Airlines turn to non-travel revenue amid COVID

Onboard tours, online retailing, livestreaming ... carriers expand auxiliary businesses to compensate for pandemic impact

Chinese airlines have launched various innovative services to attract more consumers and add to their top lines as the domestic aviation sector continues to recover from the COVID-19 pandemic.

It is less than half a year before the A380 aircraft model of China Southern Airlines is fully retired, and the airline has launched events to invite consumers to visit the aircraft. The carrier sells tickets through its official apps and livestreaming sessions, where Chinese consumers are increasingly enticed to spend money amid promotions.

It costs 1,099 yuan ($164) per adult or 1,999 yuan for an adult and accompanying child to take a day trip to Guangzhou Baiyun International Airport and visit the double-decker A380, the world's largest commercial aircraft. European aircraft maker Airbus has announced it will no longer manufacture the model.

A visit to one of the A380 jets includes an introductory session, high-end boarding processes at the airport, lunch at a high-end lounge and visits to the tarmac and the aircraft, according to China Southern.

Guangzhou-based China Southern have introduced five A380 aircraft since 2011, and it has been the only domestic carrier that owns the model. The five A380s are each equipped with 506 seats. In February, two A380s of China Southern were retired, and the remaining three will be put out to pasture by the end of the year, according to the company.

"It is worthy of support and encouragement that airlines take innovative measures to attract consumers. Holding diverse activities helps build customer loyalty and stickiness, which can then stimulate flight ticket sales," said Yu Zhanfu, partner and vice-president of the China unit at consultancy Roland Berger.

Since the outbreak of the pandemic, China Southern has used A380 aircraft to provide international flights, including routes that connect Guangzhou, Guangdong province, and Los Angeles; Guangzhou and Sydney; and Guangzhou and Melbourne to transport more passengers when there were fewer international flights available.

Meanwhile, the carrier said it plans to further expand its business operations in areas such as online retailing, online travel platforms and hotel bookings, indicating the company's goal to expand its auxiliary businesses besides air travel, according to the company's statement released in June.

China Southern has already provided its internal French language training courses to the public, and those include face-to-face classes and livestreaming courses online. Instructors of the courses are language teachers of foreign flight assistants for the airline.

For French beginners, it costs 800 yuan to take physical classes for 20 class hours and 500 yuan to take online classes of the same length. Offline classes take place at a new training base of China Southern in Guangzhou, the company said.

The carrier said the French language courses provide systematic training on pronunciation rules and skills, and the most basic and commonly used vocabulary and short sentences in daily life are featured. The courses will also introduce the history and culture of Francophone countries.

In addition to fulfilling demand for flight training, cabin service, maintenance and sales, China Southern said the new training base will be helpful for the company to transform its training services into a more business-oriented model and integrate more with third-party markets.

For instance, the training base also provides etiquette training and emergency medical services training for the public. It also provides high-end services training for people who work at companies of menswear brands, especially for major salespeople and mid-level management personnel.

In addition, since the outbreak of the pandemic, a growing number of domestic carriers have been holding livestreaming sessions to sell flight tickets, tourism packages, derivative products and cosmetics, as they aim to hedge against declining passenger numbers and gain additional revenue.

For instance, Hainan Airlines, China's fourth-largest commercial carrier, began selling makeup and skincare products through livestreaming sessions last year. Shanghai-based Juneyao Airlines held livestreaming sessions that featured simulated flights by recreating cockpit conditions of a commercial flight to popularize aviation knowledge and better interact with viewers.

"Selling products during livestreaming sessions will constitute a relatively small portion of auxiliary income for carriers. More importantly, holding livestreaming sessions can help airlines gain more exposure and attention from viewers, and thus promote their brand reputation and drive potential sales growth of flight ticket bookings," Yu said.

Earlier, affected by the pandemic and declining passenger numbers, some carriers such as Xiamen Airlines and Sichuan Airlines, which have been known for their high-quality in-flight meals, launched services to deliver in-flight meals and group meals for individuals and companies, and thus provide services for wider groups of consumers. For a period of time, Sichuan Airlines delivered options of hotpot sets. The sets included hotpot ingredients, soups, seasonings and disposable dinnerware.

In late 2020, Eastern Air Catering, the in-air food supplier of Shanghai-based China Eastern Airlines, delivered boxed foods to companies, medical staff and people undergoing quarantine in Shanghai to gain extra revenue. The company also sold boxed foods at chain supermarket G-Super in Shanghai－the first time that an air-catering firm sold food in supermarkets in China.

In the first half of this year, with resurgences of local cases of COVID-19 in some parts of the country and the number of commercial flights operated daily on the decline, many carriers shifted their focus to the air cargo business, a critical category for the aviation sector during the sluggish travel periods during the pandemic.

Haikou-based conglomerate HNA Group said in the first four months of this year, the airfreight business of its affiliated airlines witnessed a booming performance. From January to April, HNA's cargo business revenue rose 28 percent year-on-year, and net profit surged 150 percent, according to the company.

In the first quarter, the logistics unit of China Eastern achieved a net profit of 1.37 billion yuan, surging over 102 percent, the company said.

With the arrival of summer, the domestic air travel market is expanding with growing demand as local COVID-19 cases have been brought under better control. And airlines have launched promotions to sell flight tickets.

This summer, the number of people traveling is expected to resume to more than 70 percent of the level recorded in the summer of 2019, when there was no pandemic, said Tongcheng Travel, a Suzhou-based online travel agency.