Saturday, February 28, 2009

Jetset: "A Straight Path across the Strait"

The shortest distance between two points is a straight line. When it came to air travel between mainland China and Taiwan, however, the shortest flight path was anything but straight. For more than five decades, political reality forced travelers to connect through a third country or region, adding hours of hassle to what should have been an easy hop across the Taiwan Strait.

Those days are thankfully over. After years of negotiations, mainland and Taiwan authorities launched daily nonstop flights last December. Eleven airlines are currently permitted to fly 108 weekly flights between two dozen cities, potentially carrying three million travelers every year (that’s still only half of the current annual mainland-Taiwan passenger volume). Without the required Hong Kong stop or overfly, these flights have cut travel time by two-thirds. That’s a huge boon for the 600,000 or so Taiwan businessmen living in Shanghai, who can now reach Taipei in 90 minutes instead of six hours.

Closer to our home city, travelers are happy to see their Taipei flights curtailed from a seven-hour slog to a three-hour glide. Grabbing a seat can be difficult, though, especially during holidays, as demand far outstrips supply. The shortfall in capacity is likely to worsen when Taiwan starts to allow more mainland tourists in. Some analysts say Beijing has capped the nonstop flights to cushion the economic impact upon the Hong Kong and Macau airports, which earn a considerable chunk of revenue from transiting Taiwan-bound passengers.

Not surprisingly, passengers save little even as airlines save on transit and fuel costs with more direct routing. A dummy booking on Air China’s website for a mid-March Beijing-Taipei economy-class roundtrip yielded a fare of RMB 4,750 including taxes, comparable to previous prices. But at least you can earn 2,144 miles for the trip (or redeem 50,000 Air China miles for the ticket). That’s not bad considering these flights are technically charters, which usually forbid mileage accrual and redemption. On the other hand, the normalization of air links has taken the shine off cross-strait flights, with frequent fliers reporting the disappearance of special onboard amenities such as Taiwan cuisine, real chinaware and luxury pillows – at least for those stuck in the back of the plane.

For aviation enthusiasts, one bright spot remains – Air China’s dedicated fleet of jets with special paint schemes. Since the mainland’s flag carrier is unable to display the red banner in Taiwan due to local restrictions, it has instead painted the fuselages of a dozen planes with national symbols such as pandas and peonies. China Airlines – Air China’s island counterpart – went through its own makeover more than a decade ago, prior to Hong Kong’s return to the mainland. Its distinctive hand-painted plum blossom tails have since earned rave reviews worldwide. Steven Jiang

This article was originally published on page 94 of the March 2009 issue of The Beijinger magazine.

Tuesday, February 3, 2009

Jetset: Changes in the Air

A time for marriages and mega-carriers?

The Year of the Ox has arrived with the usual bang of firecrackers, but air travelers may not feel so bullish about flying in 2009. Although holding no crystal ball, I venture to predict one important change in the air: fewer airlines flying – both domestically and internationally. With demand for air travel plummeting faster than oil prices, the world’s air carriers are desperate to cut excess capacity and many see consolidation as the only solution to the industry’s conundrum.

Closer to home, all eyes are on China Eastern Airlines (MU), considered by many analysts to be insolvent and the prime target for acquisition. The Shanghai-based carrier has been plagued by incessant bad news in recent years – from a fatal crash and an illegal pilot strike, to a failed attempt to cooperate with Singapore Airlines (SQ), and huge losses (RMB 6.2 billion) from badly timed fuel-hedging. A last-minute capital injection of RMB 7 billion from the government and a voluntary 30-percent pay cut by its management may be too little, too late to save the struggling carrier.

Trouble is, nobody seems to have the money or interest to buy MU. Its domestic competitors are not faring much better financially, while the few potential foreign suitors are likely to think twice after the SQ deal debacle last year. Speculation is rife, though, about an arranged marriage between MU and its smaller hometown rival, Shanghai Airlines (FM) – a scenario apparently favored by the local government eager to create a dominant carrier based in China’s biggest city.

FM is currently aligned with flag carrier Air China (CA) and both are Star Alliance members. If MU mergers with FM, whither FM’s alliance status? Like other loyal Star fliers, I hate to see it lose the Shanghai hub. But the bottom line is that the government still owns all the major Chinese airlines and can order any kind of mix-and-match that it sees fit. Which does beg the question – why not just combine all the Chinese airlines under one banner like in the good old times? Talk about a true Chinese mega-carrier!

Farther afield in the US, Delta Air Lines (DL) officially tied the knot with Northwest Airlines (NW) in late October, forming the world’s largest airline, as well as its biggest frequent flier club. Given NW’s long history of serving Asia, many China-based members of its WorldPerks program understandably feel a sense of unease. Although full integration is not expected until 2010, you will see the NW brand slowly disappear and the two carriers’ loyalty schemes merge by the end of this year.

The good news is no one will lose any hard-earned miles. You will soon be able to transfer miles between the DL and NW programs, and eventually have a single DL SkyMiles account. DL will borrow a page from NW and start letting travelers gain elite status based on segments flown, in addition to miles. It will also continue awarding a minimum of 500 miles per flight, bucking the industry trend in the US. But – you knew there would be a “but” – DL will adopt its three-tiered award chart (instead of NW’s two-tier) for the combined program, effectively adding another layer of obstacles for members looking to redeem free tickets. Steven Jiang

This article was originally published on page 98 of the February 2009 issue of The Beijinger magazine.