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Chinese airlines are increasing their flights to Europe during the peak summer season, leveraging their cost advantages over European competitors amidst rising oil prices driven by Middle East conflicts. At the same time, they are reducing routes to Southeast Asia and Oceania.
This summer and autumn, one major airline plans to boost European flight frequency by 24% compared to the previous year, with the peak reaching 410 weekly flights—a 35% increase during this period. Another carrier has introduced a new route from Beijing Daxing International Airport to Helsinki and intends to expand service by adding flights from Guangzhou to London, Madrid, Moscow, and Budapest. A different airline is eyeing new routes from Beijing Daxing to Frankfurt and Milan.
Due to ongoing conflicts in the Middle East, a number of flights between Europe and Asia through Middle Eastern transfer hubs have been canceled. Chinese airlines, permitted to fly over Russia, benefit from shorter direct routes to Europe, which translate into reduced flight times and lower operational costs compared to European carriers—offering a significant competitive edge.
However, a marketing executive within a Chinese airline mentioned that, last month, routes to Europe were profitable. Still, with the possibility of further fuel price increases, higher ticket prices might not suffice to offset the growing expenses.
Historical data indicates that airlines often face low-profit margins once crude oil prices surpass $80 per barrel. When prices reach historic highs, most carriers tend to operate at a loss.
Furthermore, if the conflict in the Middle East continues, some European airports could experience serious jet fuel shortages. Olivier Jankovec, director general of Airports Council International Europe, recently warned that if the Strait of Hormuz remains closed for stable operations beyond three weeks, the European Union could encounter a systemic aviation fuel shortage.
Cancellation of Routes to Southeast Asia and Oceania
As Chinese airlines actively seek to capitalize on Europe’s supply gap, they are also trimming certain routes to Southeast Asia and Oceania to manage the pressure from rising fuel costs.
Hong Kong-based Cathay Pacific announced it will cancel approximately 2% of its passenger flights from mid-May through the end of June to mitigate the impacts of soaring jet fuel prices. These cancellations primarily affect regional short-haul routes as well as flights to and from Australia, South Asia, and South Africa. Its subsidiary, Hong Kong Express Airways, will reduce flight operations by around 6% during this period.
Other carriers have also discontinued multiple routes between China and Southeast Asia or Oceania from April 1, with some cancellations extending into May, despite the peak travel period around Labor Day for Chinese residents, according to data from civil aviation technology firms.
Airlines tend to cancel routes when the expected revenue no longer justifies the higher operating costs due to fluctuating fuel prices over an extended period. For example, as Australia approaches its low travel season, jet fuel prices are significantly higher there than on the Chinese mainland. Intense competition makes it difficult to raise ticket prices, leading Chinese airlines to cut flights to Australia early.
A representative from Spring Airlines noted that long-haul international routes are under more pressure because of higher overseas jet fuel prices. Conversely, short-haul flights permit airlines to carry enough fuel within China for round-trip journeys, helping mitigate some cost increases.
Despite global efforts to raise ticket prices and fuel surcharges to cover higher fuel costs, airline executives comment that these measures have not fully alleviated the financial pressures caused by the rising fuel prices.
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