As more Chinese airlines win new routes to North America, it spells good news for destinations. With increased competition, US carriers have to lower fares to remain competitive. Similar to Americans, who prefer to fly on a US carrier for many reasons, Chinese travelers like the familiarity of Chinese carriers. This interesting article written by Harvard Zhang appeared in Medill Reports Chicago.
When Yan Wang flew with United Airlines from Shanghai to Chicago at the end of November, she found the flight attendants’ Mandarin very awkward. She also realized her “Chinglish” didn’t help the communication.
“I speak some English, but I found it hard sometimes to talk with their crew members,” said Wang, a 40-year-old Chinese doctor who was shopping at the Magnificent Mile after attending an academic seminar in Chicago. “I would rather fly with carriers of my own country if I had the choice.”
Responding to a perceived opportunity, China Eastern Airlines Corp., headquartered in Shanghai, will become the first Chinese carrier to initiate daily flights between Shanghai and Chicago starting March 18 of next year, expecting to bring more Chinese visitors to the Windy City and boost tourism revenues.
The Chinese state-owned company will compete with Chicago-based United Continental Holdings Inc., parent company of United Airlines, and Fort Worth, Texas-based American Airlines Group Inc., parent company of American Airlines, whose commercial aircrafts are flying the same route.
China Eastern revised its Shanghai-Chicago flight frequency to daily from three flights per week initially announced last month, aviation watchdog site Airlineroute.net reported last week. The non-stop flight on the Boeing 777-300ER will be China Eastern’s fifth gateway to the U.S. after Los Angeles, New York, San Francisco and Honolulu.
“China Eastern’s launching of Shanghai-Chicago route comes at the right time as China and the U.S. will initiate 2016 China-U.S. Tourism Year,” said Wendi Chen, spokesman for the Consulate General of China in Chicago, in an e-mail. “This will definitely facilitate cooperation in various fields and personnel exchanges between China and Chicago.”
Last year, the number of Chinese tourists to Chicago was estimated by the U.S. National Travel and Tourism Office at 133,000, up 4 percent from 2013. The number of Chinese travelers to the U.S. has had double-digit growth annually since 2010, according to a report by the U.S. Department of Commerce. A total of 2.2 million Chinese visitors came to the U.S. in 2014.
A growing middle class in China contributes to more Chinese businessmen and businesswomen, tourists and students coming to the U.S. The Chinese middle class — 109 million adults in total — outnumbered their 92 million American counterparts, and became the world’s largest in 2015 for the first time, according to an October global wealth report by Zurich, Switzerland-based financial services company Credit Suisse.
The U.S. and China also started offering each other’s citizens multiple-entry visas for up to 10 years in November 2014, making it easier for Chinese and U.S. travelers previously restricted to one-year visas.
Chinese visitors contributed a record-setting $24 billion to the U.S. in 2014 — about $66 million every day. Every Chinese traveler contributed $11,000 on average to the U.S. economy last year, thrusting China into second place in total visitor spending in 2014 behind only Canada.
To be sure, a stronger U.S. dollar and a weaker yuan seem to work against the booming tourism market. The Chinese currency stood at a four-year low of 6.43 against the U.S. dollar on Dec. 9 after China’s central bank allowed its currency to depreciate by nearly 2 percent against the U.S. dollar on August 11. This means Chinese tourists will face higher costs for their American experience.
But the U.S. still expects China to send 2.56 million visitors to the U.S. this year, 17 percent more than the 2.2 million in 2014, according to an October forecast by the National Travel and Tourism Office of the Department of Commerce. China is expected to see double-digit growth rates in the total number of travelers to the U.S. annually through 2020, beating all other countries.
China is expected to have double-digit growth rates in total number of travellers to the U.S. annually through 2020, beating all other countries. (Harvard Zhang/Medill)
Before leaving for China to attend a trade conference last month, Chicago Mayor Rahm Emanuel estimated that the new Shanghai-Chicago service would result in about $150 million-plus in economic benefit to the city.
At the same time, aviation experts predict China Eastern’s new operation likely will take away big corporate clients from United and American Airlines.
“China Eastern has a domestic network with flights to secondary cities in China like Wuhan and Dalian, which is attractive to U.S. corporations of all industries with businesses in inner China,” said Rohan Anand, who writes analysis for the frequent flyer travel blog site Upgrd.com. “China Eastern also has lower prices than United and American, a very important feature for many Chinese customers that are price sensitive.”
A round trip with China Eastern departing from Shanghai on March 18, 2016, to Chicago and returning three days later costs $710 for the lowest-price ticket including taxes, according to the airline’s booking website Wednesday. Passengers will have to pay $910 with United or $1,500 with American Airlines for the cheapest flights with almost the same itinerary.
“We vigorously compete on domestic and international routes with carriers across the globe,” American Airlines spokeswoman Leslie Scott said in an e-mail. “China is an extremely important part of our international network and is crucial for our future growth.”
United Airlines didn’t respond immediately to requests for comments.
For Hancong Gao, a 23-year-old Chinese graduate student in public policy at the University of Chicago, China Eastern’s new route gives her another option to travel back to her hometown Hangzhou, one hour from Shanghai on a high-speed train.
“I have very good impression of China Eastern because of good ticket price and quality services,” Gao said. “I’m so happy China Eastern launched this route. I’ll definitely consider it next time I go back home.”