High above the crowds in Shanghai's trendy
Xintiandi enormous billboards advertise impossibly cheap
flights to London on British Airways.
The arrival of BA's first Boeing 777 passenger
flight at Pudong International Airport on June 2 marked
the British carrier's first new route in half a decade.
It also launched a price war that will make passengers the
ultimate winners, at least for a couple of months.
British Airways' five weekly flights will
add to a similar number of flights offered by Virgin Atlantic
Airways and China Eastern. The new flights will also increase
competition among the only three airlines that fly directly
from China's financial capital to London, which acts as
a major gateway to Europe.
The Chinese Government eased restrictions
on the number of flights allowed between Shanghai and London
in 2004. In January of this year, it granted the UK approved
destination status allowing for easier travel by Chinese
passport holders.
These agreements paved the way for British
Airways to start flying directly to Shanghai. The airline
already flies to Beijing.
"We wanted to fly here for years but
just haven't been able to," said Jenny Lourey, BA's
area general manager for Asia Pacific.
BA marked the new flight with a full spread
of media events, including press conferences and a very
public landing for the first flight complete with a dragon
dance to welcome the passengers and public dignitaries.
"It's a remarkable city, but we also know it will be
a very competitive market," said Rod Eddington, BA's
CEO during a press lunch the next day.
He wasn't kidding. In the last couple of
months, ticket prices to London have sunk as airlines try
to trump each other with better deals.
According to an agent at elong.net, a popular
online booking service, China Eastern, Virgin and British
Airways are all offering discount deals and people are grabbing
them.
"It's because British Airways has
a special price. Then the other airlines started giving
out deals," said Leo Yu at elong.
China Eastern has a flight for about 3,400
yuan (US$411) return, the cheapest, but flights with the
other two can be found for just a few hundred more. On its
website Virgin has flights starting at 3,990 yuan (US$482)
and BA has them for about 3,850 yuan (US$466).
Before the deals started cropping up there
were no flights for less than 5,000 yuan (US$605) and that
was with luck.
If passengers are the ones reaping the benefits of the stepped-up
competition, the short-term losers are the airlines that
are selling tickets as cheap as possible even at a loss
to get as many of the 150,000 passengers expected to make
the trip this year.
Ironically, said Lourey, the cheap deals
are just the cost of doing business.
"We need to do something to tell people
we are here," said Lourey and added that BA's deals
are likely to last throughout the summer.
"We won't make much money here for a couple of years.
It took a long time to start making money in Beijing."
"It's actually good for you guys living
here because there is much more choice."
With a new airport and more people with
enough money to travel, Shanghai is a prime route. Airlines
are quickly filling up capacity.
Source: China Daily
