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A new shortcut from Europe to Australia---

China Southern Airlines (CSN) released its " Canton Route" strategy

August 15, Guangzhou. Today, CSN held a press conference in Guangzhou, officially launching its air bridge connecting Europe, Asia and Australia--"Canton Route”. This is a new milestone for CSN in its internationalization-strategy transformation direction, marking a significant step forward to build CSN international aviation hub and actively participate in global competition.

In the conference, CSN signed a strategic cooperation agreement with Australia's five largest tourism administrations e.g. Tourism Australia, the four major airports i.e. Perth, Brisbane, Melbourne, Sydney airports and Guangzhou Baiyun Airport, pushing cooperative building of "Canton Route". A "Canton Route" international symposium was also held to produce ideas and proposals for future development.

Three years of efforts leading to the promising "Canton Route"

In 2005, China’s largest airlines CSN introduced the strategic transformation goals of building an international large - scale network-type airlines. In 2009, CSN paid its attention to the 6th Freedom of the Air market, and put Australia transfer as the first step for strategy implementation.

Australia and Europe have a long history of frequent exchanges, with the annual travelers more than 5 million. However, as the two places is distantly spaced, the trip must have a stopover point for "leapfrogging", thus leading to the famous "Kangaroo Route”. More than 20 airlines have operated in this market for multiple years including Singapore Airlines, Cathay Pacific Airways, Australian Qantas, Emirates and British Airways, forming old hubs e.g. Singapore, Hong Kong, Bangkok and emerging hubs e.g. Dubai, Doha , Abu Dhabi.

China Southern Airlines is based on Guangzhou in the south of China and adjacent to Southeast Asia. Guangzhou has the shortest flying distance in China to Australia and New Zealand. Passengers to Australia via Guangzhou have the lowest deviation rate and 2 hours saved compared to transfer via Beijing or Shanghai.   On the other hand, Guangzhou is in the middle of Europe and Oceania, it has the same deviation rate with Hong Kong and Singapore. Its unique location and balanced flying time provide the excellent conditions to develop the 6th Freedom of the Air and make itself a very good transfer point.

Therefore, CSN takes Australia as the most important overseas market, and establishes the strategy of first developing Australian transfer and then linking Europe and Oceania around the hub of Guangzhou.

In the past three years, CSN’s capacity input in the Australia and New Zealand region has seen an annual growth of 50% or more. In 2009 there were only 14 flights per week and 2 navigation points, but now it has developed to a weekly maximum of 42 flights and 5 navigation points i.e. Auckland, Sydney, Perth, Brisbane, Melbourne.

With the rapid growth of capacity input, CSN accelerated the building of Guangzhou Hub, improved transfer service processes and mustered the whole company’s resources to develop a robust route-network advantages in China and Southeast Asia, linking Guangzhou to 97 cities across China and increasing the weekly transfer opportunities from 14811 in 2009 summer and autumn to 24222 in the same period of this year. In promoting transfer via Australia, CSN accumulated precious experiences in a number of areas e.g. hub building, transfer services, development of the 6th Freedom of the Air market, promotion of international routes.

Located within the vast economy of mainland China, the CSN Australia transfer strategy has achievement effective advance for the 3 years. In the first half of 2012, CSN transported 306,800 passengers in the Australia and New Zealand market, increasing by 28.4% year-on-year. CSN passengers already take up 45% of the market between China to Australia and New Zealand. CSN has grown to the largest air carrier in the China-Australia market and Guangzhou has become the No.1 portal from China to Oceania. Passengers transferred via Guangzhou to Australia and New Zealand rise from 148,000 in 2010 to 343,000 in 2011.

The success of Australia transfer business made CSN more confident and resolute to develop the 6th Freedom of the Air market and build Guangzhou into a more international hub. In January this year, CSN successfully sponsored Sydney Festival---the most important cultural event in the southern hemisphere, and for the first time put forward the “Canton Route” concept linking Australia and Europe, making Guangzhou a perfect hub for transfer.

In June 6, 2012, CSN opened the Guangzhou-London route, adding to the existing routes from Guangzhou to Paris and Amsterdam and from Guangzhou to Sydney, Melbourne, Auckland, Brisbane, Perth etc. in Oceania, which in the global map form two beautiful fans. The CSN European fan route network and Oceania network joins at Guangzhou Hub, cooperating with each other to create “Canton Route”.

