We’re going into the long holiday weekend, so I thought I’d give you something other than turkey to chew on until I’m back posting on Monday.
The idea of a post-COVID recovery sounds quaint these days. Most markets are back or beyond where they were in 2019, but not every market. The biggest laggard is China, though it’s not a laggard everywhere. China hasn’t struggled to get flying again domestically at all. Sure, the growth rate has slowed dramatically from the heady days of yore, but we are still flirting with record highs. It’s the flying outside of Asia that has been so problematic for China. A mix of weaker demand, Russian flying restrictions, and geopolitical turbulence have made the Chinese market a tough one.
It’s not often that I find myself comparing numbers to 2019 anymore, but for China, it’s essential. Here’s how the market looks outside of Asia.
FY 2024 vs 2019 Seat Change from China
Data via Cirium
The only market that’s up is Africa. It’s up a lot, but it’s off a very small base. The biggest increase comes from Egyptair with some new flying from China Eastern and Hainan. But let’s not dwell on this, because it’s not that significant.
The Middle East is the market that has held up the best after Africa, down only 2.2 percent. The Chinese carriers have grown in this market, but the Gulf carriers are all way down. That is somewhat of a surprise, but it shows that if there is strength, it comes from within China, not from the outside.
After that, the story becomes more dire. In Australasia, Jetstar has pulled out and Qantas mainline is down 75 percent. But Air China and China Southern are down a lot as well. It’s the secondary carriers in China that are keeping that market above water, airlines like Sichuan and Xiamen, with some China Eastern growth in the mix too.
And that brings us to the big two markets. At least, these markets used to be the big two. North America is down an incredible amount with less than a quarter of traffic returning post-pandemic. This is about the US, but it’s also about Canada. Every airline is down… a lot.
Of course, the biggest driver of this is geopolitical. There are artificial restrictions in place that keep flying between the US and China low. But it’s about more than that. Take Canada, a country which just had its China market open back up fully when restrictions were recently lifted. July 2024 seats were more than 90 percent below July 2019, but July 2025 as of now is scheduled to rise more than 200 percent. That is a lot of additional flying… but Canada will still be down more than 70 percent vs prior to the pandemic.
While that may mean progress, it seems likely that it’ll be a long time before 2019 levels are restored. And in the US, even if the shackles were thrown off, it would also take a long time to get even close.
Take a look at these side-by-side charts below. On the right side are the Chinese airlines. On the left are the other carriers, mostly US-based.
Marketing Carrier US-China Seats by Airline
Data via Cirium
That amount of growth that Chinese airlines poured into the market starting in the 2016 timeframe is insane and not supportable. But there was a lot of subsidy money flying around in China back then, and every airline decided to take a swing at the US.
These five airline groups from China are still in the US market in some way or another, but they are all down significantly, none more than Hainan which was always the wildest of the bunch. And on the US side, Hawaiian is out, so is any intra-Asia flying which still existed, and American is barely in the market now that it’s abandoned it LA Transpacific hub.
Delta and United are the two main players, but even they are down significantly. The only thing keeping the US-China market alive at all is Shanghai because of business connections. Otherwise things would look even worse. Take a gander at what I mean in the chart below.
Seat Share by China Origin City to US
Data via Cirium
Leading up to the pandemic in July 2019, Beijing had north of 40 percent of all seats departing China for the US while Shanghai was just over 35 percent. In July 2024, however, Beijing is just above 30 percent while Shanghai is almost at 45 percent. It’s a notable swing.
And this brings us to Europe, where the signs are even more concerning. Why? Because unlike in the US, Europe did come roaring back, but now it is reversing itself.
Europe is down only a little under 9 percent, but the airlines are dropping like flies. Before the pandemic, there was as many as 16 carriers flying between Europe and China. There were 13 flying from May 2023 through this October. But now, it’s down to nine as several carriers realize there’s no money to be made. On top of that, some existing airlines are ending or suspending some of the routes they were flying.
Here’s a list:
- Virgin Atlantic exited China (via Shanghai) in October
- British Airways ended Beijing in October but still flies Shanghai
- Neos exited China (via Nanjing) in October
- SAS exited China (via Shanghai) in November
- LOT is suspending service to China (via Beijing) for the winter, but it plans to come back for summer
- Lufthansa is suspending Frankfurt – Beijing for the winter, but it still flies there from Munich and plans to come back for summer in Frankfurt
The real question for Europe is what will actually come back next summer, and it’s too early to know for sure. But as of now, July 2025 is showing 3.5 percent fewer seats than July 2024.
