By Lisa Barrington
SEOUL (Reuters) – Industry data shows Chinese airlines are gaining market share on international routes, while foreign rivals are deterred by weak demand for travel to China, as well as rising costs and longer flight times due to the need to avoid Russian airspace.
Foreign airlines, especially Western airlines such as British Airways and Australia’s Qantas Airways, are withdrawing their connections to China or deciding not to resume them at all after the pandemic. Chinese airlines, on the other hand, are expanding their foreign operations.
The share of international flights to and from China operated by Chinese airlines is higher than before the COVID-19 pandemic, which paralyzed global air traffic, and continues to rise.
British Airways announced on Thursday that it would suspend flights from London to Beijing for a year from the end of October for commercial reasons. Last month it also suspended one of its twice-daily flights between London and Hong Kong for the same period.
Since the outbreak of war in Ukraine in 2022, Chinese airlines have continued to take shorter northern routes to Europe and North America through vast Russian airspace.
In contrast, airlines in Europe, the United States and other countries have been denied access to Russian airspace by Moscow or their own governments, or are refraining from overflying for security reasons.
This increased the cost advantage of Chinese airlines and enabled them to expand their share of the international market – at a time when fierce competition on domestic routes has increased pressure on ticket prices and profitability.
“Typically, Chinese airlines have costs up to 30 percent lower than their international competitors,” said John Grant, senior analyst at travel data firm OAG. “Chinese airlines are desperate for hard currency and have embarked on a major expansion.”
According to flight tracker Flightradar24, British Airways’ four-times-a-week flight between Beijing and London takes around two and a half hours longer than China Southern’s daily flight on the same route, introduced last year.
British Airways will resume daily flights between London and Shanghai and resume a codeshare agreement with China Southern in May.
Virgin Atlantic announced last month that its London-Shanghai service would be suspended indefinitely from the end of October due to longer flight times.
British Airways and Virgin Atlantic can use the valuable take-off and landing times at London Heathrow Airport for other, potentially more profitable routes.
Qantas cited half-empty planes and low demand for travel to China as reasons for suspending Sydney-Shanghai flights in July. Asian airline Royal Brunei Airlines cited “market conditions” as the reason for suspending twice-weekly flights to Beijing from October.
FOREIGN TRANSPORT COMPANIES WITHDRAWAL
Chinese airlines such as China Southern, China Eastern and Air China operated 90% of the number of international flights they operated in July 2019, according to Cirium schedule data analyzed by Reuters.
Foreign airlines operated only 60% of the flights they did before the pandemic, indicating a decline.
For example, the only nonstop flights between Mexico and China are operated by Chinese airlines after Aeromexico failed to resume services following the pandemic. Aeromexico did not respond to a request for comment.
Carsten Spohr, CEO of Lufthansa, said last week that the group’s weakness in Asia was not due to a lack of economic opportunities, but to “overcapacity at Chinese airlines.”
But in the Middle East, where China is building relations, Dubai-based Emirates has fully restored its capacity to China, Kuwait Airways has increased its frequencies and Bahrain-based Gulf Air began flights to two Chinese cities for the first time in May.
China’s international traffic has been growing since pandemic-related restrictions were lifted in early 2023, but has recovered more slowly than other countries due to a weakening economy and a shift toward domestic travel.
In July, there were 23% fewer flights from China than in the same month in 2019, data from Cirium shows.
POLITICAL ISSUES
Some flights to and from China were halted for political reasons. Passenger air traffic between India and China has not resumed at all after the pandemic due to a border dispute.
Flights between China and the United States are at about a fifth of 2019 levels after a bilateral air services agreement was suspended in 2020.
Although the number of mutual flight authorizations has been gradually increased, US airlines operate only 35 of the 50 permitted round-trip flights per week, according to data from Cirium, while Chinese airlines have increased their number to 49 per week.
United Airlines announced last month that the airline had shifted capacity to other parts of the Asia-Pacific region due to a “dramatic” drop in demand for travel to China.
Major US airlines and aviation unions called on the US government in a letter in April not to authorize any more flights by Chinese airlines, citing Beijing’s “anti-competitive policies” and the discrimination against Russia in overflights.
“If the growth of the Chinese aviation market continues unabated, flights will continue to be awarded to Chinese airlines,” the letter said.
(Reporting by Lisa Barrington in Seoul; additional reporting by Ilona Wissenbach in Frankfurt, Rajesh Kumar Singh in Chicago and Joanna Plucinska in London; editing by Jamie Freed)
