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Juneyao Air goes long-haul to Helsinki and Australia with B787
February 15th 2019
It is not easy for China’s new cohort of long-haul airlines to live in the shadows of the Mainland’s state-owned behemoths. Read More » Juneyao Air exemplifies this, but also proves to be the exception.
Juneyao will initially use its b787-9s internationally to Singapore from its home in Shanghai. Intercontinental services will commence on 28 June with a daily Shanghai Pudong-Helsinki service.
Helsinki has an out-sized presence of Chinese flights, but because of Finnair, which uses Helsinki as an efficient transit between Asia and Europe. Juneyao, a connecting partner of Star and an equity partner of SkyTeam’s China Eastern, is not expected to partner with oneworld’s Finnair. Besides that, Juneyao would likely gain far more than Finnair from a partnership.
Juneyao will have to sell Helsinki and greater Finland as a destination. It has not proved difficult to sell a quiet destination in Mainland travellers if there is savvy marketing -setting a Mandarin TV show in Finland, for example - and partnerships with tour agencies, albeit with a yield hit.
As is usual for Chinese long-haul routes, it will be easier to sell economy than premium cabins; Juneyao’s 324-seat B787-9 has 29 business seats in a 1-2-1 configuration and 295 economy seats in a 3-3-3 configuration. A spot check on commercially available fares show Juneyao selling economy at a slight discount to Finnair , CNY7,218 (US$1,066.2) versus CNY7,976. Business has a similar discount of CNY25,868 compared with the CNY27,892 fare offered by finnair. Year-round daily services may prove ambitious.
Under China’s one airline, one route policy, long-haul city-pairs are generally limited to seeing service from one airline. China Eastern serves most major European cities from Shanghai. Air China also serves a few which leaves Juneyao with limited available options.
It was thought Helsinki’s geography was a favourable factor for Juneyao because it was thought the privately controlled Shanghai carrier could operate the round trip in one 24-hour block, giving efficient aircraft utilisation on the route.
But when schedules were filed with China’s regulators, Juneyao opted for a longer Helsinki layover – or had to because of Pudong slots – and will need more than one aircraft to complete the rotation.
Where Juneyao should be able to achieve greater aircraft scheduling is between Shanghai and Australia. Juneyao is expected to receive the Shanghai-Melbourne/Sydney route authority held by Air China, which normally flies long-haul from Beijing but has a handful of long-haul flights out of Shanghai – much to China Eastern’s annoyance.
China Southern Airlines (CSA) was interested in the Shanghai to Melbourne and Sydney routes, according to a leaked airline presentation on Weibo. CSA is the largest Mainland airline operating into Australia, flying mostly from Guangzhou. Adding Australia services from Shanghai would have been a major victory.
CAAC route designation is a private process. But it cannot be ignored that Juneyao, despite cross-equity with China Eastern, is well regarded by Air China, which has tried multiple times to buy Juneyao. Industry sources said Air China was unprofitable on the Shanghai-Australia routes, but Juneyao’s delivery of long-haul aircraft provides Air China with the timing to exit its Australian destinations. .
It will be up to Juneyao to take on the China Eastern-Qantas joint venture that has a stranglehold on Shanghai-Australia. Probably, China Eastern and Qantas would rather contend with Juneyao than far larger CSA.
