Update: On June 30, China Eastern Airlines announced that its “flight pass” promotion would be discontinued the same day, as sales had reached a predesignated cap. Passes already purchased will still be honored through the end of the year.
During a major online shopping festival Thursday, China Eastern Airlines, one of China’s three major state-owned air carriers, introduced a “flight pass” package for unlimited weekend travel to all of the airline’s domestic destinations.
Customers who purchase the pass will be allowed to travel economy class with very few restrictions. Priced at 3,322 yuan ($470), the product can be used for unlimited trips within China through the end of the year.
Wang Xuelei, a Shanghai-based student who purchased the flight pass, told Sixth Tone that it’s the most useful promotion he’s encountered among the flurries of coronavirus-driven consumption campaigns in recent weeks.
“It’ll fundamentally alter my spending behavior,” Wang said. “This flight pass will certainly change my travel pattern and will definitely help fulfill my desire to explore the country in an affordable way.”
According to China Eastern, the promotion is tailored to families living apart, commuters flying to and from work, and students traveling to their schools. It was developed with the central government’s overarching economic goals — of guaranteeing people’s livelihoods and stabilizing the domestic job market, among others — in mind.
Because of the pandemic, demand for air travel plummeted during the first quarter of 2020, leaving many airlines stuck in financial turbulence. Shanghai-headquartered China Eastern suffered 3.93 billion yuan in first-quarter losses while carrying 54% fewer passengers compared with the same period last year.
Despite recent signs of a COVID-19 rebound in Beijing, sales for the flight pass have taken off, even causing China Eastern’s mobile app to crash repeatedly on the first day the promotional package was available.
According to Lin Zhijie, an aviation industry analyst, the flight pass promotion may be aiming to meet two primary objectives. “First is the sorely-needed cash flow: Because this is a prepaid product, the airline is able to amass enormous revenue before the passengers use its service,” Lin wrote in a post on microblogging platform Weibo.
“The second objective is to optimize flight occupancy,” Lin continued. “Some passengers may only need to travel five times a year — but when given the opportunity for unlimited flights at roughly the price of 10 tickets, they may now be willing to pay the marginal cost to travel more.”
However, Lin feels that the promotion doesn’t necessarily bode well for the future of the domestic air travel industry, given that supply is still so much greater than demand.
Though China Eastern’s flight pass is the first such product offered by a Chinese air carrier, similar packages are available from regional airlines such as AirAsia and VietJet.
Editor: David Paulk.
(Header image: Passengers deplane from a “Toy Story”-themed jet operated by China Eastern Airlines at Shanghai Hongqiao International Airport, April 28, 2018. IC)