A Hainan Airlines Airbus A330-200: Wikipedia Commons

Melbourne’s second airport Avalon, could realise its long held international services ambitions if the Hainan Airlines  海南航空公司 deal signed in Shanghai today works as intended.

However it’s important to give due weight to the qualifications highlighted in the official announcement quoted below, as well as keep in mind that no-one is mentioning frequency or money.

Premier Denis Napthine joined Prime Minister Tony Abbott in Shanghai today to witness the signing of a Memorandum of Understanding (MOU) to expand Avalon Airport’s passenger transport operations into China.

As part of the trade mission to Asia, the MOU commits Linfox Group to assist HNA Group Hainan Airlines to start an aviation service between Australia and China within 18 months using Avalon Airport as a base.

 “This announcement outlines an important commitment by Linfox to assist HNA Group in their consideration of using Avalon Airport as a base for the introduction of passenger flights directly from Victoria to China,” Dr Napthine said.

Dr Napthine said this agreement also commits Linfox and HNA to contribute jointly towards the creation of an international terminal and infrastructure at Avalon Airport.

That is a standard trade mission statement. Full of worthy intentions, but without anything bankable, as yet.

There would however be some very substantial benefits for Melbourne if for example Hainan were to start daily flights from one or more cities in China to Avalon by the end of 2015.  Not just in inbound tourism and commercial  traffic, but in encouraging other international airlines to pressure Melbourne’s International Airport at Tullamarine to reduce its landing and handling charges or lose their business.

The curse of airport privatisation in Australia in general has been that the Howard Government sold publicly owned gateway airports to private owners who without mincing words, abused their ownership of a natural monopoly to engage in behaviour contrary to that expected in a competitive economy.

Avalon could change all this. It could win over Air Asia X, entice Air Canada’s budget brand Rouge, and see the Hainan service imitated by other PRC carriers, from other parts of China, as well as South Korean, Vietnames and Japananese leisure operators and Indonesian carriers.

It could add to the political and economic pressure on Government over the building of a much needed 2nd Sydney Airport at Badgerys Creek, so that half of its metropolitan sprawl doesn’t clog the road and rail access to the current inadequate airport.

And so forth.  Hainan Airlines lists 128 airliners from regional sized to medium sized long haul jets in its fleet, and has a further 22 jets in storage, which some analysts have attributed to an over optimistic reading of demand in the past.

It parent HNA Group also owns interests in a range of other airlines, including a 45% stake in Hong Kong Airlines.


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