transfer its passengers to Sydney where they connect to a China Southern flight to Guangzhou and onwards to San Francisco. The flying time is almost triple that on Air New Zealand and Qantas though which, despite the use of an A380 on the flight to Guangzhou, reduces the China Southern value proposition compared to local carriers such as Air New Zealand and Qantas during sale time.

Auckland to Toronto (Departing 8 May returning 15 May-2017)

Source: Skyscanner

Sydney to Toronto (Departing 8 May returning 15 May-2017)

Source: Skyscanner

Sydney to Montreal (Departing 8 May returning 15 May-2017)

Source: Skyscanner

For the Auckland - Toronto fares, again, despite being 'on sale', Air New Zealand, American Airlines and United are undercut by Chinese carrier China Eastern which, while the cheapest, extends the outward journey to over 33 hours, almost double that of American Airlines.

Same goes for the Sydney - Toronto fares where China Eastern undercuts its nearest competitor, Cathay Pacific, by almost AUD300 but where the outward journey is 15 hours longer than its Hong Kong rival and 22 hours longer on the return, at 50 hours travel time.

For Sydney - Montreal, United maintains an edge, coming in slightly cheaper than Air China with an outward journey time that's almost 10 hours shorter than their Chinese competition.

To Toronto from Sydney, American arguably offers the best balance of value and convenience. For just over NZD200 more than China Eastern customers can slice almost 15 hours from the outbound journey and experience the American Airlines 787 dreamliner on the trans-Pacific flights. For the same money, United code-shares with Air New Zealand on its 787 services to Houston and connects passengers to Toronto via a further transit in Washington. Interestingly Air New Zealand, despite offering sale fares to other Canadian cities such as Vancouver, has not matched its codeshare partner United's fare on this route pricing it at almost AUD500 more.

The Chinese carriers maintain their edge which is great for competition

So, while taking advantage of sale fares offered in this region by major players such as Air New Zealand and Qantas, even when that discount is sizeable, these fares cannot always compete with those offered almost year round by the Chinese carriers. This kind of continuous competition means, however, that 'sales' such as these are likely to be around for a while, as western airlines do whatever they can to retain market share and loyalty. And that can only be good for the consumer, in the short term at least.