The Chinese government has implemented a strategy for domestic carriers to expand into the African market.
China Southern Airlines has opened a 3X-weekly Guangzhou-Nairobi service, making it the only Chinese carrier to operate into Africa. However, other domestic carriers are expected to follow suit—earlier this year Air China announced plans to open two new routes from Beijing to Addis Ababa and Johannesburg in October.
China Southern is also scheduled to open new service from Guangzhou to Dubai and Cairo in June 2016.
In 2014, Hainan Airlines parent HNA Group invested in Kenya’s cargo carrier Astral Airlines and also plans to announce a new African route this year if everything goes well, it said.
China Southern chairman Si Xianmin noted Beijing’s policies—China-Africa Community of Destiny and China-Africa Regional Aviation Cooperation Plan—have brought historic opportunities for domestic carriers to explore the African market, which has huge potential. However, “owing to traffic rights’ restriction and Africa’s scattered passenger sources, it’s difficult for domestic carriers to report profit on Africa routes. Thus we need to increase more traffic rights and rely on Nairobi that is the hub for SkyTeam as our main hub in Africa to attract more passengers from neighboring countries,” he said.
Industry analysts point out that Chinese carriers also face severe challenges in the African market, which include backward infrastructure and higher MRO costs and fuel expenses.
As early as 2006, China Southern had opened a Beijing-Dubai-Lagos route, which was suspended in 2009 after the carrier suffered net losses of more than CNY400 million (64.3 million).