European airlines delete connections from and to China. However, airlines of the People's Republic massively expand their offer – and pushing Lufthansa, Air France and British Airways on the defensive.
European airlines have put a lot of hope in the connections between and China. But she has now caught up with reality: while western Airlines coincide on the routes, the Chinese competition is massively expanding its offer.
There are several reasons. Since the war in Ukraine, Russia's airspace has been closed to European airlines such as Lufthansa, Air France and British Airways. You therefore have to fly a big detour via Turkey and Central Asia, while the Chinese can continue to take the shortest route.
Longer flights mean higher costs for airlines. Steve Saxon, a partner of the McKinsey management consultancy, told the US broadcaster CNN, a two-hour flight caused by additional fuel costs of $ 8,000 to $ 10,000. In addition, there are higher costs for the crew, which is then on duty longer. In addition, airlines would have to use additional aircraft to operate the route. Because according to a certain number of flight hours, every machine has to be intensive control.
Due to the Chinese competition, these costs cannot simply be passed on to customers – because then many of them would choose the cheaper alternative from China. European airlines have already lost attractiveness on the routes: If you have to choose between a ten- and a twelve-hour flight, you are happy to choose the shorter one.
“Very difficult”
For Lufthansa and other European providers, the connections become less lucrative. Many airlines report a low demand in the west to China trips. British Airways recently announced not to fly from London to Beijing for at least a year from the end of October. Virgin Atlantic strokes the connection from London to Shanghai after 25 years. In Lufthansa, the low profitability of China flights was one of several causes of a weak first half of the year. “China is very difficult at the moment because the Chinese carriers are throwing so many capacities on the market,” said Lufthansa boss Carsten Spohr in June. The margin is “not so great”.
“European airlines are in an extremely unequal competition with China, as well as with the airlines of the Persian Gulf and Bosphorus,” said a Lufthansa spokeswoman for the “Handelsblatt”. The airlines from these states would benefit from low location costs, low social standards and high state investments in the air traffic sector.
The proportion of Chinese airlines is growing. “Chinese airlines usually have up to 30 percent lower costs than their international competitors,” explains John Grant, travel data expert from OAG. Airlines of the People's Republic also benefit from the desire of many Chinese to fly with a Chinese -speaking cabin crew.
The European providers have to make the demand for flights between China and the West only slowly recovered since the end of Corona pandemic. In July there were a total of 23 percent fewer flights from and to China than in the same month of 2019, as the data from the analysis company Cirium show.
Chinese wide range
According to the “Handelsblatt”, Chinese airlines increased their seating between European and Asian metropolises by a good 30 percent in August in August. The newspaper refers to Cirium data, the Frankfurt, Munich, London and Paris in Europe as well as Beijing and Shanghai in China. At the same time, Lufthansa, British Airways and Air France reduced their capacity by almost 40 percent.
The number of flights between China and Germany is regulated by an air traffic agreement. According to the “Handelsblatt”, up to 55 passenger and up to 38 freight flights per week have been agreed. While Germany does not exhaust this number, the Chinese side full of capacity. In the spring, China asked to increase the range of passenger flights, the newspaper quotes a spokesman for the Federal Ministry of Transport. In return, the German side wanted more freight connections to China.
German providers therefore received a total of 17 more freight flights. Chinese airlines may offer four additional flights per week from summer next year, four more in the following autumn. That should be significantly less than hoped for.
