As SAS and LOT, alongside Virgin Atlantic and BA, suspend flights, China-Europe air links weaken, possibly impacting passenger and cargo capacity.
European carriers continue to exit or suspend operations in the Chinese market, with the latest being Nordic carrier SAS and Polish airline LOT.
SAS is discontinuing its Copenhagen to Shanghai service, with the final flight on this route scheduled for November 7, according to its website. Meanwhile, LOT is suspending its Warsaw to Beijing flights from the winter season, with the last outbound flight from Warsaw set for October 24, and the return flight from Beijing on October 25.
SAS currently operates Airbus A350-900 aircraft on its Copenhagen-Shanghai route, while LOT uses Boeing 787-8 for its Warsaw-Beijing service.
Finnair, another Nordic carrier, has reduced its seat capacity to China by 90% compared to 2019, according to data from Cirium aviation analytics, the airline now flies only to Shanghai using its Airbus A350-900 aircraft. It previously operated flights to Beijing, Guangzhou, Xian, Chongqing, and Nanjing.
With this flight suspension announcement, SAS and LOT have joined other European airlines like Virgin Atlantic and British Airways (BA) in withdrawing from the Chinese market. Earlier Virgin Atlantic announced that it would suspend its flights to Shanghai starting in October, with the final departure from London on October 25 and the return flight on October 26.
Virgin Atlantic currently operates only between London and Shanghai using its Boeing 787-9 aircraft. British Airways has also suspended the suspension of flights from London to Beijing. The British national carrier announced that its service to the Chinese capital will end on October 26, and flights will remain suspended until at least November 2025.
The closure of Russian airspace due to the Russia-Ukraine war is the main reason European carriers are exiting the Chinese market, as it forces them to take longer and more expensive routes. Russia has also banned European carriers from using its airspace. However Chinese carriers are permitted to fly over Russia, which provides them with a significant advantage. This allowance enables them to operate more direct and cost-effective routes to Europe and beyond, reducing flight times and operational costs compared to their European counterparts.
While the suspension of flights may lead to substantial revenue losses for European carriers, it is also expected to significantly affect air cargo traffic between Europe and China.
According to data from the European Commission, China is the European Union’s (EU) second-largest trading partner after the US, with bilateral trade totaling €739 billion in 2023. China is also the EU’s largest import partner and the third-largest export partner.
In 2023, EU exports to China totaled €223.6 billion, while imports from China reached €515.9 billion, reflecting year-on-year declines of 3.1% and 18%, respectively.
Carriers like Virgin Atlantic, British Airways, Finnair, SAS, and LOT are belly cargo operators offering reasonable cargo payload on their widebody passenger planes. This capacity is particularly significant given the continued growth in demand for air cargo services. According to Xeneta’s latest report, in August, outbound China e-commerce trade value hit its second-highest level on record, falling just seven percent short of the all-time high of $8.7 billion reached in December 2023. As e-commerce continues to drive trade volumes, these passenger carriers contribute by utilising their belly space for the growing outbound e-commerce shipments from China.
This trend is further underscored by recent data from World ACD. For the first half (H1) of 2024, the combined outbound tonnages from China and Hong Kong increased by 24% compared to the first six months of 2023. This significant year-over-year growth in 2024 follows a 12% year-over-year rise for the entirety of 2023.
IAG Cargo, the cargo handling division of International Airlines Group (IAG), utilises the freight capacity of its sister airlines’ passenger flights, such as British Airways.
In a statement to STAT Media Group, Camilo Garcia Cervera, Chief Sales and Marketing Officer of IAG Cargo, said, “Direct-to-consumer shipping from China is shaping the nature of what we transport. Shipments from China often include automotive parts, tech products, and e-commerce. Into China, we frequently carry perishables, pharmaceuticals, and luxury fashion items to meet the growing demand in China for high-quality imports.”
Although he did not comment on the impact of British Airways discontinuing flights to Beijing, he emphasised that “IAG Cargo operates daily services from London Heathrow to Shanghai, operated by wide-body 789 aircraft, alongside daily flights between Heathrow and Hong Kong.”
While addressing the suspension of services, a Virgin Atlantic spokesperson said, “After careful consideration, we’ve made the difficult decision to suspend our London Heathrow to Shanghai services, after proudly serving this Asian hub city since 1999.
“Our people and customers in Shanghai have been amazing since we first touched down 25 years ago. Since then, we’ve provided important connectivity between the UK and Shanghai for thousands of customers and supported global supply chains through our cargo operations. However, significant challenges and complexities on this route have contributed to the commercial decision to suspend flying to Shanghai.”
Virgin Atlantic stated that operations have become increasingly costly due to extended flight times, as the airline is unable to overfly Russian airspace. The flight duration from London Heathrow to Shanghai Pudong International Airport is now approximately one hour longer, while the return flight from Shanghai Pudong International Airport to London Heathrow takes about two hours longer. This increase in flight time necessitates additional aircraft and crew resources, further driving up operational costs.
The withdrawal of European carriers from China will significantly impact air cargo capacity between Europe and China, this may lead to a loss of market share for European airlines while presenting growth opportunities for Chinese carriers. Cargo airlines and freight forwarders will likely need to reconfigure their networks and potentially increase dedicated freighter services to compensate.
