British Airways Brings Chengdu Link to London

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Richard Maslen

Richard Maslen,
Editor, Routesonline

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British Airways Brings Chengdu Link to London

British Airways (BA) has announced plans to inaugurate a three times weekly link between London and the fast expanding Chinese city of Chengdu from September 22, 2013.  The introduction of the new route, which will be operated using a four-class Boeing 777-200ER, has been made possible by the additional slots at Heathrow Airport that the UK carrier now controls following the purchase of its former rival bmi British Midland International by its parent International Consolidated Airlines Group (IAG) earlier this year.

The UK, like most of Europe, has seen a significant increase in demand for air services to and from China over recent years, but network growth has been limited by capacity constraints at London Heathrow.  Although direct flights could have been introduced from other London airports, airlines have been reluctant to commit to services without access to the UK’s main international gateway as the recent story of China Southern Airlines highlights.

The Chinese carrier launched flights in June this year between its Baiyun International Airport base in the Chinese city of Guangzhou and London Heathrow, but only after an eight year process to secure slots at the UK airport.  The problem is that because Heathrow is classified as full, (operating at 99.2% of its permitted capacity), the Chinese carrier has been unable to secure suitable take-off and landing slots to enable it to launch the new route.

According to Heathrow Airport executives, the UK has missed out on trade, jobs and economic growth because of the existing cap on flights at London Heathrow.  In the meantime, China Southern opened a link to Paris, giving French companies an eight-year head start in building new trade links with China. 

While the UK added one new route to the world’s most important emerging market in 2012, its European competitors serve a further seven additional routes to China’s interior.  The main European hub airports of Paris CDG, Frankfurt or Amsterdam Schiphol boast direct flights to Chengdu, Hangzhou, Wuhan, Xiamen, Nanjing, Shenyang and Qingdao this year, in addition to flights to Guangzhou, Beijing and Shanghai, the only Chinese markets served directly from the UK.

The new BA link to Chengdu follows meeting between the carrier and airport and regional government officials in China during this year’s Routes Asia conference in the city.  In an exclusive interview with The HUB at the time of the event, one senior airport official confirmed that British Airways was among a list of ten major global carriers they hope to attract to Chengdu within the next three years with a particularly strong emphasis on the European market.

In the last decade air traffic at Chengdu’s Shuangliu International (CDIA) has grown almost five fold as the facility, the main access point into the Sichuan province of China, develops into one of the country’s major airports.  At the change of the Millennium, CDIA was handling a passenger throughput of 5.52 million, a figure that almost trebled to 13.89 million by 2005, an average annual increase of ten per cent. 

By 2010 this figure had almost doubled again to 25.80 million, a figure that ranked it as the fastest-growing airport in Central and Western China, and last year this grew to 29.07 million, a 12.7 per cent annual growth. in the past couple of weeks CDIA celebrated handling its 30 millionth passenger of 2012.  It is now the fifth largest airport in China behind Beijing Capital International, Guangzhou Baiyun, Shanghai Pudong and Shanghai Hongqiao.

The growth of CDIA is a major story but its management will not rest and they are working hard to add additional routes across the globe and position the facility as the major international hub for Central and Western China.  “We would like to build our network to economically developed areas in Europe, America, Australia, Asia and Africa in order to build a closer relationship with important air hubs worldwide,” Mr Yan Yuhua, manager aviation marketing department, CDIA, explained during the Routes Asia event.

Chengdu is currently linked to Europe via KLM Royal Dutch Airlines’ non-stop link to CDIA from Amsterdam Schiphol.  This was introduced in May 2006 and has been played an important role developing trade links into the continent.  The introduction of flights by Etihad Airways between Chengdu and Abu Dhabi in December 2011 - with onward offerings across its global network - has also helped boost business and leisure links between Chengdu and Europe and the arrival of Qatar Airways in March 2013, and now BA, will further enhance this situation.  It is also understood that Sichuan Airlines is planning to launch flights between Chengdu and Paris CDG from June 2013.

