China’s aviation industry has faced significant regional differences in the recovery of international flights

With fewer COVID-19 restrictions, China’s aviation industry, which has been struggling for three years, has finally rebounded.

The domestic flight volume in China has been growing steadily and has now surpassed pre-pandemic levels, thanks in part to the increased travel during the Spring Festival.

However, the recovery of international flights has been slow, with only a 20% return compared to pre-epidemic levels. This is below the widely anticipated level of 30% in the industry.

International flight plan for the summer and autumn seasons revealed

On March 26^th, the Civil Aviation Administration released the international flight plan for the summer and autumn seasons. The plan revealed that 116 airlines plan to schedule 10,580 regular international passenger flights per week, which is a significant increase from the current weekly average flight of over 2,000 flights. However, the number of flights is only 60% of the average weekly flight of 17,524 in the 2019 summer and autumn seasons. Moreover, the flight plan is generally considered to be the upper limit number, and there are still many uncertain factors for the eventual recovery level.

Based on data from Flight Manager, a civil aviation platform, China’s international flight routes in the 12^th week of 2023 (March 20^th – 26^th) were dominated by Southeast Asia, accounting for 53.2% of the international flight volume. East Asia ranked second at 19.3%, followed by Europe at 8.7%, West Asia at 5.5%, Oceania at 3.9%, South Asia at 2.9%, Africa at 2.9%, North America at 2%, and Central Asia at 1.6%.

Middle East and Southeast Asia

The factors influencing the varying level of route recovery across different regions are multifaceted and intricate. The Middle East and Southeast Asia have been receptive to Chinese tourists, which has positively impacted flight volumes. In fact, international flights from Middle Eastern countries that maintain friendly ties with China’s policies, such as Qatar and Kuwait, have unexpectedly returned to pre-epidemic levels. Moreover, flights from the United Arab Emirates, Saudi Arabia, and Jordan have even surpassed pre-epidemic levels. Airline companies are currently concentrating on boosting their efforts in Southeast Asia for the upcoming summer and autumn aviation seasons.

The situation regarding China’s international flights in East Asia is quite complicated. While South Korea, China’s fifth largest trading partner, resumed flights in early March and quickly surpassed Singapore in flight volume, coming second only to Thailand with a recovery rate of over 16%. Japan, China’s fourth largest trading partner, has yet to announce the results of their negotiation, and their recovery rate is still less than 10%. Despite this, industry insiders believe that with the active economic exchange, the demand will continue to grow, especially as Eastern Asia routes have traditionally been profitable.

Europe and Australia

Regarding flights between China and other regions, the recovery rate for flights to Europe and Australia both exceeded the average level of 20%, at 20.8% and 27.4% respectively, surpassing those of Japan and South Korea. On February 16^th, the rotating presidency of the EU, Sweden, announced that 27 EU countries had reached a consensus to gradually lift the epidemic restrictions on Chinese visitors. On March 14^th, the Chinese Ministry of Foreign Affairs announced foreign visa and entry policies, which confirmed China’s long-standing commitment to opening up and demonstrated the tangible results of China’s commitments made during “Two Sessions” held in March. However, European airlines are facing higher flight costs due to their inability to fly over Russian airspace. Benjamin Smith, CEO of Air France KLM, stated that European airlines are forced to choose longer routes to Asia to avoid Russia, which gives Chinese companies an “unfair” advantage.

United States

The resumption of flights between China and the United States has been hampered by bilateral relations. In mid-February, the US Department of Transportation rejected the plan of American Airlines to add new flights to China during the summer and autumn seasons. The two major American airlines, Delta Airlines and American Airlines, were unable to increase flights to China in March. According to the principle of reciprocity, if US airlines are unable to add flights between China and the United States, the US government will not approve applications for additional flights from Chinese airlines.

From January 8th to the end of March, only a few new routes were established between China and the United States, except for some flights transiting in South Korea during the epidemic period.  Currently, the only operational routes are Beijing/Shenzhen/Xiamen/Guangzhou – Los Angeles, Shanghai/Guangzhou– New York, and Shanghai – Detroit. China Airlines operates 8 flights per week, and US Airlines operates 12 flights per week.

A senior civil aviation official has stated that negotiations on air rights and the optimization of entry policies are still the main constraints on bilateral international routes.  “Air rights” refers to the transit rights and transportation business rights in international air transportation. When exchanging these rights, the principle of reciprocity is generally adopted, including the execution of an equal number of international flights by both countries.

Impact of Russia-Ukraine conflict

At the beginning of 2022, European and American countries closed their airspace to Russian airlines due to the Russia-Ukraine conflict. In response, on February 28^th of that year, Russia also closed its airspace to 36 countries, including the European Union, the United Kingdom, the United States, and Canada. As a result, European and American airlines have had to divert routes to and from Asia, increasing flight time and fuel costs. However, Chinese airlines can still fly over Russia, which gives them a competitive advantage in the market, and this has led to a lack of motivation for European and American airlines to increase flights to China.

In terms of the long-term outlook, there may not be an explosive growth trend in the recovery of long-distance routes in Europe, while substantial changes in US routes are not expected until this October.