Scandinavian Airlines (SAS), Northern Europe’s largest airline, halted their Shanghai-Copenhagen route on November 9, 2024, amidst growing challenges within the China-Europe flight market [para. 1]. Several European airlines, including Virgin Atlantic, British Airways, Lufthansa, and KLM, are also reducing their flights to China due to profitability issues and the impact of geopolitical tensions like the Russia-Ukraine conflict, which has increased operational costs by forcing detours around Russian airspace [para. 2][para. 4][para. 11]. European market share for China-Europe routes shrank to 15.8% as of November 2024, with the number of foreign airlines operating on these routes halved since 2019 [para. 4].
Commercial pressures and low travel demand between China and Europe post-pandemic have driven European airlines to focus on more profitable routes [para. 4][para. 5]. In contrast, North American airlines are showing signs of route expansion, suggesting a divergence in strategies between U.S. and European carriers [para. 6]. For instance, United Airlines is planning a new Los Angeles-Beijing route in 2025, and Delta Air Lines plans to resume a route to Shanghai [para. 6].
Regulatory and operational challenges further exacerbate European airlines’ struggles, including increased detour-related costs of over 10% following airspace closures, higher labor and fuel expenses, and environmental constraints like the EU’s sustainable fuel mandates [para. 12][para. 21]. European airlines are lobbying for governmental intervention against what they perceive as “unfair competition” from Chinese airlines, who benefit from shorter and less costly routes due to access to Russian airspace [para. 7][para. 22][para. 24].
Chinese airlines, on the other hand, have expanded in this competitive landscape, with projections suggesting a considerable increase in their capacity on China-Europe routes by the end of 2024, despite seeing lower average revenue from these routes [para. 17]. Chinese airlines are offering more flights with better pricing and shorter travel times, which European airlines like LOT Polish Airlines find difficult to match [para. 25].
Meanwhile, countries have started revising their visa policies to stimulate travel. For instance, China’s extended visa-free access to several European countries has led to increased entry figures, a move aimed at bolstering civil exchanges [para. 15]. Serbia, a noteworthy example, enabled visa-free travel for Chinese citizens and launched direct flights to Chinese cities, significantly boosting tourist numbers between the two countries [para. 29].
The broader geopolitical landscape, however, poses ongoing constraints on the recovery and restructuring of international routes. Issues such as bypassed routes due to the Russia-Ukraine conflict and limited trade exchanges between China and Europe are critical underlying factors limiting the full recovery of the air travel market [para. 30]. Despite this, some European airlines, like Air Serbia, are strategically increasing their flights to China, leveraging their unique geopolitical position and moves like visa waivers for Chinese travelers [para. 30][para. 32].
Efforts by European carriers to involve government restrictions highlight the friction between market-driven strategies and geopolitical realities, further complicated by external pressures like the detours required for European carriers [para. 30][para. 33]. Despite the airlines’ call for governmental intervention, a significant shift in China-Europe relations, influencing future route decisions and trade exchanges, seems unlikely in the short term [para. 33].
In conclusion, the European airline sector faces significant operational challenges and shifting market dynamics on China-Europe routes. While geopolitical issues continue to impede growth and recovery, airlines are forced into an ongoing reassessment of their strategic priorities, with varying levels of success and response between different regions [para. 4][para. 6][para. 17][para. 30].
AI generated, for reference only
