Major airlines are cutting services to China or quitting entirely

[reader]

From CNBC

Major global airlines are reducing services and, in some instances, withdrawing from China altogether as longer routes to Asia following the closure of Russian airspace have raised operational costs, while demand has been low.

Virgin Atlantic and Scandinavian Airlines, for instance, are completely withdrawing from China, the companies’ websites show. Virgin Atlantic ceased all flights to Hong Kong — and closed an office there — in 2022, ending the airline’s 30-year presence in the Asian financial hub.

A report from travel news site Skift shows that seven major airlines have retreated from the country in the past four months.

John Grant, chief analyst at the aviation intelligence company OAG, said the situation is “going to get more pronounced, before it gets any better.

Airlines that are pulling back from China

Qantas	Suspended Sydney-Shanghai flights
Virgin Atlantic	Ended London-Shanghai flights
Lufthansa	Non-stop Frankfurt-Beijing flights no longer on flight schedule
SAS Scandinavian	Suspending Copenhagen-Shanghai flights on Nov. 8
British Airways	Pausing London-Beijing flights until at least Nov 2025; reduced Heathrow-Hong Kong services by 50%
LOT Polish	Suspending Warsaw-Beijing services for the winter
Finnair	Reducing Helsinki- to-Shanghai flight frequency for the winter

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British Airlines has steadily downgraded the size of jets it flies into China, said Grant. Routes that were flying Boeing 747 jumbo jets, were replaced by B777s and eventually even smaller B787s, he said. This is another way to scale back capacity, yet it “retains the dot” on an airline route map, said Skift.  
 

Following Russia’s invasion of Ukraine, the EU and the United Kingdom, along with other Western nations, imposed a blanket flight ban on Russian aircraft. Russia responded in kind by closing its airspace, forcing many European carriers to fly longer routes to reach Asia.

Longer flights require more fuel, which make flights more expensive. Chinese airlines, however, are not subject to Russian airspace prohibitions, so they can fly the same routes into Europe faster and cheaper than their European counterparts.

Additionally, “airlines have had to operate with four-man flight crews because of the extended hours when, in some cases, they could have used a two- or three-man crew,” said Grant. “When flight crew are short and hours limited, that’s an expense.”

Grant said European carriers have found better uses for aircraft that were deployed to China.

For example, when British Airlines dropped its Beijing route, it reallocated the planes to Cape Town, he said. “Load factors” — how full the plane is — jumped from 55% on the Beijing route, to 90% on Cape Town services, he said.

In pre-pandemic 2019, China welcomed some 49.1 million travelers, while around 17.25 million foreigners had arrived in China this year as of July, according to the Chinese government.

 

 

[Moses]

On 10/25/2024 at 8:49 AM, reader said:

In pre-pandemic 2019, China welcomed some 49.1 million travelers, while around 17.25 million foreigners had arrived in China this year as of July, according to the Chinese government.

In the first seven months of this year, the number of foreign visitors to China soared 129.9 percent year on year to 17.25 million, said Liu Haitao, NIA deputy head, at a press conference.

Meanwhile, a total of 341 million cross-border travels were recorded, up 62.34 percent from the same period of last year.

And almost all were served by Chinese airlines. West again shoots own legs.

[floridarob]

13 minutes ago, Moses said:

West again shoots own legs.

 where are they coming from, if other Asian countries Western airlines wouldn't have transported them to begin with.

I'm pretty sure the airlines have more pertinent, useful data that applies to them than you are quoting , no?

[Moses]

6 minutes ago, floridarob said:

I'm pretty sure the airlines have more pertinent, useful data that applies to them than you are quoting , no

I'm quoting the same source which is linked in opening post.

Just click it:

 

[floridarob]

1 minute ago, Moses said:

I'm quoting the same source which is linked in opening post

So your interpretation is different...why you assume they (west) are shooting themselves in the leg, when it might be a viable business decision, revenue vs expense?

Or just programmed to think that way?

[Moses]

Just now, floridarob said:

when it might be a viable business decision

Due to political decisions by their governments, Western airlines have become uncompetitive on Chinese and Indian routes and are forced to reduce flights or even stop them altogether because tourists do not fly on their flights.

