China Eastern is boosting its Australian network with a new service from Sydney to Hangzhou and onwards to Beijing starting in November.
The three times a week offering will operate as a Beijing-Hangzhou-Sydney routing with Airbus A330 equipment.
China Eastern general manager for Oceania Kathy Zhang said the new flights complemented the Skyteam alliance member’s current Sydney-Nanjing-Beijing service and offered improved connections to the Chinese capital.
“China Eastern Airlines’ new route to Hangzhou is a great example of the growth of services between Sydney and China’s second-tier cities, boosting the local tourism industry and economy,” Zhang said in a statement.
Flight schedules show MU711 departing Beijing at 2000 on Tuesdays, Thursdays and Saturdays, arriving at Hangzhou two hours and 15 minutes later. After 90 minutes on the ground, the flight continues on to Sydney, arriving at 1300 the next day.
The reciprocal MU712 was due to depart Sydney as an overnight service to Hangzhou on Wednesdays, Fridays and Sundays, arriving at 0550 local time the next morning. The flight continues onto Beijing at 0750 with the scheduled arrival time 1010.
China Eastern’s Sydney-Nanjing-Beijing service, MU728, departs the NSW capital on Tuesdays, Thursdays and Saturdays, while the reciprocal MU727 runs on Mondays, Wednesdays and Fridays.
The Qantas alliance partner also flies twice daily from Sydney to its largest hub at Shanghai Pudong Airport.
It also planned to start a daily, year-round nonstop flight from Brisbane to Shanghai from December 16.
China Eastern will operate year-round flights between Brisbane and its Shanghai hub from November 2016.
While the Skyteam member has already committed to serving the Queensland capital over January and February 2016 as a seasonal service, November will mark the start of the airline’s permanent presence on the Brisbane-Shanghai route.
Brisbane Airport chief executive Julieanne Alroe said having a nonstop flight to Shanghai, one of the world’s key financial hubs, would benefit tourism and improve business links between Australia and China.
“For all the Queensland and Chinese companies who are set to benefit from the upcoming Free-Trade Agreement, this new flight will make doing business together easier, faster and more efficient,” Alroe said in a statement on Thursday.
“Shanghai is a mega city of some 14 million people and is headquarters to numerous Chinese private companies and state-owned enterprises which have operations in Brisbane and throughout Queensland.”
China Eastern will use Airbus A330s on the route three times a week and its alliance partner Qantas will place its QF airline code on those services.
In August, the ACCC approved China Eastern and Qantas’s application to partner on Australia-China services, albeit with conditions attached, for the next five years.
China Eastern flagged launching new services, as well as boosting frequencies on its existing routes to Sydney and Melbourne, as part of its submission to the ACCC.
Moreover, the China Eastern board has charged its president, listed on the company’s website as Ma Xulun, with responsibility to work through the details of winding up its investment in Jetstar Hong Kong.
China Eastern said in a statement dated Friday August 14 the board had approved a resolution on the “termination of the proposed establishment of Jetstar Hong Kong and its winding up”.
“The president of the Company shall be authorised to take charge of the detailed implementation,” the China Eastern statement said.
“The company will further communicate and negotiate in regard of the matter with the other two shareholders of Jetstar Hong Kong, Shun Tak Holdings Limited and Qantas Airways Limited.
“The Board considers that the termination of the proposed establishment of Jetstar Hong Kong will have no material adverse impact on the financial conditions and production and operation of the company.”
Jetstar Hong Kong, a joint-venture between Qantas, China Eastern and Shun Tak Holdings, was grounded in June when the Hong Kong Air Transport Licensing Authority (ATLA) ruled the proposed low-cost carrier did not meet the territory’s principal place of business test.
China Eastern said its board deeply regretted that Jetstar Hong Kong’s application for an operating licence was rejected.
However, the board expressed optimism about the development potential and prospects for low-cost carriers and “endorses the company’s ongoing exploration of the development of the LCC business”.
Jetstar Hong Kong chief executive Edward Lau said in a statement on August 13, before the China Eastern announcement, that the airline’s board was “continuing to assess all options, and will announce the next steps accordingly”.
Lau also sharply criticised the ATLA decision, saying it “incorrectly cited facts in a number of areas”.
