British Airways ushered in a new era of expansion today with its first new long-haul service for nearly three years.
The carrier completed its inaugural flight from London to Shanghai after restrictions on direct routes between the UK and China were eased last year.
In addition to Shanghai, BA is also increasing the number of flights on its existing routes to Beijing and Hong Kong. Another new long-haul service will begin in October to the Indian city of Bangalore.
Chief executive Rod Eddington said: “It’s no surprise that the two newest additions to our network are in the growing markets of India and China.”
Today’s launch comes after BA scrapped a string of unprofitable routes to focus on Asia and increase services to other popular destinations such as Los Angeles and New York.
BA planes will make five journeys each week to Shanghai, challenging rival Virgin Atlantic which currently operates four flights to the city.
Its entry to the market – along with China Eastern Airlines – has forced down prices on the Shanghai to London route. A return ticket starts at £504.90 (€747.30) for economy class.
The launch of the Shanghai service comes as Chinese tour operators gear up to send groups of holidaymakers to the UK after it became an approved tourist destination in January.
The first tours are due to begin in July and BA believes they could fill up to 15% of its economy seats each year.
With China’s economy continuing to expand at breakneck speed and expected to grow by around 9% this year, airlines are keen to cash in on the boom in business travel and the growing affluence of Chinese citizens.
At the same time, Britons are opting in greater numbers to spend their holidays in China.
The attraction of Shanghai as a destination is that it is China’s wealthiest city. Officials expect it to account for 15% of the national economy by 2015.
A quarter of the country’s trade flows through Shanghai, with oil giant Shell and pharmaceuticals group GlaxoSmithKline among major firms to have set up bases there.
The new long-haul service is the first to be launched by BA since it began flights to Luanda, the capital of Angola, in November 2002.
It follows an agreement signed by the UK and China in February last year that will double the number of flights between the two countries within 10 months.
UK carriers have permission to operate 31 passenger and seven freight flights each week from March next year, compared with 15 passenger and five cargo planes at the same stage of last year.
BA chairman Martin Broughton said the designation of the UK as an approved tourist destination by the Chinese government was a further boost.
He said: “We have wanted to fly to Shanghai for many years and now we are here, we intend to make our mark.”
The service is expected to be profitable within three years and the decision to offer a first-class cabin underlined the belief in the company that demand was there.
BA began flying to mainland China in 1980 after the country started liberalising its economy and opening up to the outside world.
It currently operates six flights to Beijing each week in addition to 21 flights to Hong Kong, which is covered by a separate air services agreement.
BA’s predecessor – Imperial Airways – first flew to Hong Kong in 1936.