BA looks East to avoid turbulence

British Airway (BA), one of the few major airlines still making profits, has long focused mainly on the US and the European Union but is starting to pay more attention to China, one of the few air passenger markets seeing turnover continue to grow during the global economic slowdown.

"China is in the heart of our strategy," said Kevin McQuillan, regional general manager of British Airways Far East, during his recent visit to China.

China is the most encouraging market and business in the country and was better than other regions that BA operates in, such as South Korea, Japan and the Philippines, he said.

BA outperformed most other airlines in 2008 (many posted losses) but the number of passengers it transported globally only grew incrementally. And the company saw passengers numbers start to drop in the quarter from January to March 2009.

BA's revenue in China for the 2008 financial year was up 1 to 2 percent year-on-year.

McQuillan predicts the downward trend for BA's global business will continue for a few months before possibly bouncing back.

China will likely be the quickest region to recover, he said.

BA has flown in and out of the country since 1980 and now has 33 flights a week from Beijing, Shanghai and Hong Kong to London but the company's Chinese operations are overshadowed by those of other European carriers, such as Lufthansa and Air-France KLM.

McQuillan agreed there is room to grow, and that China is not just a business growth opportunity but a bulwark that could offset losses in the US and Europe.

Since late last year, BA has rolled out a series of measures to boost its China business, such as sales promotions and mobile phone check-in service tailored for the Chinese market.

BA China plans to focus more on the business travel market, which generates higher profit margins than the individual or leisure markets. The company launched promotions aimed at China's small- and mediumd-sized enterprises in late March.

BA also added another level to its business class fares, targeting corporate clients whose travel budgets have shrunken during the global economic downturn, said McQuillan.

A similar earlier move, when the company introduced a fourth class for passengers, premium economy, appeared to boost sales.

(China Daily 04/27/2009 page9)