How long all of this continues remains to be seen, but with a new US administration that seems poised to be very hawkish with China, things aren’t likely going to get better any time soon.
39 comments on “China Struggles to Get Flying Again, and Not Just From the US”
Worth noting the main reason why Qantas left Mainland China was due to their joint business venture with China Eastern not being renewed.
It doesn’t help that Australia and China have an open skies agreement either.
A few things of note… 1. one of the reasons of the growth in Africa relates to the “belt & road initiative,” a program in witch the Chinese government has been aiding several countries in their development. In return the Chinese get access to their natural resources & by extension political influence in these countries.
2. The Chinese are dealing with several internal problems as their property sector has fallen apart do to the collapse of Evergrand & other large developers. YouTube channels like “Business Basics” & “China insights” have numerous reports on these subjects.
I don’t think you will ever see US-China demand get back to pre-COVID levels for two main reasons:
1.) A material amount of supply chains have moved out of China. Their prolonged shut down caused many companies to rebalance their supply chains with less focus on China. Labor costs in China are now more expensive than that in Mexico and Mexico is much closer thus reducing time and costs of transporting goods.
2.) China’s demography is very, very bad. It resembles an inverted pyramid at this point with a lot of old people are not many younger people.
Correct. The sources I mentioned above made mention of this several times in those videos. In fact the Chinese are making waves in Mexico as well for the reasons you said.
Agreed. It would be interesting to do the same analysis against India which is the next mega power.
Aerospace businesses are pivoting there seeing it as the new ‘China’ from a growth perspective.
Too much government subsidized capacity pre-pandemic that simply won’t return. Go pull average fare data from that period, and it’s easy to see the Chinese airlines were highly unprofitable on those routes – they were vanity markets promoted by the government. Hainan’s collapse would seem to ensure it as they were the worst offender
yet another fascinating data-driven analysis that speaks volumes about the airline industry.
Aviation always is subject to forces outside of its control. No better example of that reality exists than China in the global aviation ecosystem.
China was catapulted from isolation to the global stage as a result of the US normalization of relations with China in the 1970s. China enjoyed nearly 50 years as a partner to the global community with the country becoming the factory for the world and China sending its brightest students to the best universities in the west. China wanted a piece of the Asia/Pacific aviation market and subsidized their carriers which weakened the TPAC financial performance of many carriers.
Covid and the Ukraine war and China’s alignment with Russia alongside how China assimilated Hong Kong and continues to threaten Taiwan initiated a geopolitical rearrangement that is not likely to be reversed.
US carriers are enjoying some of their best profits over the Pacific ever. and carriers from other Asian countries are seeing opportunity to expand, esp, ironically, those in Taiwan. Tokyo is a no-growth market for legacy carriers because of Japanese airport policy at Tokyo, TPAC growth from S. Korea is currently stagnated waiting for a decision on the KE/OZ merger, adding to the capacity cuts from Chinese carriers.
The world realizes it isn’t a good idea to be dependent on one country for so much of its economy which is why the next US administration is likely to accelerate an economic diversification away from China which will be matched elsewhere.
European airlines cannot justify the much longer flight times on top of weak yields as long as Russian airspace restrictions are in place.
Someone always benefits when someone else loses. We are simply seeing a long-term rearrangement of the global economic order of which aviation is just one part.
Actually @Tim Dunn your post here is inaccurate, specifically who was subsidizing the flights.
Those subsidies did not come from Beijing, but rather local governments. Why? Because these politicians wanted a quick nonstop to visit their families, access to their favourite restaurant in France, bragging rights, etc you name it.
Quite insane how far it got.
There were national and local subsidies but it doesn’t matter any more than it did arguing about where the subsidies for Airbus or Boeing came from.
The result was the same for Chinese aviation – an unsustainable economic imbalance that needed only a few other events to permanently change the trajectory of Chinese aviation.
Unlike Airbus vs. Boeing, there are many players in the global economy and aviation and other countries and their airlines have stepped in to fill the void and are making more money than they did before.
“Someone always benefits when someone else loses. We are simply seeing a long-term rearrangement of the global economic order of which aviation is just one part.”
