Western airlines cut flights to China due to Russian airspace closure

Lower demand and high costs impact US and European airlines.

Western airlines have significantly reduced the number of flights to China, primarily due to weak demand and the increased costs associated with avoiding Russian airspace. This development has led to a shift in market dynamics, with Chinese airlines gaining a greater share of the market.

British Airways recently announced the suspension of its London-Beijing route starting in October. Similarly, Virgin Atlantic has decided to discontinue its Shanghai service. Even Qantas, an Australian airline unaffected by the Russian airspace restrictions, cut its flights from Sydney to Shanghai last month, citing low passenger numbers.

This reduction in flights marks a strategic shift for major global airlines regarding China. Factors such as slower economic growth in China and rising geopolitical tensions between Beijing and Western countries have contributed to this change. Western airlines once saw China as a prime opportunity for expansion due to its booming economy and increasing numbers of wealthy tourists.

However, the pandemic led to a sharp decline in flight numbers, and although there was a partial recovery when borders reopened in 2023, the anticipated resurgence has not materialised. In fact, airlines are now reducing their services once again.

British Airways had previously highlighted the importance of its Beijing route, especially when it resumed services after a three-year break. The airline even started hiring Mandarin-speaking staff earlier this year. While BA still operates flights to Shanghai and Hong Kong, the frequency to these destinations has been reduced.

China’s aviation sector has been slower to bounce back from the pandemic compared to other regions. Although international travel picked up pace in 2023, demand is still lagging behind 2019 levels. One of the most critical challenges for Western airlines is the ban on flying over Russian airspace, which has forced them to take longer, more costly routes.

Russian airspace restrictions, imposed in 2022, have significantly impacted airlines from the US and Europe, leading to higher fuel costs. These increased costs make it difficult for these carriers to compete with Chinese airlines, which continue to use Russian airspace. Fuel expenses typically account for up to 30% of an airline’s operating costs, so these diversions significantly impact profitability.

Data indicates that flights from Europe and North America to China have decreased by over 60% compared to a peak in 2018. In contrast, Chinese airlines have only reduced their flights by 30% and now operate more than twice as many services on these routes as their Western counterparts.

US government efforts to increase flight numbers between the US and China have been cautious. Despite an agreement to raise the number of direct flights from 35 to 50 per week, this is still a far cry from the 325 weekly flights seen before the pandemic. US airlines have urged the government not to increase this cap further, as they struggle to compete against their Chinese rivals.

Aviation experts note that Chinese airlines are taking advantage of the situation by increasing their services to Europe. They are also utilising widebody aircraft more effectively, partially to offset weaker domestic demand. Chinese airlines have been expanding their European routes, including new services from Shanghai to Marseille and Guangzhou to Budapest.

The broader geopolitical landscape is also a factor in the declining popularity of flights between China and the West. Heightened tensions since 2019 have affected travel patterns and business relationships. As a result, the aviation market between China and Western countries reflects these complex and evolving dynamics.