Partnership with Europe, Australia and

New Zealand make “Canton Route” flying higher

The fast growth of CSN in Australia, New Zealand and Europe as well as the vibrant Chinese market received strong support from governments, tourism administrations and airports in various places. The “Canton Route” strategy is an upgrade and expansion of the CSN Australia Strategy, which deepens the CSN international transfer hub strategy. The launching of “Canton Route” is only a start. In the next, CSN will strengthen cooperation with governments, tourism administrations and airports in Europe, Australia and New Zealand, steadily pushing the building of “Canton Route”. CSN concluded a strategic cooperation agreement with Tourism Australia and set up headquarter-level cooperation with tourism administrations and airport in various Australian states. Tourism Australia and relevant airport units all made the commitment to conduct international cooperative marketing in CSN passenger markets and jointly promote the growth of “Canton Route”.

In 2011, CSN opened routes to Auckland , Amsterdam , Vancouver , Perth , Istanbul etc. in succession, increased flights to Sydney, Melbourne and Los Angeles. The investment percentage in international routes jumps from 17% in 2009 to 26.8% in 2011.

As for the Australia and New Zealand market, CSN will open the Guangzhou-Cairns route and raise the flight frequency of existing routes to Sydney, Perth, Brisbane, Melbourne etc. this year. It is expected that by the end of 2015, CSN flights in Australia will exceed 110 with more flights in Southeast Asia, which will indefinitely draw more European travelers to choose Guangzhou as their transfer point to Australia, New Zealand and Southeast Asia.

In the European region, CSN Guangzhou-London route will be more busy with 1 flight per day in the winter and spring seasons. CSN flights from Guangzhou Hub to European destinations will reach 21 per week. Meanwhile, depending on the SkyTeam Alliance route network, passengers after arriving at Europe can easily transfer to a number of major cities e.g. Milan, Berlin , Frankfurt and etc.

By 2012, the percentage of CSN international routes will be 30%, meaning a good route network and more time-saving & convenient  “Canton Route”, offering rich options for travelers. In October this year, CSN will adopt the world’s most luxurious A380 to operate the Guangzhou-Los Angeles route, investing new experiences in “Canton Route”. CSN will also expand the coverage of Southeast Asia and South Asia markets, and realize smooth transfer from these advantageous markets to North America, Japan, South Korea, Central Asia markets, further enhancing the international competitiveness and radiation influence of Guangzhou Hub.

By then, ”Canton Route” basing on Guangzhou Hub will effectively link the fan network to Australia and New Zealand with that to Europe forming a picture like a taking-off eagle overlooking three continents. The Guangzhou Hub and CSN internationalization course will be more consolidated.

Building a comprehensive

international hub, with the help of Baiyun Airport

The 6th Freedom, also called bridge right, is the right to carry passengers or cargo from a second country to a third country by stopping in one's own country. China Southern Airlines will deliver passengers from United Kingdom to Australia via Guangzhou such as London-Sydney-Guangzhou. With the development of internationalization of aviation, the relationship between domestic and international markets has been much closer. The 6th Freedom of the Air market is huge with large number of high-end tourists, which is an important source of international airlines to strengthen themselves.

In addition to the comprehensive air route network, a big hub airport shall also be the support of attracting international travelers to transfer in Guangzhou, which is also the basis and key point of building “Canton Route” in China Southern Airlines. In recent years, with the assistance of Guangzhou Baiyun Airport and combined inspection departments such as the customs and frontier defense, China Southern Airlines has greatly enhanced the transportation hub construction of Guangzhou. Multilevel communication and coordination mechanisms have been established in China Southern Airlines and Baiyun Airport, which has ensured the direct contact all the time, promoted and implemented all the work effectively and then achieved good results.

Currently, in Guangzhou Baiyun Airport, China Southern Airlines is the only company offering the comprehensive transfer service with four orientations including transit of domestic to domestic, transit of domestic to international, transit of international to domestic and transit of international to international.

Directions of the cooperation between the two sides include improving transfer process, meeting demands of transfers in transit of domestic to international, transit of international to domestic and transit of international to international, constantly optimizing the international transfer process and offering passengers the perfect transfer experience. Therefore, services of China Southern Airlines have been enhanced in an all round level in flight design, transfer instruction, transfer service, counter service, transfer lounges, Accommodation for transit passengers, combined inspection service, duty free shopping, etc. Currently, transfers of China Southern Airlines in Guangzhou hub may enjoy ten services including “check through to final destination, through check-in” or “international transfer, dedicated channels”. China Southern Airlines has also established additional transfer corridors, optimized the transfer logo, set up additional transfer service counters, established rest areas for international transfers, overnight stay and baggage services of transfer, improved the transfer service process constantly and enhanced the transfer efficiency. This year, China Southern Airlines has built the rest area with more than 1500 square meters for distinguished international passengers at the Guangzhou airport; the service of “Through Check-in” as well as measures such as secondary security check-free for transfers of  the 6th Freedom has been put into practice. All this enables the smoother and faster transfer.