You’re forgetting about the insane tariffs that the [removed] administration will attempt to implement. Just imagine the ripple effect they will have throughout the global economy.
I’ll leave the politics to other sides but subsidies and tariffs are just opposite sides of the same “coin” depending on perspective.
The free market would not approve of either but there are plenty of arguments that global markets are not free and open and that is particularly true in aviation.
History shows that economic policies in western countries in general tend to swing from one extreme to the other.
I think most of us that follow global aviation are interested in seeing how the decline in China’s role in TPAC aviation impacts other parties and specifically other airlines. I am betting the Taiwanese airlines are the big winners.
There’s a flaw in your argument, namely the free market. The construct is a complete myth as it’s first rule is wrong as not many parties act rationally & you of all people are smart enough to recognize that.
With China threatening Taiwan like never before and using Russia’s Ukraine invasion as a thought experiment on how a Taiwanese invasion would play out on the world stage, the last thing I would want long term is an ownership stake in a Taiwanese airline (see: Pacific, Cathay)
“the Drumpf administration”
I’ve seen lots of people get labelled as racist simply because they’ve mistakenly mispronounced Kamala Harris’ first name. I also recall seeing somebody on this blog (was it you, Sean?) getting their knickers all bunched up because they referred to Pete Buttigieg as “Mayor Pete”.
But I guess it’s ok to refer to a twice elected president by a silly name. That’s a real classy look for you Sean.
No That wasn’t me, I think you mistook me for someone else here. Believe it or not Drumpf was Trump’s real name when the family emigrated to the US & it was changed once they got here. So technically it is correct.
I’m sure that’s exactly why you used it.
I have erased the name from the comment because it offers no help here in people understanding the comment. The comment itself is perfectly fine, but let’s use real names in all cases so people understand.
Intra-Asia is going to be more complicated, but any idea if that traffic is overall up or down vs. 2019?
China-Japan (largely business) and China-SE Asia (largely tourism) used to both be huge and I feel like they were slow to come back, but I have no hard data for that.
Jason – Here’s what it looks like. Formatting is terrible, but the first number is the seats in July 2024, second is seats in July 2019, third is the difference, and fourth is the percent change. So really, Japan and South Korea are way down. Other than domestic, it’s Singapore and China that are the only notable countries where there’s an increase.
China 77,923,956 65,678,436 12,245,520 18.6% Japan 861,372 1,029,410 (168,038) (16.3%) Thailand 820,959 1,100,606 (279,647) (25.4%) South Korea 819,776 988,771 (168,995) (17.1%) Hong Kong (SAR) 619,673 839,355 (219,682) (26.2%) Singapore 431,986 389,555 42,431 10.9% Malaysia 407,970 353,307 54,663 15.5% Taiwan 302,621 592,845 (290,224) (49.0%) Vietnam 234,572 300,239 (65,667) (21.9%) Macau (SAR) 219,722 228,588 (8,866) (3.9%) Indonesia 105,226 185,217 (79,991) (43.2%) Philippines 91,775 176,269 (84,494) (47.9%) Cambodia 63,574 253,670 (190,096) (74.9%) Laos 56,712 37,026 19,686 53.2% Russian Federation 47,759 71,431 (23,672) (33.1%) Kazakhstan 33,975 23,440 10,535 44.9% Mongolia 27,196 18,954 8,242 43.5% Bangladesh 21,196 18,708 2,488 13.3% Sri Lanka 19,567 18,568 999 5.4% Uzbekistan 18,919 7,479 11,440 153.0% Myanmar 18,344 90,089 (71,745) (79.6%) Nepal 13,338 30,037 (16,699) (55.6%) Pakistan 12,737 16,283 (3,546) (21.8%) Maldives 12,711 12,217 494 4.0% Kyrgyzstan 8,434 5,201 3,233 62.2% Georgia 5,423 2,590 2,833 109.4% Azerbaijan 4,480 3,978 502 12.6% Tajikistan 4,275 3,679 596 16.2% Turkmenistan 3,667 2,168 1,499 69.1% Brunei Darussalam 2,954 7,053 (4,099) (58.1%) Afghanistan 610 610 0 0.0% India 47,281 North Korea 6,964
From your graph- 9W = Jet Airways (India)? Were they flying US-China circa 2008?
