One of the biggest impacts of the coronavirus pandemic on the airline industry is that travelers have lost confidence. As an advertisement in an unprecedented period, the strategy of launching unlimited flight passes by Chinese Airlines was a success.
China Eastern Airlines, (CIAH) (CEA) China Express Airlines, Hainan Airlines, Spring Airlines and other airlines have successively launched similar products. Passengers can enjoy unlimited flights in the specified period of this year at a price around CYN 3000 (USD 430). Juneyao Air launched a similar times-unlimited upgrade card for CYN 888 (USD 115).
After the launch of unlimited flight pass, China Eastern Airlines (CIAH) (CEA) had its passenger load improved significantly, with an average rate of about 74% in the first two weekends.
This good business is actually small. The revenue of China Eastern Airlines (CIAH) (CEA) in 2019 is CYN 120.8 billion (USD 17.2 billion), while 100,000 sets of unlimited pass sold only for CYN3322 per set, with a revenue of more than CYN 300 million (USD42 million), counting just a small fraction of the annual income.
“The biggest impact of the pandemic on the airline industry is that travelers have lost confidence.” Li Hanming, founder of aviation consulting company Li & Li commented.
According to the travel willingness index of July released by CAPSE, the index increased significantly in July, 39% higher than that in June. In this regard, Li said the promotion is quite successful indeed – for those who have not yet bought it, their confidence has recovered a lot after seeing the first batch of travelers returned safely.
Li also believes that the sales of this unlimited pass have a strong pulling effect on promoting domestic demand in the travel industry. “If every weekend is a Saturday flight and Sunday return, it is equivalent to 1 Night accommodation + 2 to 3 meals at the destination, and each time it costs at least 200-300 yuan. On average, each user will fly 2-3 times this year, which further promotes consumption significantly. ”
However, with the increase in the actual use of the unlimited flight passes, negative comments also began to emerge. Main complaints including unable to book popular flights, purchases cannot be refunded, and flights cannot be re-booked.
At present, the first batch of “unlimited flights” products from China Eastern Airlines, (CIAH) (CEA) China Express Airlines and Hainan Airlines have been sold out, but more airlines will join the market in the near future.
(source: Caijing Magazine)