Tuesday, August 30, 2016

YVR's Asia strategy adds record number of Chinese airlines


YVR's Asia strategy adds record number of Chinese airlines



Carl Jones is the director of air service 

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It is hard to miss the rapid rise in the number of direct flights linking Vancouver to international destinations, particularly China, in the last year. It’s as much a reflection of strategy as market demand.
The latest announcement came last Tuesday, when Chinese officials said in Vancouver that YVR will get a direct flight to the central shipping hub of Zhengzhou starting in November.
YVR has since confirmed the route will be flown by Sichuan Airlines, which is already making thrice-weekly flights from Chengdu (in western China) to Vancouver through Shenyang. Now, two of those flights will fly through Zhengzhou to reach Chengdu starting Nov. 1, while one flight will remain on the YVR-Shenyang-Chengdu route.
Beijing Capital Airlines said earlier this month it will begin flying between Vancouver and Hangzhou (site of this year’s G20 summit in September) on Dec. 30. And earlier this year, XiamenAir also began direct service to YVR. In both cases, the Vancouver flights represent the carriers’ first North American route.
But while it may be easy to assume that these routes are being created due to rapidly expanding demand in China, YVR officials say it also reflects the airport’s aggressive strategy to add flights to growth markets.
“If you roll back to 20, 30 years ago, it was more about the airlines deciding where to fly,” said Carl Jones, Vancouver airport’s director of air service development. “But given the increase in the number of airlines and the increase in competition for tourism and trade, one of our team’s strategies is linking Asia to the Americas, and we have to take a proactive approach to working with not only current airlines on expanding, but also new airlines.”
The plan is to grow annual passenger numbers from the current 20 million to 25 million by 2020, and the key target markets are the two regions projected for high growth in the coming decade: Asia and the Americas.
But Vancouver faces stiff competition, especially from the three major American airports on the west coast: Los Angeles, San Francisco and Seattle-Tacoma. Because the U.S. cities have an advantage in reaching Latin America, YVR has invested significant effort on the Asia side of the equation.
The airport employs a team based in Hong Kong, which attends trade shows to meet new carriers, keeps track of new Asian airlines and their expansion plans, looks at when potential new entrants may try to enter North America, and “cold-calling” them early and often to get their business.
That was the case, Jones said, with Beijing Capital.
“Several years ago, we identified Beijing Capital Airlines as a carrier that was looking at expanding long-haul services,” he said. “That was essentially us reaching out. … We have to be proactive and make the case why we are a better choice than Los Angeles or San Francisco.”
In addition, Jones said top Vancouver airport executives visit the Chinese market at least twice a year, and possibly more frequently if carriers express real interest in choosing YVR.
“For the airlines, in terms of a brand-new aircraft, it’s a $100-million to $200-million investment,” he said. “So they will take their time to make sure they get the most out of their investment. … It gives them comfort if the airport partners at both ends of the route are in discussions with the airline.”
There’s another crucial part to the equation: Air Canada. YVR notes that Los Angeles, San Francisco and Seattle each has a major U.S. carrier currently flying to China (American, United and Delta, respectively). For YVR to compete, it needs not only the commitment of new airlines, but the continued support of the major local carrier.
“We look at where the new market opportunities are available, and also what Air Canada’s plans are,” Jones said. “It makes sense to work together. A strong Air Canada and a strong hub here is in our best interest.”
Vancouver now has to six Chinese airlines flying across the Pacific, two more than its next biggest competitor in North America. But Jones said YVR’s proactive approach can be applied to other growth regions such as Southeast Asia and India.
“Because of the long distance, there’s a consideration on the part of the airlines on the profitability of the (India) route,” he said. “With the arrival of aircraft like the Boeing 787, it has brought India into play. Places like Singapore, Vietnam, Malaysia and Bangkok … these are all regions that are now in play.”