China opens the way for increased competition on long-haul routes

16 May 2018 by Craig Bright
Beijing Airport

China’s aviation regulator is easing restrictions that require each route be operated by only one Chinese carrier, opening the way for increased travel options on long-haul routes.

The original policy was established in 2009 as a means to limit excessive competition among state-owned airlines, especially on routes with lower demand. However, a changing industry as well as the upcoming opening of a second international airport in Beijing in 2019 have driven the Civil Aviation Administration of China (CAAC) to change its ruling, the regulator said in a statement.

The new regulations are set to come into effect on October 1, 2018 and in particular will see routes to Australia, Thailand and the US, which have at least a partial open skies agreement with China, become unrestricted.

Long-haul routes to countries without such agreements in place will comprise a second category that will be subject to some restrictions.

“This will be a positive long-term development for Chinese airlines whose international route expansion have been limited by traffic rights access,” Corrine Png, chief executive of transport research consultancy Crucial Perspective told Reuters.

Beijing Daxing International Airport

The new policy notably will enable China Eastern and China Southern to develop their long-haul markets out of the upcoming Daxing Airport in Beijing. Under current conditions, national carrier Air China, which will remain at the existing Beijing Capital Airport, has dominated long-haul non-stop routes out of the Chinese capital.

Chinese airlines have been rapidly expanding their overseas networks in recent years, with the country’s “big three” – Air China, China Southern and China Eastern – seeing competition from rapidly growing carriers such as Hainan Airlines.

Australia in particular has become a popular destination among China’s carriers. Both Hainan Airlines and Tianjin Airlines launched new services to Sydney back in January, while last year both Hainan Airlines and China Southern launched routes connecting cities in Guangdong province with destinations in Queensland.

Meanwhile over the past few months, a wave of new routes have been launched or announced by Chinese carriers connecting cities in China with London, including Chengdu (Air China) and Sanya (China Southern), among others.

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