Hu Xiaocen, 37, a Shanghai native working in the southern city of Shenzhen, bought a 3,322-yuan (US$475) China Eastern Airlines travel package and used it to book two air tickets from Shanghai to Shenzhen.
“Due to the virus, I can’t travel as much as I used to, so I mainly just go home to visit my parents,” she said. “The China Eastern Airlines package is really beneficial to me.”
Consumer are waking up to a new world of domestic air travel. Multiple carriers are offering fare discounts, seat upgrades or even free tickets to get bums on seats.
It’s all part of a campaign to get an industry hard hit by coronavirus back in the air.
Shanghai-based Spring Airlines was the latest to join the rush to fare incentives. It is offering a 2,999-yuan package that covers all domestic routes, and is the first to put no time limit on frequency, dates or routes.
The coronavirus severely dented air travel. China Eastern’s loading factor in May was only about 65 percent, 20 percentage points down from a year earlier.
In the first quarter, the carrier reported a loss of 4 billion yuan on 15.4 billion yuan of revenue. Squeezing its bottom are the 47 billion yuan of short-term bonds that mature this year.
Industrywide, domestic airlines suffered a loss of 33.6 billion yuan in the first quarter, according to the Civil Aviation Administration of China. To date, no Chinese carriers have suffered the bankruptcies declared by some foreign airlines.
Lin Zhijie, a researcher in the civilian aviation industry, said low-cost travel packages won’t solve cash flow pressures but are at least a move to stop the hemorrhaging.
Han Liang, a Shanghai white-collar worker, just returned from a trip to Hainan Island. In a bit of bad luck, he missed out on a special 2,999-yuan travel package offered by Hainan Airlines, which allows consumers to travel unlimited times to the southern island in a year.
That contrasts with the China Eastern package, which limits usage to weekends and doesn’t permit passengers with children. Han, who likes visiting Hainan Island, said he will be traveling with Hainan Air from now on.
'Fly as you want'
There are hitches to all these travel specials. Some consumers complain that it can be hard to book air tickets using a travel package. Destinations may be limited.
For example, if there is only one flight between Shenzhen and Kunming, capital of Yunnan Province, it will be hard to book a ticket using a travel package.
Another problem is flight cancellations, which should ease as more flights resume.
The biggest benefit of so-called "fly as you want" packages is that you can travel numerous times within most routes.
For example, if you plan to fly to Chengdu, capital of Sichuan Province, to visit the panda sanctuary there and you have already bought a China Eastern travel package, you only have to book a ticket at least five days in advance and off you go.
The one-way airfare between Shanghai and Chengdu usually costs at least 1,800 yuan.
Consumer demand is certainly obvious. Earlier, 100,000 travel packages offered by China Eastern Airlines were sold out within 12 days, and 65,000 flights were booked the first weekend.
The website and App of Hainan Airlines were crippled due to panic buying of that carrier’s package. On July 7, the sales model changed and the packages were sold via live-streaming on the Taobao platform. The airline provided only 10,000 such packages, however.
The China Eastern package can be used only for weekend travel, while Hainan Air’s can’t be used during the September 30-October 8 holiday period and only covers flights to Hainan Island.
One staff at Hainan Air said revenue from low-cost package travel won’t help the carrier’s cash flow, but it will help revive tourism on the tropical island.
“The overall cost of the Hainan Airlines package is too high, so it is difficult to sell it on a large scale,” said Qi Qi, an expert in civil aviation.
Researcher Lin noted that the Hainan Airlines offer is more modest than that of Eastern Airlines, but it’s a good buy for those who plan to fly five times to the island and it does link up well the favorable policies bestowed on the island by the central government.
On June 1, the central government released a master plan to support the creation and development of a Hainan free-trade port. The goal is to develop the island into a globally significant free-trade port by 2050.
As a result, the allowed amount of duty-free shopping on the island was increased to 100,000 yuan, and the range of goods included was expanded. That’s a big incentive for visitors.
According to International Air Transport Association, the global loss of the civil sector is expected to top US$84 billion this year.