China-Philippine flights to get wings clipped amid low demand, geopolitics

Weak demand linked to choke points in the Chinese economy has prompted airlines to plan cuts in their China-Philippine flights for the final three months of the year, according to analysts. And they say geopolitical friction between the two Asian countries is also playing a role in deterring travel that would help airlines prosper. AirAsia Philippines, China Southern Airlines and Qingdao Airlines have all indicated intentions to halt some of their flights in the fourth quarter, according to the industry data platform OAG Aviation. Philippine-based Cebu Pacific’s president, Alexander Lao, said separately last month that his airline would not restore Beijing flights because air travel had fallen short of pre-pandemic demand, the media outlet Philstar Global reported. The airline had a Manila-Beijing route in 2019. And OAG data indicates that AirAsia Philippines, an affiliate of Malaysia-based budget carrier AirAsia, will discontinue its 13 weekly Manila-Shenzhen flights from October, as well as the Beijing connection. China’s economic growth is slowing due to a property market crisis, hesitant consumption and, as of August, a softening of industrial activity. Travel outside mainland China last year reached just 60% of its 2019 levels, with more than two-thirds of those trips to nearby Hong Kong, Macau or Taiwan, according to the Economist Intelligence Unit. Andy Xie, an independent economist in Shanghai, said: “With the airline business there’s a cost issue – there’s a preference for domestic tourism in China. The cost of flying is quite high.” The anticipated flight cutbacks also come as China and the Philippines struggle through a maritime sovereignty dispute. The dispute has chilled two-way travel, said OAG Asia head Mayur Patel. And Xie noted that perceptions of personal safety risks abroad, including in the Philippines, further deter Chinese travellers.<br/>