This is a forced action for Western airlines, forced into it by short-sighted decisions by their governments.

[floridarob]

8 hours ago, Moses said:

Due to political decisions by their governments, Western airlines have become uncompetitive on Chinese and Indian routes and are forced to reduce flights or even stop them altogether because tourists do not fly on their flights.

This is a forced action for Western airlines, forced into it by short-sighted decisions by their governments.

And your country doesn't do anything that affects it's businesses and citizens.... 

That was a long trip say western airlines are shooting themselves in the leg to end up blaming it on the government....

Aeroflot really isn't very competitive in many markets, yet I'm sure that's no ones fault, except for the USA 😉

[Moses]

2 hours ago, floridarob said:

And your country doesn't do anything that affects it's businesses and citizens.... 

That was a long trip say western airlines are shooting themselves in the leg to end up blaming it on the government....

Aeroflot really isn't very competitive in many markets, yet I'm sure that's no ones fault, except for the USA 

Aeroflot. They have good marketing, since even you know about their existence, although the company does not even have 200 planes.

Aeroflot is a medium-sized company and the fact that it cannot fly to Europe now does not particularly bother anyone here - the company carries passengers and remains profitable. But giants like Delta have to bear losses.

Today I looked at the schedules, AirIndia flies from Vancouver to India, from Amsterdam too. Alone. And European airlines survive only by making joint flights with AirChina and ChinaSouthern. Isn't this the topic? European and American companies are losing to Chinese and Indian ones because their home governments have put them in conditions where they cannot fly the shortest routes, their flights are 1-2 hours longer and tickets are 15-20% more expensive.

That's why they are leaving the Chinese market - they can't compete. Clients prefer to fly with Chinese companies - it's faster and cheaper.

[floridarob]

We might disagree on many subjects, and I accept that for whatever reason..... as far as Airlines....you're totally out of your league.

I'd love to hear @paulsf opinion on this ....he's flown like 5 million miles and monitors airlines/flights pretty closely.

@Moses how many flights/countries have you been to?

btw, I've only flown 2-3 million miles, over 100+ cruises and 75+ countries.....so pay me no mind.

Forgot to mention, worked for JPM Chase in the Executive Office for a couple of years 🤷‍♂️ (I love this Emoji too)

[macaroni21]

I think the debate so far is missing the main point, albeit that the thread is about Euorpean airlines cutting back on flights to China. 

On 10/25/2024 at 1:49 PM, reader said:

In pre-pandemic 2019, China welcomed some 49.1 million travelers, while around 17.25 million foreigners had arrived in China this year as of July, according to the Chinese government.

This statistic is key, especially if we see it from China's perspective. It is likely that 2024 will end with about 34 million foreign visitors, only 70% of the 49 million the country received in 2019. Lots of small businesses in China catering to foreign visitors must be suffering. 

Tourism in China is of three broad types: The very biggest, by far is domestic tourism. You go to any attraction and chances are that domestic tourists will outnumber foreigners by a few multiples. This sector currently has its own problems but it is outside the scope of our discussion,

The second biggest group, I believe, would be the cross-border "tourists" from countries that adjoin China, such as Vietnam, Myanmar, Mongolia, Kazakhstan and Russia. They come in for a day and rarely go beyond the border town. Many are traders. For the purposes of this discussion (about flights), they're irrelevant.

The third group are those who fly in, or maybe cross from HongKong and then travel around other cities.

When we are discussing flights from Europe, we're really talking about a segment of a segment. Europeans are a portion of the third group. All the rest (from other Asian countries or America) are irrelevant to this discussion about flights from Europe.

Wikipedia has stats from 2019, giving you a sense of the breakdown by country of origin. The first big table there lumps the cross-border visitors with the fly-in visitors; it even includes Hong Kong and Macau. Not helpful, though you can see how big the cross-border numbers are.

It's the second table "Foreign arrivals in Beijing" which gives a better sense of the make-up of the fly-in segment of visitors. The numbers themselves refer to Beijing, but it's the proportions that interest us.

