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Northwest Airlines (NWA), the world's fourth largest aviation carrier, said it remains upbeat about China's civil aviation market, now SARS (severe acute respiratory syndrome) is on the wane.
"Northwest has witnessed the development of China's aviation industry since we entered the market. We are optimistic about the role that China aviation will play in the world market in future," said Laurie Lofgren, general manager of NWA China.
"China is and continues to be one of the most important markets we are serving globally," said Lofgren.
China's tourism market has maintained growth rates ranging from 7 per cent to 10 per cent over the past five years.
"The rising demand for cross-country air travel, driven by increasing tourism, represents a huge market for airline companies," said Lofgren. She added that China's closer integration with the global economy will attract more foreign companies to set up offices in China.
"It will also raise the demand for business flights and cargo airlift. NWA will continue to be one of the industry leaders in the China market and is committed to serving China," she said.
In April, NWA's Asia-Pacific traffic, including on Chinese routes, was down 26 per cent as a result of the spread of SARS and the war in Iraq.
To minimize the impact of SARS on its business, NWA made changes to the size of aircraft and number of flights operating in the region.
"These changes will allow us to better match capacity with demand," said Lofgren.
Northwest offers services to many Asian destinations. And it currently has flights from its Tokyo hub to Beijing, Shanghai, Hong Kong and Taipei.
"Should demand rebound in these markets, we would consider resuming daily services to some cities and returning large aircraft to these routes," said Lofgren.
With some 1,500 daily departures, Northwest offers services linking its hubs in Detroit, Minneapolis/St Paul, Memphis, Tokyo and Amsterdam with nearly 750 cities in almost 120 countries on six continents.
"We have introduced a series of special checks and protective measures to ensure customer's safety, including screening the passengers, disinfecting facilities, monitoring passengers in flight, developing contingency plans," said Lofgren.
The outbreak of SARS has further damaged global airlines already reeling from the downturn caused by the September 11 terrorist attacks in 2001. A number of the world's largest airlines are making losses, and some are on the brink of bankruptcy.
"Northwest has weathered the storm comparatively well - better than other major full-service network airlines. However, we need to get our costs in line with our ability to generate revenue," said Lofgren.
The company said it will continue to outperform the domestic industry average in revenue per available seat mile with both higher yields and load factors.
"Our unit costs are also among the industry's lowest, and we began cutting costs far ahead of our rivals. Meanwhile we keep innovating our services to win back customers," she said.
After a year's planning, Northwest Airlines announced early last month that it had expanded its comprehensive self-service programme, which allows customers to obtain their boarding passes and to check-in over the Internet, to passengers whose trips start in any of the 15 cities that Northwest serves on its Asia network.
"It is part of NWA's strategy in Asia to take the best technology we have developed in the United States to the Asian market," said Perry Cantarutti, managing director of marketing and distribution in Asia, based in Tokyo.
During the first three weeks of May, Northwest carried about 103,000 passengers in Asia. Of those, about 2,500 used the new Internet check-in service. "The numbers are small but quite encouraging, given that this is a new service and we are working to educate and inform customers," said Cantarutti.
The new Internet self-service option cost the airline about US$100,000. But passengers who use it can save about an hour on the traditional process of checking in at airport counters.
Northwest is the first airline to offer this innovative service across nearly all of its global network.
"Global travellers are already embracing check-in and the many other self-service options we offer in rapidly growing numbers," said Al Lenza, vice-president of distribution and e-commerce at the airline.
In May 2000, Northwest was the first global airline to launch Internet check-in, allowing customers to obtain their boarding passes over the Web for US domestic flights.
The firm is also planning to introduce a "BizPerks" programme in China very soon to tap into the small and medium-sized enterprises market.
"Our pioneering services and products allow us to create more choices and make it easier for customers to do business with us, with the best schedules and the simplest access to our network," Lenza said.
(Business Weekly June 24, 2003)
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