Tuesday, October 7, 2008

Jetset: "A Dream Plan That Didn’t Fly"

I usually dread mingling with the business elite type at parties, as I tend not to share their enthusiasm in talking about the latest merger-and-acquisition deals. But this summer there was one hot topic that we all felt strongly about: the turbulent start of the Beijing-Shanghai Express flights. And boy, did I get an earful.

“Can you believe all 36 flights that day had nothing but full-fare seats?”
“The lines were horrendous at the Express counters, while the rest of the check-in area was empty.”
“This agent didn’t even know how to enter my frequent flier number!”

Complaints like these must be disappointing to officials at CAAC, China’s civil aviation authority, which launched the service on August 6. CAAC had ordered the five airlines flying between Beijing and Shanghai Hongqiao to pool their resources together in a bid to boost service levels on the country’s most-traveled air route, flown by almost 4.2 million passengers last year.

CAAC had drawn a dream plan: Flights every 15 to 30 minutes, all tickets fully changeable, as well as dedicated check-in, security, gates and baggage claim areas at both ends. Officials even instructed air traffic controllers to give the Express flights priority clearance.

Despite the fanfare, all that passengers noticed was high fares – as well as weakening service. Frequent fliers were quick to pinpoint the culprit of all the problems: government-sponsored cartel.

In the good old days, China Eastern and the Air China/Shanghai Airlines alliance competed healthily on this so-called golden route. (Hainan Airlines and China Southern operated too few flights to be serious contenders.) Each group ran a roughly hourly service from 8am to 8pm, and fliers like myself were able to snatch tickets as cheap as RMB 300 during off-peak hours.

When CAAC mandated that the airlines “coordinate” their operations, the carriers must have taken it as a cue to form a new price-fixing scheme. The airlines pulled out all discounts presumably to prevent fliers from abusing the ticket flexibility rule. They don’t want to see someone grab a cheap fare only to change it to a pricier flight or to another airline.

While the total number of flights remained the same, the “improved” or more evenly spread-out schedule has led to a total sold-out scenario during peak hours and overcapacity at other times. Adding insult to injury, inadequately trained airport agents have had trouble using one common system to check in passengers flying five different airlines, making the Express service area a scene of chaos and confusion.

All these may just be teething problems – and CAAC has apparently heard the public outcry. Officials say they are tweaking the service, and some modestly discounted fares have re-appeared. But many business travelers – not only the intended beneficiaries of the new service but also firm believers in market forces – have already voted with their feet. Has anyone noticed how hard it is to get a sleeper ticket on those overnight Beijing-Shanghai trains? Steven Jiang

This article was originally published on page 34 of the October 2007 issue of That's Beijing magazine.

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