Hainan Airlines To Fly Oslo - First Step Forward
Norway is the largest western European country without a flight to China, and is the smallest of western European countries with flights to Asia. Its only destination is Bangkok. Flights to Bangkok are operated by both Star Alliance member Thai Airways and European Ultra Low Cost Carrier Norwegian.
The local (Multi-)national carrier SAS had previously operated flights to Bangkok out of Copenhagen but decided to drop service altogether to shift focus on the US long haul market only.
Norway is a wealthy outward tourism country, perhaps the wealthiest out of all of Europe. Its national industries desires great air cargo transportation capability on exporting those world renowned seafood(salmon) and abundant natural resources (oil). Besides the strong outbound travel population, the country’s natural sceneries(fjords, northern light) can sufficiently attract all year round tourism as well not to mention its extreme and winter sports industries.
If any airline want to capture growth and gain market share nowadays, China can never be ignored. Due to sensitive issues like the Nobel Prize dissident before, relationship between Norway and China didn’t become normalised until earlier this year.
Comparing with Norway’s nordic neighbours: Finnair had launched direct flights to 6 cities(Beijing, Shanghai, Guangzhou, Chongqing, Xi’an, Nanjing) in mainland China and it’s still expanding; Both Stockholm and Copenhagen has direct flights to China(including Hong Kong) operated by SAS, Air China and Capital Air (Subsidiary of Hainan Airlines); even small Iceland had experienced spikes of Chinese tourists.
SAS had always favoured Stockholm and Copenhagen over Oslo when comes to long haul network expansion, perhaps due to the relatively higher costs of operation in Norway, but Norway is not a market that can be fully absorbed or replaced with alternatives, the need for Norway to secure direct flights to China not only lies in the national interests but also the “peer” pressure lies upon competition with its Scandinavian counterparts.
Home Growth With Home Carriers?
With likely the highest operating costs in the world, SAS today has become somewhat of a boutique airline where it can no longer using its hubs to filling more seats with connecting passengers, and possibility for it to grow it’s relatively low and their main business objective has shift to maximise efficiency on its already established route networks. Possibility for SAS to operate one extra route from Oslo to China is highly unlikely after its launch of the route from Stockholm to Hong Kong to complement its flights to Asia(Beijing, Shanghai, Tokyo) out of Copenhagen.
Other than SAS, Norway has another national carrier(sort of) that has been causing great disturbance all over the airline industry throughout it’s existence. Famously said by its CEO Bjørn Kjos:“go big or go home” during a TV interview on CNN, Norwegian has always considered China as its growth engine. As the so-called world's next great budget airline, the problem for Norwegian flying from Oslo to China it’s not whether but rather when.
After numerous attempts by Norwegian to break the “outdated” and somewhat “discriminating” 1956 agreement between Scandinavia and Soviet Union which make SAS the only carrier can fly the Siberian Corridor to Asia. Lastest round of negotiation just happened in 9th November this year in Oslo has been confirmed to be unfortunately failed, Norwegian had planned to actually start flights from Tromso to Beijing, Shanghai and Tokyo and as well as flights from Stockholm, Denmark to other destinations in China, India and Thailand etc. to provide more passengers access to Norway’s winter tourism destination.
However, none of those will be realised in the short run unless Norwegian can gain access to fly the Siberian Corridor. It’s possible for Oslo to get flights in the long run to China which can be operated by one of their two home carriers, as for the midterm goal to allow more Asian tourism population reach Norway is depending on Chinese carriers.
Speaking of the “Angle” - Hainan Airlines To Fly Oslo
45 out of a total of 98 airports in Norway is operated by the government owned Avinor company, Oslo Gardemoen is the biggest airport in Norway which function as the gateway to the rest of Norway, in addition, the city of Oslo itself has a strong corporate and leisure traveler base both outbound and inbound. As of earlier this year, the new management team at Oslo has been expressing its eagerness to regain more initiative in Asia.Previous industry reports has been suggesting that Hainan Airlines would be a suitable candidate carrier, this has been confirmed by their application sent to CAAC a week ago which states the following routes:
From April 2018, Beijing - Oslo return, A330/B787, 3 times weekly,
From May 2018, Shenzhen - Oslo return, A330/B787, twice weekly.
Other than Beijing, Shenzhen is an interesting route in China to launch inter-continental flights with, and this also leads to the uniqueness of Hainan Airlines.
Hainan Airlines is not traditionally a national carrier of China, its hub airports are on the island of Hainan. As of today, it officially call Beijing its base airport which they have been launching numerous long haul fights to compete for market share with the big 3 - Air China, China Eastern and China Southern. In many ways, China has a special rule of only allowing one domestic carrier to operate one city pair of international long haul flights, this means that Hainan can not operate traditional tier one city pair for example Beijing - Los Angeles or Shanghai - Amsterdam, instead, many never-before-heard routes has been launched like Changsha - Los Angeles, Beijing - Prague or Shanghai - Seattle. Its city pair would choose to operate from one tier one airport like New York or Beijing to a second tier airport like Changsha or Prague.
For the situation with Shenzhen, it’s interestingly more strategic for Hainan to do so. Shenzhen, the city itself like many other Chinese mega cites, it’s unheard of by many people. Utilised on its unique approximation to Hong Kong, it has now gained the title of the Silicon Valley of China, and the city’s dozen millions population all comes from the rural area 20 years ago. It today has the 6th biggest commercial aviation market in China, and its long haul network hasn't been officially authorised by officials until a few years back, thus the current hub carrier of Shenzhen - Shenzhen Airlines - A star alliance member(Subsidiary of Air China) is facing the situation with no wide body planes to fly in the short term, so airlines like Hainan is gaming on the unique situation to take over as many routes as possible, even means that they are serving it with relatively low frequencies. So rather than Shanghai or Guangzhou, the city pair of Shenzhen - Oslo wouldn’t seems to be so strange after all.
Operating unconventional routes is not the only special characteristic feature of Hainan. It’s holding company - HNA group has also been doing uncommon market practices with its high-profile mergers and acquisitions. As of today, the HNA group owns major hotel chains like Carlson Hotels groups, it has 25% stockholding in Hilton hotel groups and owns 100% of Swissport and Gate Gourmet and many more.
For many of us frequent travellers, Hainan airlines currently has their own FFP(frequent flyer programmes) called fortune wings club, although they don't belong to any airline alliances, their partnership with Alaska Airlines can be a highly valuable option as you can register miles through Alaska’s MVP program which allows amazing redemption opportunities to first class products on airlines like Emirates and Cathay Pacific.
First Step Forward
China has enormous opportunities in the future for any airline who want to adapt and grow, and for the Norwegian commercial aviation market to sufficiently nurture and expand not only for its carriers but also for one of the most advanced aviation markets in the world to continue to integrate, Hainan Airlines route application is just the beginning of a new chapter, with hope that the CAAC will grant their permission to start fly those routes shortly. I just want to say that first step is always the hardest, one step forward but fingers crossed not two steps back.
I would like to hear your thoughts on the situation and the possible players you want to see in the field. Leave a comment below or maybe share it with your friends on social media.
Stay tuned.
