China Eastern targets business travel with revamp of unlimited flights package as domestic competition intensifies
- ‘Fly at Will’ was initially launched in June for flights only during weekends
- Package ‘a creative way of starting a price war’, Aviation Think Tank expert says
China Eastern Airlines, one of the country’s three largest carriers, has reconfigured its unlimited flights package to cover only weekday trips, a move that industry observers said was targeted at business travellers.
As competition heats up for China’s domestic market in the absence of overseas travel because of the coronavirus pandemic, the Shanghai-based carrier changed its “Fly at Will” package to cover only weekday trips. An initial iteration of the package, launched in June, covered only weekend flights. Early this month, the airline also invited certain companies to purchase these packages in bulk.
At least 12 other carriers and several major online travel agencies have started offering similar deals since the initial package’s launch in June.
The change to Fly at Will comes amid a rush to fill widebody jets and have them flying once again. And with international travel hit by the pandemic – it was down by about 87 per cent year on year in June according to International Air Transport Association data – the Chinese domestic market has assumed greater importance. The supply of seats in the domestic market has increased significantly, but air travel in the first half recovered only to 64.7 per cent of the level seen during the same period in 2019.
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This has increased pressure on Chinese carriers, which lost more than 70 billion yuan (US$10.1 billion) in the first six months this year. And, with the change in Fly at Will, China Eastern has taken the fight to the sector’s most profitable commercial travel segment, business travel.
“China Eastern’s upgraded version of Fly at Will is competing particularly for business travellers,” said Lei Zheng, founder of Institute for Aviation Research. “Airlines seem to be preparing for the coming market consolidation and they are competing for clients.”
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The revamped package is priced at 3,456 yuan and allows travel on an unlimited number of flights during weekdays within 180 days of a ticket being confirmed.
Carriers such as China Southern Airlines, Hainan Airlines and Shanghai-based Juneyao Airlines have launched their own packages. China Southern, for instance, is allowing unlimited flights from Monday to Sunday for 3,699 yuan. Hainan Airlines is offering unlimited flights to and from Hainan province, excluding the national day holiday in October, for 2,699 yuan to 2,999 yuan.
Sichuan Airlines, meanwhile, is selling coupons that can be used for buying tickets, with 10 coupons worth 1,880 yuan available for 399 yuan and 10 coupons worth 3990 going for 999 yuan. China United Airlines has launched a “blind box” product for 398 yuan, which lets it pick routes for passengers, who can reject the options on offer up to three times.
“The Fly at Will products can be viewed as a creative way of starting a price war,” said Lin Zhijie, an expert with Aviation Think Tank. He said it was both a marketing as well as branding strategy for longer-term development. “When China Eastern pushes out the products, other airlines need to offer similar products too. Otherwise, customers will rush to China Eastern,” he added.
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And despite headwinds ahead, airlines expected to keep offering discounted products.
“It’s just the start, the competition will be more fierce and brutal,” said Institute for Aviation Research’s Lei. “The international market will not have changed much by the end of this year, so many widebody jets will need to be used for the domestic market. And passengers now already have high expectations of cheap tickets and packages. They will wait for more competition among airlines.”
