A number of western carriers are reducing or ending service to China. Why is this happening now and what does it mean for the future?
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Foreign Airlines Retreat from China
In recent years, the global aviation industry has witnessed a significant retreat of foreign airlines from the Chinese market. During COVID, travel restrictions (both to mainland China and Hong Kong, and Macau) made leisure travel onerous when possible, though for a long time it was nearly impossible entirely.
Demand was further reduced by a complex mix of geopolitical tensions, economic factors, and evolving market dynamics. Western carriers like British Airways, Virgin Atlantic, and Qantas have either suspended or reduce their operations in China. Meanwhile, China Airlines and its peers are seizing the opportunity to expand their international presence, reshaping the landscape of global aviation.
Geopolitical Tensions and the Russian Airspace Ban
One of the most critical factors contributing to the withdrawal of foreign airlines from China is the geopolitical fallout from Russia’s invasion of Ukraine in 2022. In response to sanctions imposed by Western nations, Russia has banned airlines from these countries from using its airspace. For European and North American carriers, this ban has forced them to take longer, more costly routes to China, significantly impacting the profitability of these flights. British Airways, for instance, announced that it would suspend its London-Beijing route for a year starting in late October 2024, citing the increased costs and extended flight times due to the need to bypass Russian airspace. In the past, British Airways has called the Beijing route one of its most important.
Virgin Atlantic has also decided to suspend its London-Shanghai service indefinitely, with the airline attributing the decision to the increased complexities and costs associated with avoiding Russian airspace. These operational challenges have made it difficult for Western airlines to compete with Chinese carriers, which continue to benefit from access to shorter, more direct routes over Russia.
At the start of the Ukraine conflict, Finnair which focused on connecting North American and European cities with the far east, had to retool its model to account for the inability to traverse Russian airspace.
“The airline started the first non-stop flight from Western Europe to East Asia in 1983. At the time it was not permitted to use Soviet airspace, but due to Helsinki’s location in the far north-eastern corner of Europe, a modified DC-10-30ER with additional fuel tanks was able to do the trick and reach Tokyo in 13 hours via the North Pole.
A big advantage at a time when almost all passenger flights from Europe and North America to Japan had to put in a fuel stop in Anchorage, Alaska. That stretched the elapsed travel time to 16 hours.
In 1994, Finnair was able to enter Russian airspace after a few minutes of flying east of Helsinki and reached Tokyo on this shortcut route in just about nine hours.” – Airline Ratings
Without such a shortcut, Finnair lost its advantage.
Weaker Demand and Rising Costs
Beyond geopolitical issues, economic factors have played a significant role in the retreat of foreign airlines from China. The demand for international travel to and from China has remained weak post-pandemic, particularly for Western carriers. Qantas, Australia’s national airline, suspended its Sydney-Shanghai flights in July 2024, citing half-empty planes and low demand. The slower-than-expected recovery of travel demand between China and other regions, such as Australia, has been a major deterrent for airlines considering the resumption or expansion of their Chinese routes .
Additionally, the economic slowdown in China has dampened consumer confidence, further weakening the demand for international travel. The Chinese economy, which was expected to bounce back strongly after the lifting of COVID-19 restrictions, has instead faced headwinds, leading to a greater focus on domestic travel over international destinations .
Chinese Airlines Expand Their Global Footprint
While foreign carriers are retreating, Chinese airlines are aggressively expanding their international operations. Chinese carriers, including China Southern, China Eastern, and Air China, have restored nearly 90% of their pre-pandemic international flight capacity. This expansion is partly driven by the cost advantages that these airlines enjoy, as well as their ability to operate more efficient routes over Russian airspace.
Chinese airlines are also benefiting from strong government support and a strategic focus on earning hard currency through international operations. As domestic competition intensifies and pressures profitability, these airlines are looking to international markets as a key area for growth. The ability of Chinese carriers to maintain and even expand their international market share highlights the shifting dynamics in global aviation, where Chinese airlines are becoming increasingly dominant .
The Future of International Aviation in China
As the global aviation industry continues to evolve, the future of international flights to and from China remains uncertain. While Chinese airlines are likely to continue their expansion, the withdrawal of foreign carriers could lead to a more insular aviation market in China, with fewer options for international travelers. This could have broader implications for global connectivity and the competitiveness of the Chinese market in the long term.
