In mid-October, Lufthansa, Scandinavian Airlines, and LOT Polish Airlines successively announced the suspension of their flight operations to Beijing and Shanghai. This news comes after earlier suspension of flights to and from China by British Airways and Virgin Atlantic.
The reported reason was that Chinese airlines have a unique advantage due to the Russia-Ukraine War. Since the start of the war, Russia has closed its airspace to 36 countries and regions, including Europe, forcing European airlines to take longer detours when flying to China. However, China has a special relationship with Russia and thus Chinese airlines can continue flying over Russian airspace as usual. This allows Chinese airlines to have shorter flight times, less fuel consumption, and potentially lower ticket prices. Chinese airlines are expanding while the European airlines are retreating. Air China, China Eastern Airlines, China Southern Airlines, and Hainan Airlines have all added new routes from China to Europe. (Note: this situation didn’t happen between the U.S. and China, since the U.S. insisted on the reciprocal rule: that Chinese airlines need to match the U.S. airlines’ operations.)
Some European airlines are dissatisfied with the situation and are asking their governments to take “non-market” special measures to curb Chinese competitors. In July of this year, Austria rejected China Eastern Airlines’ proposal to launch a Shanghai-Vienna route, saying that “Russia’s current airspace restrictions and China Eastern’s competitive advantage over the local Austrian Airlines would be against the overall economic interests.” Air France-KLM and Lufthansa are actively lobbying their governments to take action to address the imbalance in competition on China-Europe routes.
Source: Creaders.net, October 19, 2024
https://finance.creaders.net/2024/10/19/2786525.html