Hainan Airlines' Xi'an-Melbourne inaugural flight launching ceremony on November 8. Photo: Courtesy of Hainan Airlines

Now that winter has descended on much of China, Australia could become a hot travel destination as the two countries have swept away many of the barriers to air traffic.

China and Australia have reached an agreement on the aviation rights that will remove flight restrictions between the two countries, the Civil Aviation Administration of China (CAAC) announced on Monday.

The two countries also agreed to liberalize traffic rights and code-sharing arrangements. Commercial air traffic has been restricted since January 2015, especially in departure cities such as Beijing, Shanghai as well as Guangzhou, capital of South China's Guangdong Province.

"[The agreement] will enable Australian and Chinese airlines to service destinations between and beyond both countries, and will allow them to take full advantage of their cooperative arrangements with their commercial alliance partners," Infrastructure and Transport Minister Darren Chester was quoted as saying in a statement posted on the website of the Department of Infrastructure and Regional Development of the Australian Government.

The policy will accelerate market liberalization and encourage the airlines to open more routes, Hainan Airlines said in a note sent to the Global Times on Wednesday.

Dominating the market 

The China-Australia commercial aviation market has become the second largest after the China-US market. The number of passengers flying between the two countries grew 13.5 percent to 2.4 million in 2015, according to CAAC statistics. The number could reach 3 million in 2016, CAAC said.

Chinese airlines dominate the market. Seven Chinese airlines, including national flag carrier Air China, China Eastern and China Southern, fly to Australia. They have launched 10 routes in 2016, including Air China's route between Sydney and Chengdu, capital of Southwest China's Sichuan Province.

In late December, China Southern plans to launch a route between Guangzhou and Adelaide, Australia.

"Chinese carriers dominate nearly 95 percent of the Sino-Australian market," Lin Zhijie, an industry market watcher, told the Global Times on Wednesday.

In comparison, only one Australian airline, Qantas Airways, flies to China, with routes to Shanghai and Hong Kong. The airline said it will restart a route between Beijing and Sydney in January 2017, after a seven-year hiatus.

Jetstar Airways suspended its Chinese routes in October, though it is expected to resume them during the upcoming Spring Festival holidays in late January.

Chinese airlines have plans to open more routes to Australia. In January 2017, China Eastern is expected to open a direct route between Sydney and Wuhan, capital of Central China's Hubei Province.

Greater interest in smaller cities

An article on the industry news portal carnoc.com reported in August that more than 60 percent of China-Australia seats are from Southeast Asia, New Zealand and the South Pacific, 53 percent of which are from Asia. China and Japan were the two fastest-growing markets in 2015.

Globally, China ranked the second largest aviation market after New Zealand in the inbound market for Australia in 2015, as China is now an important growing market for Australia.

China Southern and China Eastern are expected to benefit the most from the aviation rights agreement because the two airlines could open more routes and increase the frequency of flights from their respective hubs of Guangzhou and Shanghai.

China Southern has had its sights set on the Australian market for years, and it aspires to make its home city of Guangzhou a transfer hub between Oceania and Europe.

In a note sent to the Global Times on Thursday, China Southern said it and Xiamen Airlines fly nine routes to and from Australia with 132 flights a week, giving them 30 percent of the market - the most of any airline in the Sino-Australian commercial flight market. 

Like China Southern, Air China and China Eastern have been expanding into Australia for years. Because slots at airports in the country's largest cities have grown scarce, the airlines have turned to smaller cities.

In November, Hainan Airlines has become the sixth Chinese airline to fly to Australia. It opened two routes to Sydney, one from Changsha, capital of Central China's Hunan Province, and one from Xi'an, capital of Northwest China's Shaanxi Province.

Flights on those routes are running at 70 percent of capacity, Hainan Airlines said in a statement sent to the Global Times on Wednesday.

Hong Kong Airlines, a subsidiary of Hainan Airlines' parent HNA Group, opened a direct flight from Hong Kong to Cairns and the Gold Coast in 2015, and HNA has plans to further expand into Australia in the future.

In June, HNA Group agreed to buy an at least 13 percent stake in Virgin Australia Holdings, becoming the airline's third largest stakeholder. The two companies also agreed to cooperate on code sharing and service resources.