Foreign airlines lose interest in China as domestic carriers expand abroad
Lufthansa CEO Carsten Spohr recently attributed the airline group’s challenges in Asia to “overcapacity provided by Chinese carriers,” rather than a lack of economic opportunities in the region. This assertion comes as the global aviation market continues to adjust post-pandemic, with varied responses from international airlines.
In contrast, carriers from the Middle East are expanding their presence in China. Dubai-based Emirates has restored its flight capacity to China, Kuwait Airways has increased its flight frequencies, and Bahrain’s Gulf Air has commenced flights to two new Chinese cities since May.
Despite this growth, China’s international air traffic remains subdued. Since the easing of pandemic restrictions in early 2023, China’s international flights have been recovering more slowly than those in other countries, largely due to a sluggish economy and a shift towards domestic travel. Cirium data reveals that in July 2024, flights out of China were 23% lower compared to the same month in 2019.
Political issues have also impacted flight operations. For instance, flights between India and China have not resumed post-pandemic due to a border dispute, and flights between China and the U.S. are operating at only a fifth of 2019 levels following a suspension of their bilateral air services agreement in 2020. Although mutual flight authorizations have increased, U.S. airlines are running only 35 of the 50 permitted weekly flights, compared to 49 flights by Chinese carriers.
United Airlines recently announced a strategic shift, reallocating capacity from China to other parts of the Asia-Pacific region due to significantly reduced travel demand. Additionally, in April, major U.S. airlines and aviation unions petitioned the U.S. government to halt further flight approvals for Chinese carriers, citing concerns over Beijing’s “anti-competitive policies” and the disadvantage posed by Russia’s overflight restrictions.
The ongoing adjustments highlight the complex interplay of economic, political, and competitive factors shaping the global aviation landscape.
