UK and China to sign revised air service agreement

17 Sep 2014 by Clement Huang

The UK and China are expected to sign a new air service agreement that will allow both countries to increase the number of weekly flights.

As Air Transport World reports, the agreement had previously limited passenger airlines of each country to offer up to 31 weekly return services. It had also capped the number of destinations served by carriers of both respective countries to six.

Under the revised deal, the maximum number of flights to both countries will be increased to 40 return flights in each direction, whilst allowing UK carriers to serve an additional three more Chinese cities. This opens up the opportunity for carriers like British Airways to serve fast-developing second tier Chinese cities.

However, further expansion into Chinese secondary markets is to be met with caution, given that few European carriers have been able to make this work for them. British Airways, for instance, has only this year launched a non-stop Heathrow-Chengdu service, but has not been able to make money with it as load factors fell below expectations even though the bellies were full of cargo.

There is a persistent rumour that Air France continues to receive subsidies from the city of Wuhan to maintain its Paris – Wuhan service.

Even traditionally strong markets like Guangzhou have come under flight revenue managers’ scrutiny lately with Lufthansa pulling out completely and British Airways never having started it.

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Clement Huang and Dominic Sebastian Lalk

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