US and European airlines will benefit from pent-up demand for travel to China after its recent border reopening, but route approvals, fresh COVID-19 testing rules and not enough large aircraft remain barriers to rising sales, analysts and industry officials said.
Travel is returning to China, the world’s largest outbound tourism market worth US$255 billion in 2019, after the country ended mandatory quarantines on Jan 8. Airfares from China are now 160 per cent higher than before the pandemic, data from travel firm ForwardKeys shows, due to limited supply
Iowa-based lawyer Jinying Zhan, 50, said he paid US$1,600 for a one-way ticket in December to fly via Chicago and Dubai to Guangzhou.
“I haven’t visited my family in three years, so I will go to the spring festival with my sisters,” he said. “Flights were very expensive.”
Before the pandemic, he used to pay US$1,000 to US$1,500 for a round-trip direct flight from Chicago.
A round-trip fare from San Francisco to Shanghai on United Airlines for a week-long trip in early March costs US$3,852 in economy class and US$18,369 in business class, according to a Reuters search on the airline’s website.
Global airlines are running only 11 per cent of 2019 capacity levels to and from China in January, Cirium data shows, but the figure is expected to hit 25 per cent by April
Booking website Expedia said it saw US-China and Europe-China searches double after the reopening announcement.
Chinese airlines, with ample staff and widebody planes, and a cost and time advantage of roughly two hours from flying a more direct route using Russian airspace, are expected to be early winners.
But US and European airlines, which have focused traditionally on the strong business travel market to China, and often cater more to the preferences of Western passengers, are poised to benefit from companies willing to pay a premium to rekindle face-to-face ties.
Trips to China “are already on the books for many companies and travellers as they kick off a new business year”, said Suzanne Neufang, chief executive of the Global Business Travel Association.