Western airlines slash flights to China

A COMAC C919 in service for China Eastern. Western airlines increased flight numbers after the pandemic travel collapse, but are now retreating again. Photo / Public Transport, Beijing Bureau Beijing Section

Western airlines are slashing flights to China as a combination of low demand and the high cost of flying around Russian airspace saps their ability to compete with local carriers.

British Airways this month said it would suspend flights between London and Beijing from October, just weeks after Virgin Atlantic decided to pull its only China route, to Shanghai.

Though unaffected by the Russian airspace ban, Australia’s Qantas last month cut its Sydney-to-Shanghai route, saying its planes had at times been flying half-empty.

The retreat signals a change in attitude by some of the world’s leading airlines towards China amid slowing Chinese economic growth and geopolitical tensions between Beijing and the US and its allies.

Before the coronavirus pandemic, the country had been seen as a growth opportunity for western airlines hoping to benefit from its growing economy and increasing numbers of deep-pocketed tourists.

But flight numbers collapsed during the pandemic, and while airlines began to rebuild their schedules after borders reopened in 2023, they have in recent months signalled a new retreat.

Last year BA said the Beijing route was “one of its most important” when it relaunched flights after a three-year hiatus, and the airline began a recruitment drive for Mandarin-speaking crew as recently as January.

BA still flies to Shanghai and Hong Kong, but this year halved its frequency to the former British territory.

The Chinese aviation market has been one of the slowest to recover from pandemic-era border closures, with travel only restarting in earnest in 2023 and demand on international routes still much lower than in 2019.

Russia airspace closure

But for many airlines the closure of Russia’s airspace has been the most significant factor in making the routes unviable, industry bosses said.

Russia in 2022 banned US and European airlines from flying over its territory, forcing lengthy diversions from their typical flight routes when flying to parts of east Asia.

This increases fuel bills, which account for between 25% and 30% of operating costs, prompting complaints from airlines that they are at a competitive disadvantage to Chinese carriers, which still fly over Russia.

The number of flights by international carriers from Europe and North America to China during the busy summer season is down more than 60% from a 2018 peak of over 13,000, according to industry data provider OAG.

Chinese airlines have reduced flights on such routes by only 30% from their peak in 2019 and in summer now operate more than twice as many services on them as their western rivals, OAG data shows.

“If you’ve got a Chinese carrier that is flying over Russia, they’ve got an unfair advantage over us,” Ben Smith, chief executive of Air France-KLM, said last year.

In February, the US government agreed to increase the number of direct round trip flights between the US and China from 35 to 50 per week. This is less than a sixth of the pre-pandemic 325 flights per week, but US airlines have lobbied Washington not to raise the cap any higher as they struggle to compete with Chinese airlines.

“If the growth of the Chinese aviation market is allowed to continue unchecked and without concern for equality of access in the market, flights will continue to be relinquished to Chinese carriers at the expense of US workers and businesses,” industry lobby Airlines for America told US secretary of state Antony Blinken and transportation secretary Pete Buttigieg in an April letter seen by the Financial Times.

Demand for nonstop air travel between the US and China was down 76% in 2024 compared with 2019, according with A4A data.

Edmond Rose, an aviation consultant and former executive at Virgin Atlantic who helped launch its Shanghai route in 1999, said passenger numbers had not recovered to 2019 levels on routes that were already highly reliant on Chinese tourists and students flying over the summer.

“It has always been much more seasonal than, for example, the transatlantic market, and that is a problem because if you fly a year-round schedule then you are inevitably facing lower load factors in winter at pretty much the same costs,” Rose said.

The ability to fly over Russia had allowed China’s major carriers to capture “substantial” market share on routes to western Europe, said Jason Sum, equity research analyst at DBS.

Chinese airlines have increased scheduled flights to Europe during the summer season by 16% compared with 2019 to 14,835, according to OAG.

China Eastern last month launched direct flights from Shanghai to Marseille, while China Southern recently began flying from Guangzhou to Budapest. Chinese airlines have also picked up extra slots at London’s Heathrow airport this year.

Brendan Sobie, an independent aviation analyst based in Singapore, said Chinese carriers were also hoping to make better use of their widebody aircraft as domestic demand suffered from China’s weaker economic growth.

David Yu, an aviation industry expert at NYU Shanghai, said the increase in flights to Europe by Chinese carriers was in line with Beijing’s efforts to attract international visitors, including by offering visa-free access to citizens of numerous European countries. “The ultimate vision is to bring more people back to China,” he said.

But one western aviation executive said they thought the declining popularity of flying between China and the west reflected the broader geopolitical tensions that have risen since 2019.

“The nature of China’s relationship with the western world has changed,” the executive said.

Written by: Philip Georgiadis and Patrick Mathurin in London and Chan Ho-him in Hong Kong

© Financial Times