Foreign airlines to face new rivals on popular China routes

Foreign airlines that fly on 20 popular long-haul routes to China will face fresh competitive pressure as Beijing begins to ease decade-old restrictions on Oct. 1, allowing more Chinese carriers to offer service. The change affects about 20% of Chinese long-haul daily capacity, according to data compiled for Reuters by Chinese aviation data firm Variflight. It will turn up the heat on US and European carriers like United and Air France KLM, which have higher costs, lower outbound demand from their countries and less cultural appeal to Chinese travellers. “The North American and European airlines are no match for the Chinese carriers,” said Corrine Png, CE of Singapore-based transport consultancy Crucial Perspective, citing the majority of traffic being driven by Chinese customers. Some have already abandoned Chinese routes, with American Airlines recently planning to drop Shanghai-Chicago service after also cancelling Beijing-Chicago and describing the routes as a “colossal loss-maker” that cost it $30m a year. The “one route, one airline” policy had been in place since 2009; altering it now is a response to the changing aviation market, China’s Civil Aviation Authority has said. Two of the routes, Shanghai-Paris and Shanghai-Frankfurt, already have two Chinese airlines flying them but can add one more. Variflight’s chief data analyst, Cong Wei, said Chinese airlines controlled about 50% of the seats on the 20 routes, which include Beijing-Los Angeles and Shanghai-London, and had the potential for a much higher share.<br/>