China’s ambassador to Australia Ma Zhaoxu has asked Australia’s competition regulator to “bear in mind” the interests of the overall relationship between Australia and China when considering the proposed China Eastern-Qantas alliance.
The public comments from the Chinese diplomat were in a letter Ma wrote to Australian Competition and Consumer Commission (ACCC) chairman Rod Sims.
“I write to you to express my concern about the ongoing review of the proposed Joint Coordination Agreement between China Eastern and Qantas,” Ma said in the letter dated May 15 and published on the ACCC website.
“The aviation plays an important role in promoting bilateral relationship, particularly in facilitating people-to-people exchange.
“The collaboration agreement between China Eastern and Qantas, which was signed in the presence of Chinese President Xi Jinping and Australian Prime Minister Tony Abbott, will inject new momentum into our aviation cooperation by meeting the growing demand for international travels.”
The signing ceremony, which took place in November 2014 at Parliament House in Canberra, unveiled a proposed joint-venture on Australia-China routes the airlines say would lead to new services and more onward connections from China Eastern’s Shanghai hub.
Also, Qantas planned to relocate its operations at Shanghai Pudong Airport to Terminal One, which is where China Eastern is based, as part of the alliance to improve transit times and share facilities, among other benefits.
However, the ACCC said in a draft determination in March it intended to block the alliance because it would give Qantas and China Eastern the ability to raise fares and limit capacity growth on the Sydney-Shanghai route. The two carriers combined held about 83 per cent of all seats between Sydney and Shanghai.
Ma said the alliance would not reduce competition or lead to monopoly. Instead, it would serve the interests of customers.
“I believe the coordination between China Eastern and Qantas is in the long term interests of both Australia and China,” Ma wrote.
“I understand that your commission has been in close consultation with China Eastern and Qantas and hope you could bear in mind the interests of our overall relationship and make a fair and reasonable decision on this matter.”
Chinese tourism is Australia’s largest inbound tourism market. Qantas and China Eastern say inbound tourism from China to Australia was expected to be worth $9 billion annually to the Australian economy by 2020.
In January, the two governments agreed to expand significantly available capacity for both Chinese and Australian carriers over the next three years under new bilateral air services agreements. The move came after the two nations put pen to paper on a free trade agreement in late 2014.
The Chinese Ambassador’s full letter can be read on the ACCC website here.
China Eastern and Qantas have offered a “capacity condition” on the Sydney-Shanghai route as part of their attempt to win over the Australian Competition and Consumer Commission (ACCC) on their proposed alliance on Australia-China routes.
The offer of a capacity condition is contained in the two carriers’ latest submission to the ACCC seeking approval for the proposed tie-up. The ACCC said in a draft determination in March it intended to block the alliance because it would give Qantas and China Eastern the ability to raise fares and limit capacity growth on the Sydney-Shanghai route.
In response to the draft determination, the pair said the ACCC failed to appreciate the vigorous and effective competition provided by other carriers offering indirect services between Australia and China the role of other airlines in the Australia-China market.
Moreover, the competition regulator placed insufficient weight on the public benefits Qantas and China Eastern claim will flow from the alliance and disregarded the benefits to Australians that come from an Australian carrier being able to maintain an operating presence in China.
Also, Qantas and China Eastern said their proposed partnership would enable and expedite capacity growth on routes between the two countries, rejecting the ACCC’s assertion that it would limit growth.
“The Commission’s stated concerns ignore commercial realities,” China Eastern and Qantas said in their joint submission.
In its draft determination, the ACCC’s argued the partnership would result in “significant public detriment”, given Qantas and China Eastern currently held about 83 per cent of all seats between Sydney and Shanghai, which gave them an “increased ability and incentive to limit capacity and/or increase airfares” on the route.
Qantas currently flies daily from Sydney to Shanghai, its only destination in mainland China, with Airbus A330s. China Eastern operates Sydney-Shanghai, Melbourne-Shanghai and Sydney-Nanjing-Beijing services.
While Air China also flies between Sydney and Shanghai with a three times a week service, the ACCC said in March it did not believe the Star Alliance member would be an effective competitor against a combined China Eastern-Qantas entity and noted it had reduced its presence on the route over the past five years.
In response to the ACCC’s initial ruling, and despite their rebuttal of certain points made in the draft determination, Qantas and China Eastern have offered a “capacity condition which specifically addresses the Commission’s concerns and which ensures the Applicants will maintain and grow capacity”.