What is interesting is that, excluding those from Hong Kong, the top four (USA, Japan, South Korean, Taiwan) are NOT from Europe.  The top ten in 2019 were:

1. USA 629,000
2. Japan 247,000
3. South Korea 242,000
4. Taiwan 222,000
5. Germany 198,000
6. UK 153,000
7. Australia 141,000
8. Singapore 127,000
9. France 120,000
10. Canada 100,000.

The total for these top ten is 2,179,000. Of these, 471,000 (22%) were from Europe. Very roughly then, the issue of discontinued flights affects only about a fifth or a quarter of fly-in tourists. The rest fly in from neighbouring countries such as Japan or across the Pacific, such as USA and Canada.

The point is that even as Chinese Airlines are in a position to take nearly 100% market share of the European traffic due to the withdrawal of European Airlines, it does not amount to all that much. They'd still have to compete against Southeast Asian airlines, Japanese and Korean airlines for the much larger segments that do not come from Europe.

Above all, 100% market share of a market that is 30% smaller than 2019 - and I think it is significantly more than 30% down, because the cross-border numbers are likely to be holding up, so that means the fly-in numbers must be much lower - is no cause for celebration. The minister or officials in charge of tourism in Beijing must be far more concerned about the drop in total numbers, not about the pick-up in market share in a shrinking market.

It's important to see things in perspective. 

[Moses]

9 hours ago, floridarob said:

@Moses how many flights/countries have you been to?

When a person runs out of arguments to counter, he moves on to discussing the personality of the opponent.

[Moses]

2 hours ago, macaroni21 said:

such as USA and Canada.

shortest route to Beijing  (and China + India in general) from Canada and most part of US is via North pole, and that route is closed for airlines from non-BRIKS countries.. That why Vancouver - New Delhi nonstop route is serving by Air India alone.

[tm_nyc]

Thanks, @macaroni21, for the lucid, fact-based comments!  There is one additional variable regarding travel between Europe & China & that is travel which originates in China.  My understanding is that overseas travel out of China has not rebounded to its pre-Covid levels so that would also be an incentive for airlines to cut back.

What I get from the original post is that airlines seem less willing to compete with one another on less profitable routes just to get 'market share'.  Now they are trying to fly where they can make the most money.  Not great news for those of us traveling from Europe or North America but here we are!

[Moses]

6 hours ago, macaroni21 said:

must be far more concerned about the drop in total numbers

6 hours ago, macaroni21 said:

in a shrinking market

could you please explain how you made such conclusion from article with words

Quote

up 62.34 percent from the same period of last year

the number of foreign visitors to China soared 129.9 percent year on year ,

?

[floridarob]

4 hours ago, Moses said:

When a person runs out of arguments to counter, he moves on to discussing the personality of the opponent.

Nothing to do with personality, asking for your real life experience, credibility....types of questions people like you don't reply to. 

[macaroni21]

It isn't meaningful to compare 2024 figures with 2023 when china only reopened to travel in 2023. A better comparison would be against the last full pre-covid year, which is 2019. In the same way, Thailand speaks of the 39million visitors it received in 2019 as the measure of recovery from the pandemic.

As I pointed out, if we annualise the 17 million till July 2024, we may see 34 million visitors to china in the full 2024. It is below the pre-covid figure. Perhaps I should have said "shrunk market" rather than "shrinking market" because only time will tell what 2025 brings. Will it grow or shrink further?

51 minutes ago, tm_nyc said:

  My understanding is that overseas travel out of China has not rebounded to its pre-Covid levels so that would also be an incentive for airlines to cut back.

My understanding too. In any case I have been told by a Shanghai tour guide that  the majority of Chinese tourists headed to Europe are in packaged group tours. They are price sensitive and would more likely use Chinese airlines rather than European airlines (also Chinese-speaking cabin crew and Chinese meals on board). So even if outbound Chinese tourism (to Europe) grows strongly in the next couple of years - not likely given the economic doldrums in china - it won't be the European airlines benefitting.