Economy

Markets

Industries

Insights

Reports

Events

Chinese airlines 'thriving' as members of Star Alliance

By Xing Dingding (Chian Daily)
Updated: 2008-12-16 07:20

China's airlines have improved significantly since joining a global network, an industry leader said in Chicago last week.

Special coverage: Coping with Financial Crisis Related readings:  Air China reports $454m of fuel hedging loss by October  Air China's third quarter loss hits 1.94b yuan  Air China, battling falling demand, puts M&A aside

"We have seen a huge evolution within Air China," Jaan Albrecht, CEO of the Star Alliance, said at a meeting of its member company chiefs held in the US city on Wednesday and Thursday.

"It's a result of them becoming members of the Star Alliance, and also because of the internal evolution of their leadership and decision making," he said.

Air China and Shanghai Airlines joined the global network in December of last year.

Zhang Lan, senior vice-president of Air China, said: "It has been a big challenge, but it has been beneficial to both Air China and the whole civil aviation industry of China."

In the past year, the nation's flag carrier has added a range of new services, including removing the need for passengers to recheck their baggage at transfer airports.

"Soon after we launched the service, other Chinese airlines saw it and looked at ways to launch similar products," Zhang said.

"So, in a way, it has been good for the whole industry."

Cooperation between member carriers has also been good for business, adding almost 1 billion yuan ($146 million) to the airline's revenue over the past year, she said.

"Air China's brand value has also surged from 23.5 billion yuan to 30.2 billion yuan," she said.

In the current economic climate, which has been hard on the global aviation industry, the alliance has been key to helping airlines survive, she said.

Membership of the Star Alliance is like "an extra coat against the economic winter", she said.

Albrecht said more and more airlines are seeing the benefits membership of the alliance brings and have applied to join.

"In difficult times, the benefits of the alliance are more evident than during good times," he said.

By acting as a central buyer for fuel, chairs and other items, the alliance helps airlines to cut their costs, Albrecht said.

Sharing the cost of such things as airport lounges can also help to reduce overheads, he said.

The Star Alliance currently has 24 members, with four others - Air India, Brussels Airlines, Continental Airlines and TAM - set to join soon. It operates more than 16,500 daily flights to 912 destinations in 159 countries.