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Chinese airlines turn to Asia as long-haul losses pile up

11/21/2019| 5:39:58 PM| 中文

The number of seats on flights to Southeast Asian and European routes jumped 30.6% and 34.6% respectively in the past three years.

Chinese airlines are adding seats on short- and mid-range Asian flights in a strategic shift away from prestigious but loss-making North American routes to a market that promises better returns and growth.

Over the past decade, the number of seats on U.S. routes operated by China's top three state-owned carriers rose fourfold, but such breakneck expansion came at a price. The nation's international aviation industry has been in the red for at least three years, with losses reaching 21.9 billion yuan ($3.13 billion) in 2018, according to recent China Air Transport Association data.

In response, Chinese airlines are increasingly seeking growth closer to home. Out of 105 international routes that Chinese carriers plan to add to over 800 existing ones for the new winter-spring season, most focus on East Asia and Southeast Asia with some European routes also thrown into the mix. 

"Chinese carriers are now taking a more commercial approach to international services," said John Grant, senior analyst at aviation data firm OAG. "If you could fly an aircraft for four hours and stay profitable compared to a 12-hour sector and not make any money, then you could do that thrice on a daily basis, thus making a better business sense."

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TAGS: Air China | China Southern Airlines | China Eastern
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