On November 17， 2014， Liu Shaoyong， general manger of China Eastern Air Holding Co. and board chairman of China Eastern Airlines Corp.， Ltd.， signed an agreement with Alan Joyce， CEO of Qantas Airways Ltd. in Australias capital Canberra， aiming at ramping up cooperation in the co-marketing and airport services on the flight course from China to Australia.

The signing was witnessed by Xi Jinping and Campbell Newman， top leaders of the two countries.

Under the agreement， the two giants will carry out the deep cooperation on the flight courses of Shanghai-Sydney， Shanghai-Melbourne and Beijing-Nanjing-Sydney etc.， providing passengers with more abundant airline products and flight choices. Besides， they will share costs and benefits.

The agreement is still pending approval from the aviation watchdog. Once approved， the two parties are expected to jointly operate the Sino-Australian flight courses by the middle of this year with a valid term of five years.

Code-sharing

Since 2008， the CEA and Qantas Airways have provided each other with the code-sharing service. A code-share flight is a commercial flight that is marketed by two airlines， but operated by one of them.

Fast forward to 2013， the CEA achieved the trunk line code-sharing service with Qantas Airway， based on the previous sub-line code-sharing service.

According to the mutual agreement， there are seven direct flights operated by Qantas Airway and 17 direct flights operated by the CEA per week， flying toward destinations including Sydney and Melbourne in Australia， as well as Shanghai， Nanjing and Beijing in China.

“The two airlines trunk line code sharing underscores their complementary advantages on the networks and passenger resources between the two countries in low and peak seasons， which are still expanding，” says Kathy Zhang， General Manager Oceania for the CEA.

“Expanding the scope of code-sharing service is one of measures by the CEA for the expansion of its Australia market. In addition to reducing operating costs and enhancing competitiveness， it also provides passengers with more convenient and abundant service. ”

Zhang says that as the CEA and Qantas Airways advantages lie in the Chinese market and Australia market respectively， their sub-line and truck-line code-sharing services not only offer convenience to passengers， but also help them increase their market share in each others market.

More Opportunities

Australia is one of Chinas most important personnel exchanges destinations and trade markets， while China is Australias second largest inbound tourist source market， following New Zealand， as well as Australias fastest-growing and most valuable overseas tourism market.

More importantly， Chinese travelers are the most ostentatious travelers among foreign visitors， with an average trip cost of A$7，418 per person. According to statistics， the number of Chinese travelers to Australia in 2014 was nearly 700，000， up 15% from the same period in 2013. Over the past four years， the number of Chinese travelers to Australia has doubled.

It is reported that over the past year， Chinese travelers helped Australias main airport offset ill effects of a slowdown in the domestic passenger growth. The market expects that the number of Chinese travelers to Australia will see an annual growth rate of 8.4% in the next five years.

China has become Australias fastest-growing market and most valuable tourism market. Besides， with data showing that tourists from the Chinese mainland contributed nearly A$4 billion revenue for Australia， China is also Australias tourist strategic priority development market.

“The CEA attaches great importance to the Sino-Australian flight routes. In order to make passengers trip get better， we are also trying to improve the service level and tastes，” says Zhang.

The CEA adopts the latest model A330-200 as its flight type for Sino-Australian routes， which provides fully flat chair seats for the business class cabins and multilingual entertainment system for the passenger cabins. The passengers in business class cabins flying from Australia can enjoy cuisines provided by Golden Century Seafood Restaurant， Sydneys most famous Chinese restaurant， as well as Australias famous wines.

In addition， for CEA passengers flying from Sydney， Melbourne and Keynes to Shanghai， if they want to fly to other places after arriving in Shanghai and their subsequent flight is scheduled to fly on the same day， they can obtain two boarding passes when checking in at the airport， so that they are free from the bother of claiming the luggage in the midway， as their luggage will be directly carried to the final destination.

The CEA business class passengers flying from Australia to Shanghai can enjoy the limousine service for free in Shanghai， which needs booking in advance. The CEA also offers one-night hotel stay and pick-up service for all passengers in the Shanghai airport who wait for the subsequent flight.

For passengers who hold an Australian or a New Zealand passport， if they have an itinerary certificate that allows them to continue the journey， they will be allowed to stay in Shanghai for up to 72 hours.

Qantas Airways also plans to change its flight destination to the T1 Terminal in the Shanghai Pudong Airport， which will save one-hour transit time for passengers.

According to the latest data， the number of passengers from Australia to China transported by the CEA topped 200，000 in 2014， showing a healthy growth trend with the load factor up more than ten percentage points from a year earlier.

By far， Sino-Australian FTA substantive negotiations have been finalized. “In the long run， the two countries will brace for more exchanges and investment， which is the development trend for both of them in the future. However， there is still a long way to go for the formal implementation of the agreement，” says Zhang.

She believes more supporting measures should be rolled out in the short term. For example， Chinese business travelers now call for a 5-years or even 10-years multiple entry visa， as the current three-year multiple entry visa released by the Australian government is still not enough convenient.

Closer Sino-Australian Relationship

In fact， the CEA has a long history of cooperation with Qantas Airways. Besides the code-sharing cooperation on the Sino-Australian flight courses， they established a joint venture named Jetstar Hong Kong.

“The signing of joint operation on the flight courses from China to Australia marks a deeper business cooperation between CEA and Qantas Airway，” says Zhang.

She adds that Qantas Airways is one of CEAs best partners. The two airline juggernauts will enhance their cooperation in co-marking， further expanding the development space of the aviation market of north-south hemispheres.

According to Zhang， the CEA is planning to increase flight frequency or open a new route to enhance the airline capacity for its Australian market. The number of passengers flying between Australia and China sees an annual average growth of 10% to 12%. However， there is an obvious differ- ence between low and peak seasons.

Besides， the growth rate of investment injected for the overall airline capacity is higher than that of the market. Consequently， some Chinese airlines have to cut flights， which is not conducive to the steady development of airlines and the cultivation of loyal customers. Therefore， Zhang suggests that the CEA should first step up efforts to increase its passenger load factor in the low seasons.

“It is foreseeable that the coming decade will be the golden age of Chinese long-distance aviation industry，” says Zhang. “As an Asia-Pacific country same with China， Australia is only 10-hour flight away from China with a 2-hour time difference， which is a congenital advantage for the personnel exchanges between the two countries.”