Hainan Builds on North American Success

Dec. 22, 2017
Hainan Airlines sees its route to success in North America.

Hainan Airlines is one of serval Chinese carriers expanding its footprint in North America as demand for connectivity with Asia grows. The airline expanded into Las Vegas in 2017 and launched flights from John. F. Kennedy International Airport (JFK) to Chongqing and Chengdu.

Liang Pubin managing director, Hainan Airlines North America, recently chatted with Airport Business to talk about the airline’s vision in North America and what it sees for the future.

Airport Business: How are you approaching expansion into North America?

Liang Pubin: The market in North America, there is potential, that’s for sure. Carriers believe there are a lot of potential markets now and in the following years. Our approach to North America is try to pursue any market that’s underserved. The traditional carriers all focused on the traditional gateways, but the market continues to grow and a lot of opportunities have shown up. We found there are cities that are underserved, like Seattle, where we started service in 2008; Boston, where we started service in 2015 and San Jose and even Las Vegas. Toronto and Calgary are also examples. Actually, Delta has even been following our path.

AB: When you say underserved markets, are you looking at it from where inbound traffic from China and where they want to go here or are you more focused on where North American travelers want to go in China?

LP: Both. We have to study both markets to see the demand. China definitely is important, but the U.S. part is of the same importance. There’s no route that can be successful by the passenger contribution from one direction.

AB: So what are the most demanded markets by both U.S. and Chinese travelers then? Is it more business or leisure destinations?

LP: This market is a business strong market. Tourism has been a key factor that supports the growth. When the Visa policy was relieved in 2012, that helped drive the tourists between the two markets, especially the growth from China. But, the business oriented market is still strong. In addition to the corporate travelers, the students are also quite a strong market between the U.S. and China. While it’s a business strong market, the other sectors are growing very fast.

AB: A big challenge in North America is despite a big demand to visit from Chinese travelers, most cities here are not China ready to help them navigate facilities or the metropolitan areas. Is a China ready airport or city becoming a perquisite before you’ll consider a new market?

LP: All the airports and the cities we’ve worked with are very supportive and try their best to help the airport be successful. But from our perspective, when we do the marketing study to determine if we’re going to run a flight, that’s not a factor we’re going to think about. But we do want to consider if the airport is capable of handling long haul flights. We work with all the cities and airports closely to try to help and improve the experience of travelers from China.

AB: Are there any specific markets in the U.S. or Canada you see demand now to add flights to China that are not currently served?

LP: We have been keeping a close eye on potential opportunities and so far we haven’t we decided to issue any new destinations, but this is constant work for us.

AB: So will there be any additional capacity or new markets served by your airline in 2018?

LP: Adding capacity will definitely be our priority. When that capacity cap can be released when the new round of bilateral aviation agreements can be reached, then we’ll see how much capacity we can have to increase our frequency. We still believe the routes we fly to Boston and Seattle and all our other destinations we do have a demand to increase frequency. At the same time, we’re always looking for new opportunities in the market to see if we can further expand our network to meet the demand.

AB: I know right now one of the major Chinese carriers is going through some major financial struggles right now. Does this create potential for Hainan to serve a traditional market that is overlooked by you right now?

LP: Right now our focus is on providing the best service and that’s our commitment to the market. And being a five star SkyTrax carrier for the past several years, that’s the value we bring to the market as our edge while focusing on safety. I think that’s going to be our focus to differentiate us with our competitors.

AB: What about the recent addition of Chongqing and Chengdu with New York? How does that fit into your strategy?

LP: Our focus has been with the up and coming cities. Now we’re trying to extend the path in another direction and that means the main cities to the gateways of China. Chongqing and Chengdu are examples. Those cities are two important cities in China and by the size of the cities, both have populations of more than 10 million. Chongqing has 30 million people, which is in fact the largest city in the world by population. Both cities are very important economically and both have very rich cultural heritages and their unique natures. Chengdu is in fact where pandas come from.