At the same time, China Southern Airlines has implement the “information of connecting flight connecting to the cabin”, with London route as the pilot. 50 minutes before the flight landed, passengers with transfer time less than 2 hours may be timely informed the transfer flights, including flight number, destination, departure time, boarding gate, on time or not, etc. This pattern is expected to be promoted into other transfer routes.

After a series of efforts, except for the Asians, there are more and more westerners in Australia to Europe routes. In the first half year of this year, there are 32,000 transfers in Oceania-Europe's 6th Freedom operated by China Southern Airlines, which is 16 times of that in 2009. Meanwhile, proportion of transfers in Australia route has been more than 50%, which has reached the level of large network-based airlines in hub construction. China Southern Airlines will also engage in getting the more favorable Visa-free policy with the help of Baiyun Airport.

Phased results have been achieved while China Southern Airlines entering the Europe-Oceania 6th Freedom market, which show that CSN has realized the preliminary transformation from traditional point-to-point mode of operation to network-based hub operation mode. CSN has the capability to attracting international transfers heading to the third country via domestic hub and gradually enter into the competition between international airlines.

According to the recently-issued “Several Points on Promoting the Development of Civil Aviation by State Council”, China has stated clearly that the Guangzhou Airport shall be constructed into a large international air hub with full functions and world-wide coverage. Currently, the expansion project of Baiyun Airport has been started with 80 million designed annual passenger throughput and 2.5 million tones cargo throughput till the target date 2020. This will be the new opportunities for “Canton Route” and the construction of Guangzhou hub.

Build an international brand of "Canton Route" culture as medium

Guangzhou, as the starting point of the Maritime Silk Route in Qin and Han Dynasty, has never suspended its opening. The term "Canton" originated from the trading of Guangzhou in Qing Dynasty. During the time of almost one century from 1757 to the 1840 Opium War, the social activities and relations between China and the West was mainly in "Canton”. After the founding of new China, the country chooses Guangzhou to hold the economic forum--Chinese Export Commodities Fair (Canton Fair) to communicate with the world. In the following 50 years after the founding of new China, Guangzhou has become an important window of external trade in mainland China.

CSN is based in Guangzhou and long-term rooted in there. The CSN culture absorbed Guangzhou' cultural characteristics of opening, innovation, staying pragmatic and inclusiveness. Therefore, CSN has chosen the "Canton Route" as its new brand and new business card to become an international hub. Canton Route and Guangzhou Hub will definitely combine the Chinese characteristic, Lingnan-style and the CSN imprint, which will also become advantages of Guangzhou Hub to differentiate itself from other established hub such as Singapore and Dubai, etc.

Therefore, CSN will deepen its cooperation with Guangdong province, Guangzhou municipal government and tourism administrations at all levels so as to establish differential advantages against other aviation hubs by making Chinese culture, especially Lingnan culture as the carrier and highlighting tea ceremony, porcelain, Maritime Silk Road, Thirteen-trade Monopoly, Chao embroidery, Kung Fu, Tai Chi, Cantonese cuisine, Cantonese music, Duan inkstand, Eight Sections Brocade and other well-known historical and cultural elements. CSN are supposed to implement these cultural elements into every detail of its services, such as sending elite crew in Canton Route to launch "Air Tea lounge" and air healthy Eight Sections Brocade, to show travelers how extensive and profound Lingnan culture is and to attract more travelers to China.

At the same time, CSN also accelerate mingling with the local culture and society. On the Australian route, CSN employed an Australian flight attendants to provide quality services and actively went deep into local mainstream society in order to enhance cultural communication, exchange and dissemination by becoming an exhibitors of Australia Tourism Fair and sponsoring Sydney Festival.

In the future, "Canton Route" will expand its aviation route network to build Guangzhou hub and develop all the markets Guangzhou can bridge with, and strive to establish Guangzhou as an all-round and comprehensive international hub with coordinated development of transit of domestic to domestic, transit of domestic to international and transit of international to international.