US Airlines are Losing Interest in China, and That’s Bad for China’s Carriers

China is the next big thing. That was true 15 years ago, and may still be true 15 years from now (without ever actually becoming).

Aviation between the US and China has growth tremendously. Some of that makes sense as China has grown:

  • Over the past 14 years China-originating traffic has grown from 250,000 a year to 3 million a year
  • China as a business destination has grown as well, though not at the same pace.

During that time the number of flights between the U.S. and China has quintupled. Some of that consists of secondary routes as Chinese airlines squat on flights they might want to operate in the future. The Chinese government has only permitted one national carrier to fly each route between China and the U.S. so an airline needs to start a route before someone else does and operate it even if it is not profitable (although there’s been talk of relaxing this policy).

In addition to flights between major US cities and Beijing, Shanghai, and Chengdu,

  • Hainan Airlines flies Changsha–Los Angeles as well as Chongqing–Los Angeles and New York
  • Sichuan Airliens flies Hangzhou-Los Angeles and Jinan-Los Angeles
  • Xiamen Airlines flies Shenzhen–Seattle, Fuzhou–New York, and Qingdao–Los Angeles

Air China almost only flies between major U.S. cities and Beijing, and Marisa Garcia finds their head of North America throwing shade at some of the other airlines in China,

We don’t play sleight of hand, especially we don’t play financial sleight of hand. We run a great airline, and we offer great service. We’re not going to cut back, and we’re not taking any handout from anyone. We’re totally clean. We’re competing in a marketplace. Other carriers, I’m not going to comment on.

American carriers used to operate two-thirds of the flights between the U.S. and China, and now that’s flipped. And to hear Dr. Zhihang Chi, Vice President and General Manager of Air China North America, tell it “the US carriers are losing interest in the China market.” That’s a bolder claim than is likely accurate, but there’s some truth.

Delta of course remains closely linked to China Eastern, and American is expanding its modest codeshare with China Southern, but the lack of aggressive growth by US airlines may also cap the growth of Chinese airlines.

Without US airlines pushing the government here to renegotiate its bilateral treaty with China to allow for more flights (if they don’t want to grow they won’t want more flights), it’s unlike that China will be able to secure the right to add flights from its side of the Pacific.

There’s more than enough flights between the US and China today to cover origin and destination traffic. And only Delta, through its China Eastern stake, is really poised to benefit from connections beyond China (United has a partnership with Air China through Star Alliance and American a very small piece of China Southern though doesn’t even fly to its biggest hub).

However Chinese airlines are looking to supplement carrying Chinese passengers between China and US with connecting traffic from elsewhere in Asia. And that’s something US airlines are likely to largely lobby against.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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