“This Draft Capacity Condition, coupled with the commercial terms of the Joint Coordination Agreement and the realities of global aviation, mean that the Applicants will neither have the ability or incentive to reduce capacity or limit growth,” the submission said.
The details of the capacity condition were redacted in the public version of the China Eastern/Qantas submission for commercial in confidence reasons.
Qantas and China Eastern also asked economists at HoustonKemp and aviation consulting house CAPA – Centre for Aviation to analyse the effects of their proposed alliance.
The CAPA report noted capacity between Australia and China via mid-point hubs such as Hong Kong, Singapore and Kuala Lumpur to the top 15 Chinese airports more than doubled between March 2010 and March 2015.
Meanwhile, the HoustonKemp report said indirect operators imposed a strong constraint on the price offered for direct services on the Sydney/Shanghai route as well as a range of Australia-China city-pairs.
“To deny authorisation to the entire Proposed Conduct on the basis of one single route overlap is inappropriate, particularly given that the Commission is otherwise satisfied that the Proposed Conduct will not have a significant impact on any other area of competition,” the China Eastern and Qantas submission said.
“The overlap with China Eastern in respect of the Sydney-Shanghai route that the Commission perceives as the fundamental problem is in fact what underpins the entire arrangement and therefore the mutual commercial interest of the parties to deliver the public benefits of connectivity, schedule choice and terminal co-location.”
The complete China Eastern/Qantas submission can be read on the ACCC’s website.
￼￼￼The federal government’s Department of Infrastructure and Regional Development has called on Australia’s competition regulator to reverse course and give Qantas’s proposed alliance with China Eastern the green light.
In March, the Australian Competition and Consumer Commission (ACCC) said it a draft determination it intended to knock back the tie-up, arguing the partnership would give Qantas and China Eastern “an increased ability and incentive to limit capacity and/or increase airfares” on the Sydney-Shanghai route.
However, the Department of Infrastructure and Regional Development said in a submission to the ACCC following the draft ruling, the proposed agreement was “positive for the Australian economy and is consistent with the Australian Government’s aviation policy settings”.
“The department sees no reason to deny the proposed coordination agreement,” the general manager for the Department’s aviation industry policy branch Stephen Borthwick said in the submission dated April 8.
“The benefits that will flow to Australia’s aviation industry, Australian consumers, the Australian tourism industry, and the Australian economy as a whole are exactly the benefits the Australian Government’s aviation policy is designed to support.”
In its draft determination, the ACCC expressed concerns that Qantas and China Eastern combined currently operated about 83 per cent of all seats between Sydney and Shanghai.
While Air China also flew between Sydney and Shanghai with a three times a week service, the ACCC said it did not believe the Star Alliance member would be an effective competitor against a combined China Eastern-Qantas entity and noted it had reduced its presence on the route over the past five years.
“The ACCC does not consider that Air China will sufficiently constrain Qantas and China Eastern in the event they decide to reduce or limit growth in capacity to increase airfares if the Proposed Conduct is authorised,” the ACCC said in its draft determination.
“The ACCC considers that the lessening of competition on this route that will arise as a result of the Proposed Conduct is likely to outweigh any of the public benefits likely to arise.”
In response, the Department said the ACCC’s draft ruling was “too narrowly focused on the Sydney-Shanghai route rather than the operations of the wider Australia-China market.”
It argued it was a “commercial reality” that in any given market a hub airline would have a significant market share on routes to or from that hub.
“This should not in itself prevent the formation of immunised alliances with the other carriers when consumer benefits can be showed to outweigh competitive impacts,” the Department’s submission said.
“The department also contends the ACCC has overstated the impacts on the Sydney-Shanghai route, particularly when considered in the context of the existing competition on the route and the availability of one-stop services in the broader Australia-China market.”
Meanwhile, the National Tourism Alliance argued in its post-draft determination submission the alliance would allow both Australian and Chinese markets to “better and more efficiently serve secondary cities in China through a domestic Chinese hub”.
“The draft determination constrains the ability of Australian airlines to develop a strategic hub in China,” the Alliance’s April 8 submission said.
“The Australia-China market is highly competitive in terms of both direct traffic and indirect options through other Asian hub cities.
