AFRICA TO CHINA: A BOUYANT MARKET
South African Airways does not currently operate any non-stop services to China and such service seems long overdue. Other leading African carriers do operate services into China, with Kenya Airways operating a four-times weekly service from Bangkok to Guangzhou which originates in Nairobi, whilst Ethiopian Airlines serves Beijing and Guangzhou on a daily basis, its Beijing service operating via Delhi and Guangzhou via Bangkok.
There is limited non-stop services between the African continent and China illustrated by IATA BSP data (Airport IS). Between September 2009 and September 2010 nearly 1 million O+D passengers flew between Africa and China despite the lack of non-stop traffic.
LOSING OUT TO THE GULF CARRIERS
South African Airways has also lost out to the Gulf carriers who have been the main beneficiaries of the lack of non-stop service between China and Africa, with Emirates having a 25% share of the one million passengers, Etihad 18% and Egyptair an 11% share, largely on the back of its services to Guangzhou and Beijing. The Star Alliance partner of South African Airways serves Beijing non-stop from Cairo with Guangzhou operated via Bangkok.
Securing suitable slots at Beijing could be an issue for South African Airways, however with the dominant carrier in Beijing also being a Star Alliance member in the shape of Air China, this obstacle may well be overcome and importantly South African will benefit from extensive connectivity in Beijing. Air China has a 40% share of all scheduled traffic in Beijing compared with the second largest operator, SkyTeam member China Southern, which has a 16% share of all scheduled flights.
It is clear, however, that there is demand for service from South Africa to China with over 129,000 passengers travelling between the two countries between September 2009 and September 2010 with over 30,000 O+D passengers travelling between Johannesburg and Beijing.
For Chinese originating passengers, South African’s regional network will be of importance. With so much investment in Africa by state run Chinese companies there will be plenty of passengers for SAA to compete for. With a codeshare agreement between South African and Air China which will allow access to countries such as Angola, Zambia and Zimbabwe, South African should not find new services difficult to fill.
The Chinese government has estimated that investment in Africa is set to top 100 billion USD with a particular focus in investment in mines and factories.
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