Although China Southern Airlines has significantly grown
corporate business over the past few years, the segment remains a small portion
of its business, something the carrier intends to change.
Since launching its first business travel program in 2003,
China Southern has grown business travel sales to $1 billion, and it grew 27
percent year over year in 2015, senior vice president of sales Li Dongliang
said. That includes 40 global corporate contracts, accounting for about $40
million in sales.
Despite that growth, those large corporate account sales
account for only 2 percent of corporate revenue, according to Li. The carrier
expects to grow that this year, both through new and existing accounts, corporate
sales project manager Siyang Wang said. The goal is to raise corporate accounts
to 3 percent of revenue in 2016.
That still is only a fraction of where the carrier would
like to be, and it aims to reach more than 100 corporate accounts in the next
five years, Siyang said. "I don't think this proportion is enough compared
with advanced airlines such as Delta or KLM, where their proportion may be
closer to 30 percent or 40 percent," Li said. "China Southern has
much to do in the future to get a similar result in terms of corporate
sales."
While China's corporate travel growth will be one
avenue—China passed
the United States as the biggest business travel spender last year and
remains one of the fastest-growing business travel markets in the world,
according to the Global Business Travel Association—the carrier also seeks to
broaden its recognition among travel buyers outside China.
As one strategy, China Southern will promote the size of its
network. It operates more than 670 aircraft, the fifth-largest fleet in the
world, and its passenger volume is the largest in Asia, according to Li. The
carrier also has seen significant international growth over the past few years,
he said. When it began service to Australia in 2009, for example, it flew only
seven weekly flights to Melbourne and Sydney. Now, it operates 60 flights a
week to Australia and New Zealand, according to vice president of marketing
Yunna Liu.
The carrier plans to add Toronto to its North American service
in December, Li said. It will join Los Angeles, San Francisco, Vancouver and
New York. Codeshares with Delta Air Lines, WestJet and Virgin America expand
its network to 66 destinations in the region, he said. Similarly, codeshares
with Air France, KLM, Aeroflot and Czech Airlines expand its network beyond its
routes to London, Amsterdam, Paris, Rome, Moscow, Frankfurt, Istanbul and St.
Petersburg, according to Li.
As another selling point to corporate clients, China
Southern also touts its safety record, Li said. In 2012, the carrier was the
first to receive the Civil Aviation Administration of China's Blue Sky Diamond Flight
Safety Award after logging 10 million hours of safe flight operations over
nearly a decade. It reached more than 15 million hours by the end of last year,
according to the carrier.