James – It showed up in the data, but since it was a rounding error I just left it in. I have no idea what that was.
They flew Mumbai-Shanghai-San Francisco
Even with much lower capacity, loads to China remain low on US carriers. The current capacity is a rational response to the lower demand.
This Canadian – and many others – have decided not to set foot in China again. Two Canadian citizens – “the two Michaels” – were arrested in China on trumped up charges and imprisoned for 1019 days without any with legal or diplomatic contacts. Then released. Never tried. Why would you take that chance?
I don’t believe they have much love for Americans either. Once the noted tariffs go into effect those relations will just go down the toilet really fast & we’ll see if US isolationist policies really work. My bet is they blow up rather quickly.
People are forgetting that Biden left the previous Administration’s China tariffs intact and even added a few of its own. So the new tariffs would IN ADDITION TO the the existing ones. I don’t see them making too much of a dent on relations when relations are already in a deep freeze (they would be better had China not thrown in with Russia on Ukraine…mostly to keep the US bogged down in Europe while they continue making plans to take Taiwan)
I was just going to write this but you beat me to it. Biden basically doubled down on Trump’s tariffs.
It is amazing how people get too entrenched in political propaganda that they don’t even realize (or want to admit) that their own party is doing the same thing they are criticizing the other party for. Sean needs to educate himself a little more.
The US carriers peaked in 2018, long before covid, so something had already changed.
The European changes are partially due to the absurd Russia/Ukraine/Middle East airway restriction that have made most routines uneconomical. Some recovery may occur when/if more appropriate air routes are reopened
That was around the same time when the Chinese economy also peaked & multinational companies started moving production to other countries. See the two YouTube channels I sighted above for more information.
Chinese airlines still overfly Russia, so the airway restriction isn’t a hard constraint. Even if the European airlines all drop the routes, the Chinese airlines could have increased frequency if there was still demand.
Happy Thanksgiving everyone.
There is over-capacity in Chinese airlines, and due to agreements between US and China, all the capacity are dumped in Europe and Australia.
Average daily usage of 777 between 3/31-6/30 and 7/1-8/28
CA: 10.27 hrs / 10.6 hrs
CZ: 6.71 hrs / 9.19 hrs
MU: 11.39 hrs / 12.72 hrs
No wonder CZ is looking to sell its 787-8 fleet.
It’s revealing also to look at change by airline. With few exceptions, Chinese airlines are way up, non-Chinese are way down, generally double- digit.
Brett, are you considering Cathay and HKG in your analysis?
John – No, didn’t have HKG in there since it is generally considered separate and operates under a completely different air treaty. But in case you are curious, Hong Kong seats are changing as follows July 2024 vs July 2019 from largest market on down…
*down 26.1% to mainland China *down 14.1% to Japan *down 18.8% to Taiwan *down 17.6% to Thailand *down 15.9% to Philippines *down 16.9% to South Korea *down 20.1% to Singapore *down 48.4% to the US *down 40.4% to Australia
CF,
Any way your Cirium data shows where the passengers originated? In other words Chinese Residents departing China vs Non-Residents arriving China? The China economic focused blogs (Michael Pettis, Brad Setser, et al) have been very focused on Domestic Chinese Consumption for Domestic Chinese Investment and how incredibly unbalanced and unique the Chinese Development model has been due to massive Government Investment in Property and Infrastructure.
Without any data, I sense Airlines and Aircraft may fall under massive Government Investment too. I wonder if hub-hub routes in China are dense enough to redeploy wide-bodies?
Lastly, what is so unique about Shanghai that traffic has held up so much better?
This blog topic is big enough for several posts….kudos for starting it!
One big factor regarding China-Europe flying is that the Chinese carriers currently have a structural advantage since they still fly over Russian airspace, unlike European carriers, which makes a massive difference in trip length. (Partially) because of that, fares to China and beyond (e.g. Malaysia or Australia with CZ) on these carriers have stayed ridiculously low. Not surprised European carriers are dropping out.
Brett, how much do you think there’ll be a boost in capacity next year if the Ukraine war gets resolved and Russian airspace reopens as a result?
Dolphin – I think that is unlikely the airspace would reopen even if the war gets resolved. But if it does, it should have no impact on the US market. It could, however, have a real impact on the European market since that would significantly shorten flight times and reduce operating costs.