Twin-hub ambition
China Southern develops internationalization strategy by expanding
Published: May 24, 2018 05:58 PM

A staff member helps a passenger check in at Terminal 2 of Guangzhou Baiyun International Airport over the weekend. Photo: Courtesy of China Southern Airlines

On May 19, China Southern Airlines and its sister companies moved to Terminal 2 (T2) of Guangzhou Baiyun International Airport, the latest move for the carrier in its mission to build twin hubs in both Beijing and Guangzhou, South China's Guangdong Province.

It is the second time that China Southern has moved its base since its first move in 2004, with each move demonstrating the carrier's expansion across China, and even across the whole world.

So far, China Southern has put 200 airplanes in the airport, and in 2017, it carried more than 31 million passengers, accounting for nearly 55 percent of the airport's total annual passenger volume.

With its new base at T2 and as the main carrier at the airport, China Southern will fly more than 90 percent of the passenger flow.

Meanwhile, a total of 16 carriers, from both home and abroad, including Vietnam Airlines and Singapore Airlines, have also been moving to T2 of Guangzhou's airport.

According to a note China Southern sent to the Global Times, T2 is designed to manage an annual passenger flow of 45 million, compared with an annual passenger flow of 25 million at T1.

With T2 in full operation, the airport will now witness an annual turnover of more than 70 million passengers this year.

Currently, there are only three airports across the country that experience such volumes, namely those located in Beijing, Hong Kong and Shanghai.

Qiu Jiachen, chairman of the board of Guangzhou Baiyun International Airport Co, said that 60 percent of flights and passengers at the airport will move to T2 and that the airport will open more routes to Europe and the Americas, as well as to Southeast Asia, Oceania and Africa.

Qiu also predicted that the passenger turnover of the airport could reach 80 million by 2020.

'Guangzhou Road'

As early as 2005, Guangzhou-based China Southern had proposed a strategic transformation goal of becoming an airline with an international network.

In 2009, China Southern achieved a breakthrough with the launch of its first Australian destination, helping the airline begin to realize its internationalization strategy. And by 2012, it had officially launched the "Guangzhou Road" development strategy, which connected Australia and Europe via Guangzhou.

For more than a decade, the carrier has been working closely with Guangzhou Baiyun International Airport to develop its transit hub business.

The number of international transit passengers traveling through Baiyun airport carried by China Southern increased eightfold between 2009 and 2016, bringing the number up to 3.75 million.

Guangzhou airport has also become the primary gateway from the Chinese mainland to Oceania and Southeast Asia.

Also, the number of destinations to Europe and Australia via Guangzhou increased from six in 2009 to more than 20 currently. More routes including from Guangzhou to Rome and Guangzhou to Lahore in Pakistan are expected to be opened in the near future.

New airport

Although Beijing has been regarded as the base of Air China for years, that status has come under threat recently as airline giants including Haikou-headquartered Hainan Airlines along with China Southern continue to expand in the Chinese capital.

According to earlier plans made by the Civil Aviation Administration of China (CAAC), Shanghai-based China Eastern Airlines along with China Southern will be moved to Beijing's second, new airport due to open in its southern district of Daxing in 2019.

That relocation could take up to four years but would provide more opportunities for such airlines. For example, China Southern is expected to shoulder 40 percent of the passenger flow at the new airport.

The CAAC plans also noted that by 2025, China Southern aims to introduce 250 aircraft to Beijing's new airport and operate more than 900 flights on a daily basis.

To coincide with the overall route network plans of China Southern, its Beijing hub at the new airport will be gradually built into a composite aviation hub, complementing its Guangzhou hub and helping it realize its "twin-hub" strategy.

China Southern will begin entering Beijing's new airport as soon as it is put into operation. By then, its Guangzhou-Beijing dual hub goal will have begun its development journey