In Depth: Even More European Airlines Drop China Routes

Scandinavian Airlines (SAS) ended its direct flight from Shanghai to Copenhagen on November 9, marking the conclusion of a significant route that persisted through the Covid pandemic. SAS also deactivated its WeChat account, leaving Air China as the sole airline offering direct flights between the Chinese mainland and Denmark [para. 1][para. 2]. This action follows a trend among European airlines such as Virgin Atlantic, British Airways, Lufthansa, and LOT Polish Airlines, which have reduced or suspended their China routes since the beginning of the year [para. 3]. Air France-KLM is also reducing the number of weekly flights from Amsterdam to Beijing and Shanghai, reflecting a broader reduction in European carriers on China-Europe routes, with only seven remaining as opposed to 14 in 2019 [para. 4][para. 5].

European airlines face challenges from increased operating costs due to Russia's airspace restrictions, demand weakness, and strong competition from Chinese carriers [para. 6][para. 7]. From November 27 to December 3, there were 855 flights between China and Europe, with Chinese airlines operating over 84% of them, a significant rise from about 60% in 2019 [para. 7]. European flights must take costly detours due to Russian airspace restrictions, adding 10% to 15% to European airlines' costs [para. 9][para. 10]. Despite these challenges, European airlines characterize reductions as "suspensions" rather than withdrawals, maintaining a cautious outlook for future opportunities [para. 12][para. 13].

European carriers like Lufthansa have used codeshare agreements with Chinese airlines to retain market presence. For example, Air China's operation of Lufthansa's Beijing-Frankfurt route [para. 15]. European airlines are reallocating capacity to more profitable routes, focusing on markets like Japan and South Korea where demand has exceeded pre-pandemic levels [para. 21][para. 24]. However, trade and tourism links with China remain weak, with trade between China and the EU declining by 3.3% and Schengen visa issuances still low [para. 26][para. 28].

Chinese airlines have increased their capacity on China-Europe routes, reaching a 21.25% increase compared to 2019 levels. Despite this growth, their average revenue on these routes has dropped by about 30% [para. 30][para. 31]. Calls for government intervention against perceived unfair competition from Chinese carriers have grown, though no concrete measures have been taken, partly due to the political and economic complexities involved [para. 35-38]. The detour issues stem from the Russia-Ukraine conflict, rather than actions by China [para. 40].

Conversely, North American airlines are aggressively restoring routes to China or launching new ones. United Airlines and Delta Air Lines announced plans for new or reinstated routes, with the latter resuming Shanghai-Los Angeles flights [para. 43][para. 44]. These expansions are primarily on the U.S. West Coast, less affected by Russian airspace detours. Canada has also relaxed restrictions, with China-Canada flights recovering to 11.2% of pre-pandemic levels, primarily operated by Chinese carriers [para. 49]. Meanwhile, U.S. airlines have yet to fully utilize their permitted 50 roundtrip flights per week quota, in contrast to Chinese carriers [para. 47].