Two Sino-US direct flights will stop in October, hampered by rising fuel costs, fierce competition, and slowing travel demand due to trade friction between China and the United States, industry experts said.
On Tuesday, Dallas-based American Airlines said it would stop flying the route between Chicago and Shanghai, after cutting direct flights between Chicago and Beijing in May, citing higher fuel costs and a “competitive environment”.
“Our Chicago-Shanghai service is unprofitable and simply not sustainable in this high fuel cost environment, when we have opportunities to be successful in other markets,” said Vasu Raja, vice-president of network and schedule planning of American Airlines.
The largest US carrier by passengers said in a statement that it would seek a US Department of Transportation waiver to allow a return to the market once conditions improve.
The airline also said it hoped to find new ways of cooperation once the new Beijing airport in Daxing district starts operations by next year. Besides, it is launching nine new routes, and these are mainly direct flights between the US and Europe.
Meanwhile, Hawaiian Airlines, which operates direct flights between Beijing and Honolulu three times a week, announced on Wednesday that it would close the service after the weeklong National Day holiday in October. This is the only Sino-US direct flight currently operated by Hawaiian Airlines, and it said in the statement that those who have booked flights after October could get full refunds.
“The fuel costs have surged. In July, fuel costs jumped about 40 percent compared with the same time last year, and the cost pressure of intercontinental flights is significant,” said Lin Zhijie, an aviation industry analyst and columnist at Carnoc, one of China’s largest civil aviation websites.
“The flights between major Chinese cities and the US are quite saturated. US carriers are at certain disadvantages, as the majority of demand increment comes from outbound Chinese travelers. Most Chinese passengers tend to buy flight tickets from Chinese airlines, and US carriers don’t benefit much from that, they may adjust their strategies to other routes,” he said.
He added that the ongoing trade tensions between the world’s largest two economies may affect business travel. In addition, business and tourism visa approvals have become tighter, therefore travel demand growth is likely to slow down.
Still, United Airlines and Hainan Airlines operate direct flights between Chicago and Beijing. United Airlines, Delta Airlines and China Eastern Airlines offer direct flights between Chicago and Shanghai. American Airlines continues to operate flights between China and Los Angeles and Dallas.
In addition, United Airlines canceled its direct flights between Hangzhou and San Francisco last year, only one year after it launched the service, as the nearby airports in Shanghai took away some customers.
