28
AUG
2024
Almost three weeks ago, the announcement of the British Airways airline caused a stir that it would cancel its flights from London-Heathrow to Beijing from 26. October to November 2025. This was preceded in mid-July by the announcement of the British airline Virgin Atlantic that it would completely withdraw from the business of flights from the United Kingdom to the People's Republic. 1] The British companies had already lost massive market share: In August 2014, they had still provided around 54 percent of all seats on the flights between Great Britain and China, it is currently only 12.6 percent. 87.4 percent are held by Chinese airlines, above all by Air China (27.4 percent). 2] This is not a marginal. Unlike on the European continent, the number of flights to the People's Republic of China in Great Britain now clearly exceeds the volume before the pandemic: The number of seats in mid-August was around 137 percent of the comparative value from 2019. The aviation business with the huge Chinese market is considered to be extremely attractive in the aviation industry in the long run.
The fact that British Airways and Virgin Atlantic have now had to suspend their flights to a large extent is a consequence of the Western sanctions policy against Russia. The EU and the European NATO countries had closed their airspace to all Russian aircraft immediately after the start of the Ukraine war. Moscow had responded by closing Russian airspace to European aircraft. Since then, they have had to accept annoying detours, longer flight times and higher fuel costs for flights to Asia - including China. Most recently, twelve hours and 48 minutes were measured for a flight with British Airways from Beijing to London; the machine had to take the detour via Central Asia and the South Caucasus. 3] A flight with Air China, on the other hand, lasted only nine hours and 44 minutes; the machine could use the shortest route over Russian territory, since the Russian airspace is not closed to Chinese aircraft. Because the considerably longer flight duration not only drives up fuel costs, but is also unattractive for customers, the British airlines felt compelled to sharply reduce flights to China. In the future, there will only be British Airways flights to Shanghai - a market share of a measly 6 percent.[ 4]
The situation is similar for all other Western European airlines - including Lufthansa. This is evidenced by data from the British data analysis company Cirium, which specializes in aviation, which the Handelsblatt has evaluated. Specifically, it concerns flights between Frankfurt am Main, Munich, London or Paris to Beijing or Shanghai. Not only British Airways and Virgin Atlantic, but also Air France and Lufthansa have come under strong pressure due to the longer flight routes; for example, Lufthansa must provide "30 percent more fleet and personnel" for its flights to China in addition to the higher fuel costs. 5] The pressure has led to the fact that the market share of British Airways, Virgin Atlantic, Air France and Lufthansa fell by 39.1 percent compared to 2019; the market share of Chinese airlines, on the other hand, increased by 31.1 percent in the same period. Chinese airlines have already provided 68.8 percent of all seats on the flights between the aforementioned airports in Europe or China. Due to their cost and time advantages, the Chinese airlines have the best chance of further expanding their leading market position.
For Lufthansa, this is considered fatal. Its Asian business claimed almost a third of its seats in 2019 - i.e. immediately before the Covid-19 pandemic - and it brought in around 19 percent of the passenger business's sales.[ 6] It was considered a highly important future market. The problems, especially with flights to China, were recently cited as one of the causes of the drop in profits in the spring quarter of around 50 percent. 7] While Lufthansa will reduce the number of its flights to the People's Republic from October, Chinese airlines want to expand their activities - but according to the Handelsblatt, they are slowed down by the Federal Ministry of Transport. This approves the Chinese competition only four additional flights in the week from summer 2025 and four more from autumn 2025, while German companies can carry out an additional 17 cargo flights. 8] A ministry spokesman is quoted as saying that "the competitive situation" is carefully kept in mind: "For this reason, we have ensured that the increase in passenger flights [Chinese companies] was moderate and does not take place in stages until next year." The Handelsblatt explicitly attributes this to "Lanhansa's lobbying work".
While the Western sanctions policy hits back on the European airlines and gives them the loss of market share to the Chinese competition, the sanction damage to the Russian aviation industry hoped for in the West has so far remained. Already in the spring it was said that the total number of flights in Russia had decreased from 1.49 million in 2021 to 1.26 million in the first year of the war in 2022. Last year, however, it had already risen again to 1.28 million. 9] "The expected erosion processes in Russian aviation have not happened," an expert was quoted in May. Also with regard to the number of air passengers, the sanctions are "two and a half years after the start", an employee of the Munich consulting company H&Z stated in mid-July. 10] Of course, there are problems with the procurement of spare parts for passenger aircraft of Western design. Because these are not available in sufficient numbers, Russian airlines have to improvise - for example, install copied spare parts or extend maintenance cycles. This now threatens to be at the expense of air traffic safety to a considerable extent.
Moscow therefore filed a complaint with the International Civil Aviation Organization (ICAO) last year: The Western sanctions, explained the Foreign Ministry, endangered the safety of international civil aviation. 11] Reactions to this in the West remain until today. Even Western specialists, who are in principle in favor of the sanctions, are warning of consideration. "The connection of civil aviation to the war" is by no means "narse enough" to justify such far-reaching punitive measures, for example, sanctions lawyer Viktor Winkler, professor of business law at the IU International University, is quoted as saying. "If such a restriction also means that human lives could be in danger," Winkler says, "this is an example of the fact that the EU sanctions policy is really in blind flight in some areas."[ 12]
[1] Philip Georgiadis: British Airways to suspend flights to Beijing as Russia diversion adds costs. ft.com 08.08.2024.
[2] UK-China: British Airways and Virgin Atlantic withdrawals increase Chinese airline dominance. centreforaviation.com 22.08.2024.
[3] Philip Georgiadis: British Airways to suspend flights to Beijing as Russia diversion adds costs. ft.com 08.08.2024.
[4] UK-China: British Airways and Virgin Atlantic withdrawals increase Chinese airline dominance. centreforaviation.com 22.08.2024.
[5], [6] Martin Benninghoff, Jens Koenen, Josefine Fokuhl: Chinese airlines conquer Europe - Lufthansa calls Brussels for help. handelsblatt.com 26.08.2024.
[7] Christoph Schlautmann: Lufthansa almost halves profits in the spring. handelsblatt.com 31.07.2024.
[8] Martin Benninghoff, Jens Koenen, Josefine Fokuhl: Chinese airlines conquer Europe - Lufthansa calls Brussels for help. handelsblatt.com 08.26.2024.
[9] Sanctions against Russia's aviation have only limited effect. airliners.de 06.05.2024.
[10] Mareike Müller, Jens Koenen: Russian aircraft become a risk - Western spare parts are missing. handelsblatt.com 07/17/2024.
[11] Elena Teslova: Russia files complaint against West's violations of civil aviation safety rules. aa.com.tr 11.10.2023.
[12] Mareike Müller, Jens Koenen: Russian planes become a risk - Western spare parts are missing. handelsblatt.com 07/17/2024.