In recent years, international airlines have begun to significantly reduce or even completely cancel flights to China, especially in the context of Russia's closed airspace. This phenomenon has gradually revealed some deep-seated economic and market motivations. Experts pointed out that in addition to the increase in operating costs, this move also reflects the reality of China's economic status and the changes in international market demand for China.

Chain reaction of the Russian-Ukrainian conflict: rising flight routes and costs

Since the escalation of the Russian-Ukrainian conflict in 2022, Western countries such as the European Union and the United Kingdom have taken flight bans on Russian airlines, and Russia has also closed its airspace. This has directly affected air routes from Europe and the United States to Asia, significantly extending the routes and increasing aviation fuel costs. Many European airlines have chosen to reduce or completely stop flights to China in this context. For example, Virgin Atlantic and Scandinavian Airlines have completely withdrawn from China, and British Airways has also suspended flights from London to Beijing. These companies have been in trouble in the Asian market for many years, and the status of once prosperous hubs such as Hong Kong is being weakened.

According to statistics from Skift, a travel information platform, seven major international airlines have reduced or canceled Chinese routes in the past four months. John Grant, chief analyst at OAG, predicts that this trend will not improve in the short term, but may become more significant. At the same time, other Asian markets are growing against the trend. For example, flight capacity in Southeast Asia and Japan is increasing, reflecting that airlines prefer to choose other markets with stronger demand.

Demand shrinkage: economic slowdown and cold tourism market

A key factor in the reduction of flights in and out of China is the decline in market demand. Before the epidemic, China received nearly 50 million foreign tourists each year, but as of July this year, only 17.25 million foreign tourists entered China. In contrast, inbound tourism in other Asian countries has gradually recovered and grown. Against this background, companies such as Lufthansa and Qantas have announced the reduction or even cancellation of Chinese routes. Qantas said the direct reason for this decision was "low demand."

At the same time, more and more airlines are also adjusting their operating strategies to adapt to changes in the global economy. For example, British Airways stopped its Beijing route and deployed flights to more demanding regions such as South Africa, further indicating that China's tourism and business demand can no longer support the number of flights in the past.

The dual pressure of China's weak economy and reduced business travel

Analysts pointed out that the current Chinese economy is struggling to recover, foreign direct investment has decreased, and tensions with many countries have led Western companies to reduce the frequency of high-level business trips. David Baha, an expert at the Swiss International Management Development Association, pointed out that the reduction in business trips to China by multinational executives reflects the changes in China's economic environment. He pointed out that as the growth rate of the Chinese market slows down and international investment decreases, this has had a negative impact on airlines, especially on business travel demand, leading to a further reduction in flight capacity.

Although Chinese companies such as Ctrip expect the business travel market to return to 2019 levels, the decline in revenue of many international hotels in the second quarter further shows that foreign companies are cooling off in the Chinese market.

Intensified geopolitical friction: affecting economic exchanges and investment confidence

In addition to the Russian airspace issue, the decision-making of international airlines is also deeply affected by geopolitical factors. Professor Wang Jue of Leiden University in the Netherlands believes that the tension between China and the United States and the political friction between Europe and China are undermining market confidence. She pointed out that the current unstable economic environment and lack of investment confidence have led international companies to be reluctant to go to China to seek opportunities. The Sino-US trade friction, the risk of sanctions against Chinese high-tech companies and other issues have caused some multinational companies to move their production bases out of China or actively seek alternatives.

Although the number of flights between China and the United States this year is expected to double from 2023, it is still far less than a quarter of the pre-epidemic level. This phenomenon shows that the business ties between China and the United States have not returned to the pre-epidemic level, and the international market's demand for China is undergoing fundamental changes.

Challenges for Chinese airlines: sluggish domestic market and competitive pressure

Not only Western airlines, but also Chinese domestic airlines are facing many difficulties. As China's economic growth slows and domestic market demand is sluggish, airlines urgently need to accelerate recovery and improve profitability. According to analyst Grant, although Chinese airlines have resumed relatively more flights on the China-Europe route, the current market demand and actual operation are far from that before the epidemic.

Some industry insiders pointed out that Chinese airlines are currently increasing flights to obtain cash flow and increase market exposure, but this strategy may be difficult to work in the short term and may lead to more losses. It is predicted that competition between Chinese and foreign airlines in the Chinese market will intensify in the coming period, especially when there is an oversupply of flights, and ticket prices and service quality will become key competitive factors.

Conclusion

The retreat of international airlines from the Chinese market not only reflects the pressure of operating costs, but also reveals the deep-seated problems of China's current economic growth, business demand and international market confidence. Under the influence of multiple factors such as economy and geopolitics, China's market attractiveness is facing challenges. For international airlines, adjusting strategies and optimizing resource allocation have become important means to deal with uncertainty. This trend has also brought new challenges and opportunities for change to China's aviation industry.