China’s airline industry has borne the full brunt of the tough COVID-zero policy. The Aviation authority said it may have lost billions since the epidemic began. The Russia-Ukraine war has also impacted flights that usually travel over Russian airspace.
The top aviation official revealed that from 2020 to this February, China’s civil aviation industry has suffered a cumulative loss of 211.1 billion yuan ($33.1 billion), of which 97.4 billion yuan ($15.3 billion) was lost in 2020 and 84.2 billion yuan ($13.2 billion) was lost in 2021.
China tamped down entry and quarantine restrictions as part of its zero-clearance strategy, which resulted in a drastic reduction in the number of flights.
The Chinese Communist Party (CCP) laid out tough anti-COVID-19 prevention and control measures targeting both internal rebound and external virus importation. For internal control, region-wide nucleic acid testing is implemented immediately when an infection is detected in a region, and people are restricted from moving freely.
For external importation risk control, the “Five Ones” measure was introduced to reduce international flights starting in March 2020, requiring each Chinese domestic airline to reserve only one route to any one country and to operate no more than one flight per week on each route, the so-called “one carrier, one country, one route, one flight per week” policy.
In addition, in June 2020, the Civil Aviation Administration of China (CAAC) implemented circuit-breaker measures on international passenger flights. The measure stipulates that if the number of infected passengers on the same route reaches five after arrival, the airline’s route must be suspended for one week; if the number of positive cases reaches 10, the airline’s route must be suspended for four weeks. After the circuit-breaker period is over, the airline is allowed to resume its one flight per week schedule.
In April 2021, CAAC escalated the circuit-breaker measures, such that if the number of infected passengers in two consecutive flights reaches 10 each, an eight-week suspension of operations is required based on previous measures.
In addition, the standard for a negative test in China is set even higher than in other countries. The cycle threshold (Ct) value for a positive PCR (polymerase chain reaction) test in China is 40. Therefore, more people may test positive in China.
Strict quarantine standards coupled with the circuit-breaker measures resulted in a large number of flight cancellations and a sharp drop in passenger traffic.
China Violates Global Aviation Regulations: US OfficialThe CCP’s excessive zero-clearance on the epidemic has sparked discontent and countermeasures from other countries.
The United States announced on Jan. 21 that it would suspend 44 U.S. flights to China operated by China International Airlines, China Eastern Airlines, China Southern Airlines, and Xiamen Airlines in response to the CAAC’s suspension of some U.S. airlines on the grounds of epidemic prevention, the Wall Street Journal reported.
In July 2021, the German government also criticized the China side’s cancellation of German airline flights as a distortion of competition, so Germany will also reciprocate by canceling the flights of some Chinese airlines.
Ukraine War Impacts China’s Civil Aviation
According to the statistics from VariFlight, a Chinese flight travel service app, on Feb. 28, China operated 62 international flights on the China-Europe route, while on Feb. 21, before the Russia-Ukraine war, it operated 97 international flights. The number of flights operated by foreign airlines to China and Europe was reduced from 12 to 3 due to the need to bypass Russian airspace.
Except for the reduction in flights, the soaring crude oil prices brought about by the Russia-Ukraine war added to the woes of China’s civil aviation.
According to Qi, aviation oil consumption accounts for more than 95 percent of the energy consumption of the entire civil aviation industry. Global oil prices are expected to remain high due to the U.S. economic sanctions against Russia, which will increase airline operating costs. Although airlines can partially offset the impact of high fuel prices by imposing aviation fuel surcharges, sluggish market demand prevents airlines from raising fares to relieve the pressure.
Qi suggested that Chinese airlines should give priority to China-controlled aircraft leasing services, and seize the opportunity to expand amid the reorganization of the global civil aircraft leasing landscape triggered by the disposal of Russian aircraft assets.
"The impact of the Russia-Ukraine war on China’s civil aviation industry and the global civil aviation industry has just begun," Qi said.