China Southern to Perth.
 

our friends from the PRC & China Southern look set to start flights to Perth, interesting times.

http://www.ausbt.com.au/china-southe...n=home-flipper

CS has been quite aggressive in their pricing, eg: $600 return to HKG and other parts of Asia ($999 in premium economy), $1300 to YVR.

China Southern, used to be heavily rely on its domestic network, has been forced to take recent international expansion steps due to the increased competition with the high speed rail links in China, which seen CZ's flights/frequencies in the southern part of China either been cut or reduced.

The strategic move in expanding its international network which started 2 years ago were fast and aggressive, especially in Australia, and this could be the viable way to sustain its financial position.

Eyeing its home base (CAN) geographic location and the volume of the international through traffic at its neighouring hub, HKG, it is believing that CZ is trying to copy the similar business model of CX, which is hub & spoke in order to gain some market share from this sector. Chinese investment in the Mining sector in WA and growing student market could help on the point to point traffic as well.

However there are still few hurdles for CZ in the coming years. One is CAN is yet ready to compete with HKG as a hub, many facilities and services need to be upgraded or improved.

The other important part is its pricing strategies, which most of the Chinese carriers are lack of abilities setting its clear although they may have very ambtious long term plans. To the end, business is a business. No matter how comprehensive the network coverage in AU/NZ is, this is not going to warrant a healthy return but CZ may not care as it is truely governmental backed.

Well, at least another new tail at PER for spotting.