Western airlines were excited about returning to China after Covid. But not anymore

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Western airlines were excited about returning to China after Covid. But not anymore

Editor’s Note:

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When

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finally reopened its borders after years of Covid restrictions, Western airlines seemed poised to return to the once bustling market.

Last year, foreign carriers scrambled to reinstate direct routes to the world’s second biggest economy, previously known for its export of lavishly spending tourists. Some even touted plans to boost flight schedules.

But fast forward a year, the mood looks strikingly different.

Several Western airlines are slashing flights they brought back just a year ago, with aviation industry analysts citing lukewarm demand due to

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.

Higher operational costs and extended flight times incurred by Moscow’s war on Ukraine — as Western airlines skirt Russian airspace — have also squeezed their margins and made them less competitive than their ******** rivals, which have benefited from a long-standing preference by domestic travelers for ********-speaking crew.

Adding to those woes, tense geopolitics have dashed hopes for the full resumption of flights between China and the ******* States and some close Washington allies, as Western tourists mostly look elsewhere.

“Foreign airlines did not recover international capacity to China as quickly as ******** airlines recovered international capacity from China,” said Steve Saxon, a partner at McKinsey, who leads the consulting firm’s China research team on travel, logistics and infrastructure.

“Even before reaching the pre-Covid levels, foreign airlines are now pulling back their flight capacity because they have more profitable opportunities elsewhere within their networks,” he added.

Delta Air Lines (

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) is among those carriers. The airline has confirmed to CNN that it has postponed plans to bring back its Los Angeles-Shanghai route due to “the slower recovery of the travel demand in the market.”

British Airways will suspend its London service to Beijing, the ******** capital, starting from October 26 until at least November 2025.

It’s the same day on which ******* Atlantic has scheduled its last flight from Shanghai to London. An airline spokesperson told CNN it was a “difficult decision” to suspend the route that launched 25 years ago. ********* airlines have so far been the worst hit because of the impact of Russia’s invasion of Ukraine, Saxon said.

Impact of Russian invasion

******** leader Xi Jinping declared a

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partnership with Russia weeks before the full-scale invasion in February 2022 and set a policy of decrying sanctions and continuing to strengthen ties with Russian President Vladimir ******. Since the invasion, ******** carriers have benefited from shorter northern routes to Europe and North America over Russia’s vast airspace.

Story continues

By contrast, airlines from other countries have been banned from Russian airspace or chosen to fly around it out of safety concerns.

Saxon said the detour, sometimes also bypassing Ukraine airspace, can add up to three hours to flight times between ****** and ********* cities with a considerable bump in cost.

“A flight from a ********* airline may cost an additional $8,000 to $10,000 in fuel for a two-hour increase in flight time,” he said, noting also greater crew costs and additional aircraft to maintain the service.

That appears to be why ******* Atlantic is pulling out. “Operations have become increasingly costly due to increased flight times as we are not able to overfly Russia,” it said in its statement to CNN sent earlier this month.

The airline said it took two extra hours to fly from Shanghai to London, and an extra hour the way back.

That put foreign airlines in a disadvantaged position. If offered a choice between a 10-hour flight and a 12-hour flight, it’s clear what the majority of travelers would choose, Saxon said.

“People don’t enjoy spending time on board aircraft,” he added.

Geopolitics at play

Most China-bound flights from North America do not fly over Russia and the detour is relatively minor for those US airlines affected by airspace restrictions, according to Saxon.

However, flights between the US and China have been subjected to carefully negotiated bilateral agreements.

In late March, the US Department of Transportation

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the quota of weekly round trips that ******** carriers can fly to and from the US to 50, up from 35 earlier this year.

But it’s still a fraction of the more than 150 weekly round trips allowed by each side before curbs were imposed in early 2020 due to the coronavirus.

The two countries have been clashing over a raft of issues from high-end semiconductors to disputes in the South China Sea.

Shukor Yusof, founder of Endau Analytics, which tracks the aviation industry, said relations between the world’s two biggest economies are “a critical part of the aviation industry” that cannot be ignored.

“We are entering a very difficult phase with China and the Western world and there will definitely be implications which cannot be under emphasized because airline industry is a global industry,” he said.

While airlines would like to think that they can strategize based solely on the business environment, Yusof said the reality is that the industry is also “driven by governments who have their own interests, especially for China.”

He also said Beijing hasn’t done enough to actively lure back foreign tourists while encouraging ******** citizens to fly with domestic carriers.

As US airlines delay plans to resume China services, flag carrier Air China in March added two more flights from the ******** capital to New York and one to Los Angeles. Other ******** airlines have also increased their US flight frequencies.

According to aviation analytics company Cirium, ******** airlines have maxed our their allowed 50 flights in and out of the US per week, while the three US airlines that operate services to China – Delta, ********* Airlines and ******* Airlines – run just 35 flights.

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