U.S. airlines that once thought of nonstop routes to China would be a bonanza are finding that between higher fuel costs and ramped-up competition from Chinese carriers some routes have become “colossal loss makers.”
That assessment came from American Airlines vice president Vasu Raja as he discussed American’s pullback from some of its hard-won China routes, especially from Chicago (see earlier TG News), where it is in tight competition not only with Chinese carriers but with United, the leader in U.S.-China connections. It’s concentrating on more profitable China routes, including from San Francisco and DFW.
While fuel prices were at historic lows, airlines could make a slim profit or small loss on services they hoped would grow. With fuel costs up about 40% in the past year, many of those hopeful routes have become costly and the airlines are adjusting routes and capacity.
Hawaiian Airlines, which had daily service to Beijing for a time cut back to three times a week a few months ago; it has now announced the service will be suspended altogether, although, like American, it hopes to resume later.
Delta and United haven’t made any changes lately, although United’s ambitious expansion of China service to several more Chinese cities a few years ago has also been discontinued.
