China Southern continues secondary route expansion with Cairns launch

China Southern’s Australia operation will reach six destinations and eight routes in Dec-2017 following the launch of services to Cairns. Guangzhou-Cairns will be the fourth route China Southern has launched to Australia in less than two years.

China Southern began operations in Australia in 1997 and has consistently operated the Melbourne-Guangzhou and Sydney-Guangzhou routes since early last decade. The airline launched its third Australia route and gateway in 2010 with Brisbane-Guangzhou. Perth-Guangzhou was added in 2011.

China Southern subsequently took a five-year hiatus from expanding its network in Australia, although it continued to grow in Australia by adding capacity to existing routes. As Blue Swan analysed last week, China Southern has enjoyed very rapid and consistent growth in Australia since the beginning of this decade.

See related report: China Southern celebrates 20 years in Australia with more capacity expansion

Network growth has resumed the last two years with a focus on new secondary routes. The first secondary route was launched in Jan-2016, connecting Shenzhen with Sydney. China Southern has since operated three weekly year-round flights on Sydney-Shenzhen. China Southern added a thrice weekly Melbourne-Shenzhen service in Jun-2017.

The airline also added its first secondary Australia gateway in Dec-2016, when it launched Adelaide. China Southern initially served Adelaide-Guangzhou with three A330-200 flights per week. Capacity was increased in Jun-2017 as A330-300s were replaced with A330-200s. Capacity to Adelaide is increasing further in Dec-2017 as two additional seasonal frequencies are added for a total of five weekly A330-300 flights.

Cairns will be launched on 13-Dec-2017 with three weekly frequencies from Guangzhou using A330-300s. This marks the first regular or year-round route from China for Cairns, although Cairns Airport has previously handled ad hoc flights from China during Chinese New Year, including from China Southern.

Cairns will be China Southern’s second destination in Queensland. Its existing Queensland destination, Brisbane, has been served with a year-round seven weekly frequencies since Oct-2015.

China Southern is upgrading the Perth-Guangzhou route from a year-round four weekly frequencies to a year-round five weekly frequencies in late Oct-2017. There have been no recent changes on the core Sydney-Guangzhou and Melbourne-Guangzhou routes, which are operated with year-round two daily flights and a third frequency during peak periods. For the third year, China Southern is operating three daily frequencies on the Guangzhou-Melbourne and Guangzhou-Sydney routes during peak months this summer (with the A380 again operating the additional Sydney frequency).

China Southern currently uses 283-seat A330-300s on Shenzhen-Melbourne and Shenzhen-Sydney; 275-seat A330-300s on Guangzhou-Melbourne and Guangzhou-Sydney; 259-seat A330-300s on Guangzhou-Brisbane; 257-seat A330-300s on Guangzhou-Adelaide; and 216-seat A330-200s on Guangzhou-Perth (based on China Southern schedule data provided to Blue Swan).

A first-class product is currently available only on Guangzhou-Perth, Shenzhen-Melbourne and Shenzhen-Sydney. These three routes have four first class and 24 business class seats per flight while the other four routes (Guangzhou to Adelaide, Brisbane, Melbourne and Sydney) have 30 business class seats but no first class. A premium economy product is currently only available on the Adelaide and Brisbane routes. The China Southern premium economy product offers extra legroom using the regular economy seat.

This summer China Southern will offer a fist class product on the seasonal third daily frequency on the Guangzhou-Sydney route as this flight will be operated with A380s. The other two Guangzhou-Sydney flights and all the Guangzhou-Melbourne flights will still be operated with 275-seat two class A330-300s, while the two Shenzhen routes will still be operated with 283-seat three class A330-300s (including first class).

However, China Southern will be removing first class from its Perth offering this summer as Perth is up-gauged to 259-seat A330-300s (188 economy seats, 41 premium economy/extra legroom economy seats and 30 business seats). China Southern will also be using this configuration for Guangzhou-Adelaide this summer and on the new Guangzhou-Cairns route.

China Southern plans to switch to a 286-seat two class A330-300 (258 economy and 28 business) on Guangzhou-Brisbane. Therefore, Brisbane will lose premium economy, which will only be offered this summer on Adelaide, Cairns and Perth.

For the business and corporate travel segments China Southern would benefit from offering a more consistent product in Australia. First class is a niche product but important as China Southern does not have lie flat business class seats on all its A330s.