Variable factors are boosting the overseas travelling market's boom, of which the large number of newly - opened international air routes are critical. "In the past year, a lot of tourists' spots overseas deregulated the visa policies for Chinese travelers. Simplified regulations, densified air routes and propaganda in China have offered huge drives for the market", said Dai Bin, Dean of China Tourism Academy. In the early half of the year, astonishingly, growth rate of outbound tours stays in 14%, which shows with higher income, Chinese people are more willing to travel, facilitating the strong growth in tourism market.

From the data published by Civil Aviation Administration of China (CAAC), there were 849 international air routes in China by the end of 2018 and 102 more opened in the early half of this year. Liu Lusong, Head of General Office, CAAC, recently said in a regular news conference, some 320 million trips were made in the market in the first half of the year, up 8.5% year on year, including 290 million for domestic air routes and 36.29 million international with the growth of 7.5% and 16.5% year on year respectively. The development of international air routes is remarkable.

Amongst all the airlines that expand in outbound travelling, it is noteworthy that several privately-owned domestic carriers are also working on the expansion of international air routes, especially intercontinental ones, apart from some veteran carriers, like the Top 3 state -owned airlines, which in China dominate huge shares of aviation rights and time slots in Beijing, Shanghai and Guangzhou, leaving limited space for private companies. Previously, most of the private airlines are striving merely for domestic air routes and short-range international ones. June 28 this year, the first fully loaded Boeing 787 Dreamliner of Juneyao Airlines landed in Helsinki, Finland, marking the real sense of the first intercontinental air routes opened by a privately-owned Chinese carrier.

The breakthrough of Juneyao Airlines means a lot to the industry. Whether can privately- owned companies be the new form of power in the development of international air routes?

Competition in the International Air Routes

Shanghai - Helsinki route flies once per day, with 10 hours for one-way trip, twice longer than Shanghai - Singapore route, which was opened during the Spring Festival this year by the same airlines. Thus, it is the longest international air route opened by Juneyao Airlines.

Juneyao Airlines has expected a long time for this route. As early as 2017, when the Shanghai-based carrier announced to order Boeing 787 wide-bodied airliners, it has drawn the curtains of the opening of international airlines. In October 2018, the carrier received its first Boeing 787 in Seattle. As planned, it would finish half of the delivery in last month and the whole pack of 10 aircraft by the end of 2020.

Wide-bodied aircraft like Boeing 787 are more efficient flying intercontinental air routes. Revealed by Wang Junjin, Director of Shanghai Juneyao Group and Juneyao Airlines in the press conference, the company has started deploying the expansion of intercontinental air routes when receiving the Wide-bodied aircraft, which mainly centers on the accessibility of countries that are covered in the "Road and Belt Initiatives". "Shanghai, the beachhead of the initiative, needs to connect with the other parts of the world and there are enough vacancies along the road, which will be the target of Juneyao Airlines. That is to say, the airline will focus on these areas to broaden its airline network", said Mr. Wang.

Set up in 2005, Juneyao Airlines has turned into a middle - sized airline with approximately 80 aircraft. Based in Shanghai and Nanjing, its airline network covers more than 140 cities all around China and South - East Asia, making 18 million trips in 2018.

Showed in the open data, there are 11 registered privately - owned airlines in China, 372 aircraft in total, among which, Spring Airlines and Juneyao Airlines boast rather larger scales, accounting for over one fifth in the whole industry. Besides, Loong Air in Zhejiang Province, based in Hangzhou and China Express Airlines, a regional carrier based in Chongqing are also positive in the expansion of fleet scale and air network.

However, Spring Airlines once expressed that it would focus on low - cost business, without any intention for Wide-bodied aircraft. After all, a unitary fleet is the key to lower the cost and keep the revenue. On the contrary, the full - service carrier, Juneyao Airlines has made a huge decision to face the challenge and also welcome the opportunity to introduce Wide-bodied aircraft with experience accumulated in many years in single - aisle planes.

An Expedient Access to European Market

Yet the question remains: whether Juneyao will be successful in the intercontinental market? The market in essence is absolutely different from domestic market. In North America, Australia and New Zealand, capacity has overpassed demand which leads to the vicious competition in price. When the hub airports in Europe have been taken up by the industrial giants, it is expedient for Juneyao Airlines to choose Helsinki as a newbie in the intercontinental market.

Heard from a senior executive of the carrier, Juneyao Airlines has sought out for European gateways yet the evaluation mode of CAAC ran out a result not favorable in privately - owned airlines. Among all the European air routes the carrier applied, the hot destinations like London were declined. At last, it decided to elbow in from North Europe. Taking Helsinki as a choice, Wang said, is for the reason that it is one of the most vigorous and energetic cities in European and even all around the world. In the meanwhile, many North European and Finnish companies have set regional headquarters in Shanghai thus bringing an increasing traffic flow from North European area to Asia.

"One of the regional advantages for Helsinki is it is an inevitable point in the shortest path from Northeast Asia to Europe", said Joni Sundelin, senior vice president of Finland Airport Group, "at the same time, China is the fourth largest origin of trip for Helsinki and the amount of Chinse travelers grew at a rate of 15% in 2018."

Besides, Juneyao Airlines signed code - share agreement with Finn Air which has already operated Pudong, Shanghai - Helsinki route before the opening of this route. It helps the shanghai - based carrier with a transit network that covers most of the domestic cities in Finland. What's worth noting, Finland is much better in operating experience and marketing network than the new comer, speaking of its history and wide airline network.

When the two airlines signed memorandum of cooperation in May this year to exert code sharing in Shanghai - Helsinki and Nanjing - Helsinki routes and transit service cooperation in the three destinations, it shows that they have built a relationship as both competitors and partners.

Also, Juneyao Airlines signed code-share memorandum with China Eastern Airlines after two months and China Eastern has become the marketing carrier of Juneyao's Helsinki route. Their cooperation has extended to air routes in Singapore, Macau and Hong Kong.

The cooperation with Finn Air and China Eastern will effectively guarantee the load factor of Juneyao Airlines in its first intercontinental air route. Some analysis predicted, when the load factor is lower than 80%, it will require a 2200-yuan one-way ticket approximately to break even. If counts all the cost of Boeing 787, the ticket price should be 2900 yuan.

At present, the capital market shows suspicion in the bold move of Juneyao Airline. By July 19, the growth rate this year of Spring Airlines is 38% while merely 7.7% for Juneyao Airlines. The collaboration with China Eastern and operation with wide-bodied airplanes seems to be a step to leave the comfort zone but really is to embrace the future in Shanghai.