“We are concerned that the draft determination cements a competitive advantage for other carriers and these hubs, through the existing liberal air services agreements that China has with them, in addition to the arrangements that Australia has with these third countries.”
Qantas planned to relocate its operations Shanghai Pudong Airport to Terminal One, which is where China Eastern is based, as part of the alliance to improve transit times and share facilities, among other benefits.
Australia’s competition regulator has issued a draft decision knocking back China Eastern and Qantas’s application for a proposed alliance.
The Australian Competition and Consumer Commission (ACCC) draft determination said the partnership was “likely to result in significant public detriment by giving Qantas and China Eastern increased ability and incentive to limit capacity and/or increase airfares on the Sydney-Shanghai route”.
ACCC chairman Rod Sims said Qantas and China Eastern accounted for more than 80 per cent of capacity on the Sydney-Shanghai route and were the “major competitive constraint on each other” given they were the only carriers offering direct flights.
“The ACCC understands Qantas’s desire to form an alliance with a Chinese airline to establish a gateway to North East Asia,” Sims said in a statement on Tuesday.
“However, the ACCC’s concern is that they have chosen to do so with their main competitor on the one route between Australia and China on which Qantas operates direct flights.
“Competition between them will be greatly reduced under the proposed agreement.”
While the ACCC acknowledged there would be “some limited public benefits” as part of the proposed alliance, it was not convinced the benefits outweighed with “significant public detriment likely to result from Qantas and China Eastern coordinating their services on the Sydney-Shanghai route”.
Submissions from interested parties in response to the ACCC’s draft decision were due by April 8.
Comment was being sought from Qantas and China Eastern.
Eastern Miles or Qantas Frequent Flyer. (This flight was booked with Qantas but is codeshared and operated by China Eastern.)
UP THE BACK OR POINTY END?
Economy 61L, a window seat in the exit row with more legroom than a standard seat and a bulkhead in front so no one can lean back into you. No extra charge; I simply ask for it at check-in. (The exit rows can’t be pre-booked but are given on a first-come basis at the counter to suitable-looking people.)
TIME IN THE AIR
10 hours, 20 minutes. (Flight times are civilised, we depart at 11am and arrive about 7.30pm local time).
THE SEAT STUFF
32-33 inches (81-83 centimetres) pitch, 18 inches (45 centimetres) width. It’s a 2-4-2 layout for 204 economy class seats.
20 kilograms check-in, seven kilograms carry-on.
The seats seem harder than usual. A blanket and pillow are provided. The plane is hot but there is no overhead personal air adjustment. Insufficient water is served.
In the exit row, personal TV screens pop out of the armrest. In the other rows, they are in the seatback. There are on-demand movies, TV shows, games and music but the quality and quantity don’t come close to Qantas, Emirates, Singapore Airlines, Air New Zealand or any other airline I have flown with recently. Skyfall is the big drawcard in the “latest movies” section, but it was released in Australia more than six months earlier. The best entertainment is watching the high number of passengers who fail to follow basic instructions: going to the toilet during takeoff, walking around when we are told to buckle up during turbulence …
It’s friendly, but the crew has limited English and I have no Mandarin, so idle chatter is out of the question.
Two meals are served with plastic cutlery. No.1 is beef with noodles and No.2 is pork curry with rice. Tiny prawns in a salad with the first meal are alarmingly pink and artificial looking. There are no snacks between meals. Alcohol is limited. Wine and beer are available with the first meal. When I ask for a second drink, a tiny portion is served reluctantly, but after that I’m told the alcohol has run out. I notice some passengers break out their own Baileys Irish Cream.
ONE MORE THING
China Eastern is flying high in the fashion stakes, recently unveiling new blue uniforms with red accessories by Christian Lacroix.
If possible, go on a flight actually operated by Qantas. (Sydney-Shanghai flights are still operated by Qantas but Melbourne-Shanghai by China Eastern). My experience with codeshare buddy China Eastern is nowhere close to Qantas standard. But if you have to go with China Eastern, at least you get Qantas frequent-flyer points.
Qantas increased its codeshare arrangements with China Eastern on May 1 so Qantas passengers now have 17 direct Qantas or China Eastern services between Australia and mainland China each week.
Tested by Robert Upe who flew courtesy of the International Luxury Travel Market.