Air Freight News

China’s Covid absolutism is making it a no-go zone for airlines

Entering the third year of the pandemic, China’s unbending approach to Covid-19 has left the world’s second-largest economy all but shut off from international travel, with fewer than 500 inbound flights scheduled this week, compared with about 10,000 this time two years ago.

Capacity cuts are intensifying as China tries to snuff out virus flareups with aggressive lockdowns. Since mid-December, airlines have eliminated almost 1,000 flights that would have arrived in the country between now and Feb. 1, the start of the Lunar New Year—typically the busiest time for travel anywhere on the planet.

Despite the difficulty every country faces in containing the omicron strain, China is persisting with attempts to keep the virus out. Authorities have blocked dozens of air services to and from the U.S. because passengers on previous flights tested positive for Covid after arrival, adding to tensions between the two nations. On Friday, the Civil Aviation Administration of China suspended four more incoming U.S. flights and ordered the suspension of another 26 from other parts of the world, including France, Indonesia and the United Arab Emirates.

And there won’t be a bump in incoming traffic for the Feb. 4-20 Beijing Winter Olympics either. China has banned non-resident spectators from attending what would normally be a sure-fire draw for tourism as thousands of fans, athletes and journalists fly in. The host of the last Winter Olympics, South Korea, saw a 15% jump in arrivals in 2018, the year of the event.

China will probably issue special landing permits and special flight clearances for the Olympics, and then reinstate the restrictions on regular flights, said Mark Martin, founder of Dubai-based Martin Consulting LLC.

Reductions from mid-December represent the elimination of about one-third of an international flight schedule that was already cut by more than 90% from the year before the pandemic.

“We don’t expect international travel to and from China to recover to 2019 levels for the next three quarters at least,” said John Grant, OAG’s chief analyst. The stance has cost airlines revenue, “especially as China had been among the fastest-growing markets, with a large number of affluent travelers eager to see the world.”

Flights between China and key destinations like Europe, Japan and North America are even lower now than they were a year ago.

While long-distance flying has lagged the short-haul recovery globally, other nations have seen more foreign trips restored, especially in the West.

U.S. airlines have brought back 77% of pre-pandemic international capacity, while the U.K. is around 47%, based on data from flight tracker OAG. While Singapore and Australia have gradually started to reopen, external arrivals remain tightly limited in Asian nations such as Japan.

Hong Kong is following China’s lead and then some, last week banning flights from eight countries including the U.S., U.K. and Australia. From Sunday, flights from places the government deems high risk won’t even be able to transit through Hong Kong for at least a month. That ruling covers about 150 countries and territories.

China’s hardening approach continues to drive down inbound capacity from last year’s levels, a time when many thought the worst of the pandemic was over.

Capacity from Southeast Asia has fallen to 124,411 seats for January from 182,182 a year earlier, data from Cirium show. On the cusp of the pandemic in January 2020, the figure was 6.32 million.

Domestic Crunch

The restrictions extend to China’s vast domestic air-travel market, one of the strongest in the world throughout most of the crisis, as the government kept sporadic outbreaks contained and people were by and large able to travel within the country.

Authorities have intensified clampdowns by shutting off cities such as Tianjin, a major port to the east of Beijing that connects Chinese manufacturers with the world.

This could pose an even bigger problem for Chinese airlines, given the domestic market—the world’s second-largest after the U.S.—has supported about 100,000 flights a week, compared with fewer than 1,000 international trips.

Still, the aviation regulator has set ambitious targets, saying on Monday it expects 570 million air passenger trips this year, compared with 440 million in 2021. That could provide some relief for Air China Ltd., China Southern Airlines Co., China Eastern Airlines Corp. and other domestic operators.

Even without the Olympics, the Lunar New Year is typically the busiest time for Chinese airlines. For flights taking place this current week, the domestic schedule was slashed by almost 20% since since mid-December.

Carriers have made much smaller cuts for next week and the following two, suggesting they may be in line for more pain, along with hotels, restaurants and other venues as lockdowns persist or worsen.

Bloomberg
Bloomberg

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© Bloomberg
The author’s opinion are not necessarily the opinions of the American Journal of Transportation (AJOT).

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