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Flying 'roo in danger of becoming roadkill

Two weeks ago I sent an email to my contact at China Southern Airlines as part of the daily maintenance of nurturing future column material. Early this year I had written that Qantas long-haul international could disappear within 10 years. I was looking towards October, when a new frontal assault begins as China Southern launches daily flights on its ''Canton route'' to London in competition with the famed ''kangaroo route''. I underestimated the scale of this challenge.

China Southern may be obscure to most Australians and its base city, Guangzhou, is similarly unknown, but it is a force to be reckoned with. The day after my email was sent I was dispatched to the Chinese consulate for a visa, placed in a media study group and within days was on a flight to Guangzhou. Suddenly I was attending a banquet where a string quartet of young Chinese women in white gowns was playing Click Go the Shears. Surreal. The week before, the Premier, Barry O'Farrell, received similar treatment.

Call it soft power. With Chinese state-owned companies such as China Southern, it is impossible to know where company strategy ends and government policy begins. China Southern may be obscure in Australia now but it is the fourth-largest airline in the world in passengers carried. A few years ago Etihad was a very obscure name in Australia. Now people attend AFL games at Etihad Stadium and the brand is mainstream and respected. Ditto Emirates Airlines. Now these three carriers represent a collective mortal threat to Qantas international.

When I told the Herald's travel editor about the vortex of soft power and hard sell I was encountering, she said, ''No one is more aggressive in the Australian market than China Southern. No one.'' Nor does any airline have its latent muscle power. It is the biggest airline inside China, by far. It will carry more than 600,000 passengers into Australia this year. It is adding a new jet every week and will have a fleet of 500 by the year end. It will carry about 90 million passengers in 2012. Qantas and Jetstar will carry about 36 million.

China Southern plans to be bringing a million Chinese a year to Australia by 2020. With a leading domestic position but a modest international operation, it must expand outwards. Three years ago, the airline's president and chief executive, Tan Wan'geng, decided Australia was its No. 1 market for expansion. Since then, growth has exploded, with passenger numbers up 50 per cent, flights trebling from 14 to 42 a week, and Australian destinations increased from two to five with the announcement, last week, of a service to Cairns.

It was easy to see why the banquets I attended were thick with Australian tourism and airport officials falling over themselves to accommodate China Southern's ambitions.


Yet even these numbers do not explain the scale of the airline's ambition. It is about to embark on constructing Airline City, a 10-year project that will cost well over a billion dollars. The centrepiece will be the airline's own university. Imagine the feeding frenzy of bureaucrats, lawyers and environmentalists if a project like this were proposed in Australia. Which is why nothing like this is envisaged in Australia.

The head of the CSIRO, Megan Clark, just back from a visit to Beijing, says Australia is starting to lag in research, development and patent applications compared with East Asia. It is the mark of a nation not using enough of its brain.

The Chinese want to use brainpower, not just horsepower. I received a detailed briefing from Norbert Marx, the general manager of China Southern's maintenance joint venture, GAMECO, which is training engineers and mechanics at a rate of almost 400 a year. It will treble its maintenance capacity in Guangzhou by 2017. It intends to be one of the biggest aviation maintenance operations in the world, competing with Lufthansa Technik, where Marx was a senior executive. Qantas is a customer of GAMECO and it is impossible not to see Qantas outsourcing more maintenance to operations such as this. China Southern's ambition reflects Guangzhou's ambition. When the city government realised it needed a signature building to lift the generic skyline it built Canton Tower, the tallest tower in the world. Completed in 2010, it is twice the height of the Sydney Tower and almost twice the height of the Eiffel Tower. (This year it yielded its tallest title to the Tokyo Skytree.) I did not understand Guangzhou until I saw it from this tower, then I saw central planning on a massive scale.

As for the service on China Southern, was it up to the standard of Qantas and its peer group? No. Even the CEO, Mr Tan, was forthcoming on this: ''Our difficulty is service quality. There is much room for improvement. But we want to compete with Qantas on service quality.'' Was the service on my flights poor? No. China Southern's obvious advantage is cost. It is offering published round-trip fares to London of $1800 economy and $5800 business class, where it has almost flatbed seats. When the Boeing 787 comes into service to London it will lift comfort standards.

To support growth plans Guangzhou's new Baiyun International Airport is expanding from two runways to five. (Beijing Airport, being Beijing, has plans for nine runways.) In contrast, at one end of the Canton route, London Heathrow can't even build a third runway. At the other end, Sydney Airport is responding to the growth challenge with one hand tied behind its back, wrapped in red tape.

Correction: An incorrect reference to Sydney's lord mayor, Clover Moore, visiting China as a guest of China Southern has been removed.

Paul Sheehan travelled to Guangzhou last week as part of a media group hosted by China Southern Airlines.

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