Air China tackles quality checklist to boost services

July 12, 2010, 2:53pm

Air China Ltd., the nation’s largest international carrier, said it’s working on more than 100 service improvements as it competes with Cathay Pacific Airways Ltd. and Delta Air Lines Inc. on overseas routes.

Targets include onboard catering, seat comfort, inflight entertainment, call-center operations, maintenance and cleaning, Senior Vice President He Li said Monday in an interview in Beijing. The airline is also deploying a mobile-phone text messaging system, he said.

“This year we want to focus on improving services,” He said. “We couldn’t do it during the financial crisis as then we were tied up with just avoiding losses.”

Air China’s plans may help it win more sales in the nation’s international air-travel market, which the industry regulator expects to surpass 50 million passengers a year by 2015. The improvements may also help the carrier boost first and business-class traffic on domestic routes as the government liberalizes pricing rules.

“There’s clearly still some difference in the service quality between China’s airlines and international ones,” said Zhang Jing, an analyst at Philip Securities (HK) Ltd. in Shanghai. “The verdict remains open if the new fare rules will result in better inflight services.”

Air China, China Southern Airlines Co. and China Eastern Airlines Corp., the nation’s big three carriers, all have three- star ratings from London-based Skytrax, a research company. Delta, the world’s biggest carrier, also has three. Cathay Pacific and Singapore Airlines Ltd. have five stars, the highest ranking.

Air China rose 2.9 percent to HK$8.18 at the close of trading in Hong Kong. The stock has gained 35 percent this year.

He also said that Beijing-based Air China expects to win regulatory approval for the sale of a 49 percent stake in its cargo unit to affiliate Cathay Pacific. Operations under the new structure may begin in the second half of the year, He said.

“The market share for Chinese airliners in cargo is always going down,” he said. “We want to change this.”

Cathay Pacific, Hong Kong’s largest carrier, will inject four Boeing Co. 747-400 freighters into the unit as part of the 1.7 billion yuan ($250 million) deal announced in February.

Separate discussions have also taken place on combining the air-freight operations of China’s big three carriers in a bid to help bolster operations, He said.

“There is no consensus yet whether that is feasible and if it can achieve its objective,” he said. He didn’t elaborate.