Western airlines were excited about returning to China after Covid. But not anymore

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When China finally reopened its borders after years of Covid restrictions, Western airlines seemed poised to return to the once bustling market.

Last year, foreign carriers scrambled to reinstate direct routes to the world’s second biggest economy, previously known for its export of lavishly spending tourists. Some even touted plans to boost flight schedules.

But fast forward a year, the mood looks strikingly different.

Several Western airlines are slashing flights they brought back just a year ago, with aviation industry analysts citing lukewarm demand due to China’s slumping economy.

Higher operational costs and extended flight times incurred by Moscow’s war on Ukraine — as Western airlines skirt Russian airspace — have also squeezed their margins and made them less competitive than their Chinese rivals, which have benefited from a long-standing preference by domestic travelers for Chinese-speaking crew.

Adding to those woes, tense geopolitics have dashed hopes for the full resumption of flights between China and the United States and some close Washington allies, as Western tourists mostly look elsewhere.

“Foreign airlines did not recover international capacity to China as quickly as Chinese airlines recovered international capacity from China,” said Steve Saxon, a partner at McKinsey, who leads the consulting firm’s China research team on travel, logistics and infrastructure.

“Even before reaching the pre-Covid levels, foreign airlines are now pulling back their flight capacity because they have more profitable opportunities elsewhere within