8 ANNUAL REPORT 2008
Management Discussion and Analysis
“ 2008 was a tremendous year. In the year, we witnessed the significant achievement of China’s economic and social development in 30 years since its reform and opening up, felt the passion and inspiration brought about by the Beijing Olympic Games, and participated in the historic breakthrough of direct cross-strait flight. Meanwhile, we also suffered from the snowstorm disaster and the serious earthquake, and experienced an international financial crisis and global economic setbacks of unprecedented scale.”
Tan Wan geng
President
During the reporting period, the Group strived to promote its development strategy of internationalisation and network establishment. By improving the construction of hub network, marketing network and service network, the Group leveraged on the economies of scale attained through network development and achieved a fundamental change in modes of growth. During the reporting period, the Company sped up the construction of its dual hubs, re-designed its overall traffic capacity, and adjusted schedules of its flights, in an effort to promote continuous development of its hub network, progressive expansion of its marketing network, and constant improvement of its service level. In addition, as part of its continuous efforts to deepen the reform and innovation, the Group implemented centralized controls and effective management of capital. Also, it has been seeking for new service methods and forms, for example, it widened the application of information technology, introduced new services such as cell phone check-in, and SMS platforms. Through all these efforts, the Group was able to lay a solid foundation for its future transformation and development.
During the reporting period, to cope with high aviation fuel prices, the Company, while proactively strengthened cost controls and cut energy consumption, engaged in certain aviation fuel hedging activities in a cautious manner in order to offset a part of aviation fuel costs. The Company also stayed alert on tackling hedging risks that may arise from a sharp fall of fuel prices. Besides, the Company actively fulfilled its commitment to the society,
and made certain achievements in the unprecedented difficult situation.
During the reporting period, the Group focused on brand-building for its services which underlined the construction and development of its service assurance network. The Group launched a special drive known as “Welcome the Olympic Games with Gold Medal Services” and successfully fulfilled its duties to deliver quality services toward the Beijing Olympic Games and Paralympic Games. Our effort to combat the snowstorm and earthquake also gained credits. In the meanwhile, the Group carried out the activity called “Year of Brand and Services” on a more extensive basis. Its brand-building movement mainly concerns four aspects, namely high-end services, ground services, in-flight services and transit services. For high-end services, the Group was committed to attracting high-end customers by establishing a high-end customer administration system and high-end customer service standards. In respect of ground services, the Group concentrated on improving check-in, first class and business class lounges and luggage transportation services, so as to give its customers a convenient and comfortable experience. For in-flight service, the Group carried out a “cabin revolution” to provide passengers with new in-flight experiences by enhancing the environment and service standards all-around. As to transit service, the Group regulated relevant service units, unified brand image, made full use of its network strengths, and tried its best to build up a transit service brand boasting efficiency and convenience.
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