Why are US airlines dropping China routes

Chinese airlines lure with ultra-cheap tickets

Even before Corona, survival was not easy for airlines. 23 airlines disappeared in 2019. There were only slightly fewer bankruptcies in the previous two years. A consolidation of air traffic, as in the United States, where the market is dominated by a few large airlines, is increasingly emerging in Europe and other regions of the world.

Industry experts expect the current crisis surrounding the Covid 19 pandemic to accelerate this process. "We assume that financially weak airlines that survive [...] will be significantly smaller when the pandemic is over," said the major bank HSBC in an analysis for Europe earlier this month. The tendency is that less competition will result in higher prices. But in China it is becoming apparent that the crisis can, at least initially, have the opposite effect.

Medium-haul flights for less than one euro

Domestic air traffic in the People's Republic has been running again since mid-February. The number of these flights is now half as large as in times before Corona. But demand does not seem to be quite keeping up yet. After the standstill, Chinese airlines are therefore trying to lure passengers back into the planes with ultra-cheap tickets.

The focus is often on the holidays, which are spread around Labor Day on May 1st - a popular travel time in China. From the city of Xianjing, China's largest airline, China Southern Airlines, for example, offers flights for 10 to 20 percent of the usual price. Shenzhen Airlines, which is largely active in the People's Republic, offered flights from Shenzhen to Chengdu - a distance of around 1,300 kilometers - for the equivalent of 65 cents.

Offers also for vacant adjacent seats

Other airlines offer special discounts. Shandong Airlines customers can purchase a “package” for the equivalent of 26 euros, which they can exchange for domestic flights in the last quarter of the year. Air Changan, Hainan Airlines, China West Air or Urumqi Air offer discounts for the purchase of multiple tickets.

Some airlines are also trying to do business with social distancing. China Express Airlines, Xiamen Airlines, China Eastern Airlines and China West Air, for example, offer discounts for booking vacant adjacent seats.

China's airlines feel the crisis

The consequences of the corona crisis hit the entire airline industry hard, including in China. For the first quarter of 2020, the Chinese aviation authority CAAC reported losses of approximately 5.2 billion euros. The number of flight connections has decreased significantly. In March, the People's Republic also announced that it would support domestic and foreign airlines that offer international connections to and from China, with the exception of Hong Kong, Macau and Taiwan.