Adoption of Chinese carriers as replacements for western airlines could face headwinds. Some travelers will opt for a shorter flight time and more frequent schedules over the European and North American carrier they have flown in the past.
For foreign airlines, the focus may shift to other regions where they can operate more efficiently and profitably. The valuable takeoff and landing slots at major airports like London Heathrow, which are being reallocated from China routes to other destinations, reflect this strategic shift.
Airlines competed heavily just to get into the Chinese markets but now it seems that they are not ready, nor able to return or offer full services. A coming global slow down (China has been underway for some time) will not help western carriers return to China. But the question that seems most imperative is how much ground they will cede to Chinese carriers and for how long? Business clients that need an expedited route to China won’t wait for days to align their schedules to British Airways’ four-times weekly service and leisure travelers may postpone their return for some time. How many of the customers Chinese carriers will win from businesses will remain with them when other options are available? I suspect it will be fewer than Chinese carriers think.
Conclusion
The retreat of foreign airlines from China is a multifaceted issue, driven by a combination of geopolitical tensions, economic challenges, and strategic considerations. As Chinese carriers continue to expand their global footprint, the global aviation landscape is undergoing a significant transformation, with long-term implications for international travel and global connectivity.
What do you think?
i think that China should be limited to the number of flights that North American and European Airlines are willing to make. Maybe they will convince Russia to open their airspace at a fair price to other carriers.
“China Airlines and its peers are seizing the opportunity to expand their international presence, reshaping the landscape of global aviation.”
Perhaps Air China, or Chinese Airlines? I don’t believe the Taiwanese airline China Airlines has expanded in this context.
China Airlines IS Chinese. They are a flag carrier of the Republic of China. However, they are not a flag carrier of the separatist government of the Communist controlled sections of China.
The separatist forces on the mainland repeatedly and falsely claim that the Republic of China is a separatist regime but it is them that broke away from the established government.
Actually no.
The government of Taiwan was originally the government of all of China until they were pushed out by Russian backed communist forces during a civil war. They aren’t separatists that ran off they are what’s lefts of the pre communist government of China.
The simply reality is that Taiwan is for all intents and purposes an independent nation. A nation that the mainland can’t deal with rationally but rather throws regular temper tantrums over as if they were a toddler that has been denied its favorite toy.
Unfortunately the mainland leadership despite having the maturity of a toddler when it comes to Taiwan is in fact a superpower that seems determined to light of WW3 in the Pacific to try and have its way.
Disregard my previous. I misunderstood who you were calling a separatist. Sorry.
You write: Meanwhile, China Airlines and its peers are seizing the opportunity to expand their international presence, reshaping the landscape of global aviation.
I think you mean Chinese airlines. China Airlines is based in Taipei, Taiwan, and is not flying from mainland Chinese cities internationally.
“Avoid Vile China” is the best advice to any company or any person .
One of Nixon’s many failures for the West was his open hand to China , opening us to never ending frauds .
I will still take the long way and fly US-based airlines to China and back. There is simply no way in this day and age, where Russia is clearly incentivized to snatch Americans for whatever reason, that I would risk flying on a Chinese airline and, of the off-chance it gets diverted to Russia, become a pawn in geopolitics. That also goes beyond the hard/soft product and service, where I would still take what any American airline has to offer.
I personally think that US-China flying is going to remain pretty slot-restricted going forward. The US3 (and UA in particular) is quite disincentivized to see the fare dumping that Chinese airlines are well-known for return en masse.
But willing to fly to the People’s Republic of China and be subject to wrongful arrest?
The closed Russian airspace has cost western carriers by making many routes costly in fuel and schedule. And yet we are so accommodating to foreign airlines that abuse their advantage. They want flights to the west, then don’t use Russian airspace. And for travelers that choose to fly into Russian airspace, please just stay there. You do not to support your home nation’s interests. For those that want leisure travel to china please wait to spend your money until the playing field is level.
Agreed. All carriers to/from the US, Canada, or Europe should be banned from traversing Russian airspace. It’s not just a competitive disadvantage but Russia makes millions in overflight fees. They’ve lost almost $400 million per year so far. Should grind them down even further.
Yes, China Airlines are based in Taipei, Republic of China as many readers pointed out, what they forget to mention is that China Airlines is better than the Chinese Airlines which I avoid using.
In the end it’s all down to money.
Why should airlines pay to fly over a country? Why should not airspace be free for all?
Are they also charging satellites flying overhead?