First class faces axe at China Southern following Xi Jinping’s austerity measuresPosted: 04/2/2013 12:42 pm
Xi Jinping’s message of austerity seems to have landed at the head office of China’s biggest airline.
The CEO and President of China Southern Airlines, Tan Wangeng, is thinking drastic: the days of first class travel are over.
If the axe goes ahead, it will be highly symbolic of the leadership influence in the north, and would no doubt please Zhongnanhai. But aside from this, China Southern just hasn’t been able to make much money through first class travel.
According to CAPA, the aviation experts, by reducing or pulling all top-notch seats, China Southern can install more business class seats and get a better yield per passenger.
If all first class seats were scrapped on its aircraft, including the flagship A380, it only amounts to 116 seats being removed across the fleet.
With the number of passengers choosing the Guangzhou-based airline rising, it cannot make enough money off them fast enough.
China Southern is not the only airline reexamining its offerings. These days business is the new first, and the likes of Emirates and Lufthansa have signaled their reservations about the future of first class travel. Even Cathay Pacific said it had “no opinion” on what it would do.
CAPA sums up the dilemma for China Southern:
China Southern’s long-haul capacity is increasingly comprised of transfer traffic, including notable long-haul to long-haul connections, and not point-to-point traffic that can better sustain first class on individual routes.
With long-haul connections, eliminating first class on one route could reduce demand on the corresponding service. Isolating certain connections to have or not have first class is difficult with a relatively small long-haul fleet, as China Southern has.