With a catchment population of 28 million people, Chengdu is one of the most important economic, transportation and communication hubs in western China and deemed among the top ten cities for investment out of 280 across the country.  Chengdu is the China’s western centre of logistics, commerce, finance, science and technology, as well as a hub for transportation, communication, manufacturing and agriculture. 

The city has a strong industrial base, including heavy manufacturing, aluminum smelting and chemicals.  Textiles are an important industry with cotton, wool milling and traditional manufacturing of silk and satin among the key business sectors.  The wider Sichuan Province is also home to one of the rarest animals – the giant panda and nature reserves have been established in and around Chengdu to protect the species, including the Sichuan Wolong Giant Panda Nature Reserve, the largest of its kind in the world.

To support the increasing demand and limit any potential strain on existing resources, CDIA is currently working on a enhancing its terminal facilities.  Work started on the T2 building in June 2009 and this will be completed next year, increasing annual capacity to 35 million passengers.  There are also plans to potentially add a third runway or even to construct a second airport in the city but these remain at the discussion stage and no planning approval has yet been granted for such projects.

“I have visited China on many occasions and last year went to Chengdu to see for myself the progress that has been made at the airport.  It is truly impressive and shows vision and ambition.  This new route demonstrates the importance of mainland China to British Airways and our commitment to grow our presence here.  Economic growth in China is continuing the outstrip that of most other countries,” said Willie Walsh, IAG chief executive officer at an event to formally announce the new route in Chengdu this week.

Europe is a key target region for CDIA and in the table below we highlight the largest O&D markets between Chengdu and the continent over the last five years.  Although the Netherlands currently has the only direct link to Chengdu, it was only the fourth largest O&D country market for bi-directional passengers in 2011 behind the UK, France and Germany, with sizeable O&D flows from Italy and Russia too. 

As the largest country market, the UK accounts for 23.4 per cent of the estimated 116,644 passengers that flew between Europe and Chengdu last year with notable flows from London Heathrow (approximately 14,000 passengers), Manchester (around 5,000 passengers) and Birmingham (about 3,000 travellers).

The figures show the changing the dynamics of travel in this market and the importance of hub airport connectivity.  In 2007, KLM’s first full year of flying to Chengdu, the Netherlands accounted for 38.1 per cent of the O&D demand to and from Europe.  However, this total has declined in each subsequent year as connection options have enabled more passengers to fly from other European points, via Amsterdam, leading to the UK subsequently becoming the largest for travel between Europe and Chengdu.

The arrival of Etihad Airways in Chengdu in late 2011 has also supported a growth in some European markets, particularly France, Germany and Italy.  In the first nine months of 2012 O&D demand between Europe and Chengdu was up 28.7 per cent on the same period in 2011, the previous record year.  Interestingly, Etihad Airways secured a 19.1 per cent share of the total O&D traffic in this period.

SCHEDULED O&D AIR PASSENGER DEMAND BETWEEN CHENGDU AND EUROPE (bi-directional O&D passengers)

Rank

Destination

Estimated O&D Demand

% Total 2011

% Total 2010

% Total 2009

% Total 2008

% Total 2007

1

United Kingdom

27,297

23.4 %

25.5 %

30.0 %

26.5 %

18.5 %

2

France

17,284

14.8 %

15.2 %

12.6 %

12.0 %

9.6 %

3

Germany

15,377

13.2 %

12.6 %

11.4 %

11.5 %

9.9 %

4

Netherlands

15,142

13.0 %

15.6 %

17.0 %

23.5 %

38.1 %

5

Italy

9,098

7.8 %

6.1 %

5.3 %

5.8 %

4.9 %

6

Russian Federation

8,097

6.9 %

5.3 %

4.0 %

3.0 %

2.0 %

7

Spain

4,010

3.4 %

3.4 %

2.7 %

2.7 %

2.3 %

8

Sweden

3,616

3.1 %

2.1 %

1.6 %

1.1 %

0.8 %

9

Switzerland

3,261

2.8 %

3.1 %

3.4 %

3.5 %

3.4 %

10

Denmark

1,990

1.7 %

1.6 %

1.7 %

1.0 %

1.8 %

TOTAL (Seat Capacity)

116,644

97,740

76,937

60,837

76,738

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