Observation of the International Air Transport Market: With a rebound in total volume and structural changes, how can we provide good international air transport logistics services?
Observation of the International Air Transport Market: With a rebound in total volume and structural changes, how can we provide good international air transport logistics services?
The winter and spring flight season of 2025 has begun, and recently, several foreign airlines have made adjustments to their flights to China. Lufthansa, Scandinavian Airlines, Polish Airlines and other European airlines have announced the suspension of their routes to China, which has attracted attention.
At the same time, Delta Air Lines announced that it will resume direct flights from Shanghai Pudong to Los Angeles in June 2025, with three flights per week; Saudi Airlines will open direct flights from Beijing Daxing to Dammam on October 28th, with 2 flights per week; Kenya Airways plans to launch direct flights from Nairobi to Beijing; Singapore Airlines will expand its network route layout in mainland China, covering 7 cities and 8 airports, and gradually increase flight density to 98 flights per week. As of now, the overall volume of international passenger flights has recovered to about 80% of pre pandemic levels.
Undoubtedly, with the development of China's economy and the continuous promotion of high-level opening-up, this huge aviation market with enormous potential will still maintain strong appeal to domestic and foreign airlines. Under the new situation, how to make this "cake" bigger and better will also be an important issue that China's civil aviation needs to continue to pay attention to in the process of improving quality and efficiency, and pursuing higher quality development.
Market factors drive route adjustments
Recently, Lufthansa announced that it will suspend its Frankfurt to Beijing route from the 2024/2025 winter and spring seasons; Scandinavian Airlines announced a temporary withdrawal from the Chinese market and suspended its Copenhagen to Shanghai route; Polish Airlines announced that it will suspend its Warsaw to Beijing route from the 2024/2025 winter and spring seasons. Previously, Virgin Atlantic and British Airways also suspended their flights from London Heathrow to Shanghai and Beijing. Several experts believe that the route adjustments made by some European airlines are independent business activities under the influence of market regulation.
Generally speaking, the market demand for winter and spring air seasons in the Northern Hemisphere is lower than that of summer and autumn air seasons. Airlines usually adjust their capacity arrangements accordingly during the season change, resulting in a decrease in flights after the start of the winter and spring air seasons. The flight schedules of European airlines during the winter and spring seasons have decreased compared to the summer and autumn seasons, and the overall trend of changes is consistent with before the epidemic, which is also in line with the characteristics of flight scheduling in previous years.
In addition, due to the impact of route detours, the operating costs and revenue of European airlines' routes to China have increased. Li Xiaojin, Director and Professor of the Institute of Aviation Economic Development at Civil Aviation University of China, and Deputy Director of the Center for High Quality Development of Civil Aviation, stated that the Russian airspace bypass has greatly increased the flight time, fuel consumption, and labor costs of European airlines on routes to China.
At the same time, it will also affect the overall production factor arrangement, flight punctuality, and subsequent services, increasing operational complexity. For profit reasons, some European airlines have adjusted their global route layout based on their close ties with the United States, Japan, and South Korea, and have allocated more capacity to routes with their own advantages and higher ticket prices, such as the United States, Japan, and South Korea.
Experts from Kapoklog Logistics' international transportation department and international air transport business department believe that the current changes in China's international route structure also reflect the transformation of the global civil aviation market. Domestic and Middle Eastern airlines are gradually improving their competitiveness with advantages in cost control, geographical location, service experience, and transit network, while traditional European and American airlines are facing greater challenges.
The current recovery level of domestic airlines in the international air transport market has reached over 90% before the epidemic, while foreign airlines have reached about 60% before the epidemic.
Nevertheless, airlines from various countries still maintain a high level of attention to the Chinese market. A spokesperson for British Airways stated that they have always valued the Chinese market and the suspension of London to Beijing flights is only a temporary measure. In addition, they will continue to operate daily flights to Shanghai and Hong Kong. Christine Rovelli, Chief Revenue Officer of Finnair, also stated that Finnair continues to operate flights to China as planned, closely monitoring the Chinese market and has announced an increase in capacity in the summer of 2025 to achieve more efficient operations.
"The Belt and Road" affects new market opportunities
Data shows that there are regional differences in the level of international flight recovery. Compared to European, American, and Oceanian airlines, Asian and African airlines have a better recovery level, with 36 operating at over 80% of pre pandemic levels. Among them, the "the Belt and Road" co built countries have performed well. According to the flight steward data, the passenger flights between China and the "the Belt and Road" countries and regions accounted for 70.8%, 3.2 percentage points higher than before the epidemic.
In recent years, the "circle of friends" of jointly building the "the Belt and Road" to promote China's three-dimensional connectivity has continued to expand.
As of the end of 2023, Chinese enterprises have established 17000 overseas enterprises in the joint construction of the country, with a direct investment stock of over 330 billion US dollars.
According to Li Xiaojin's analysis, the "the Belt and Road" co built countries have provided impetus for the resumption of flights by promoting economic, trade and people to people and cultural exchanges. Taking Kazakhstan as an example, the logistics cooperation base between China and Kazakhstan in Lianyungang (3.700, 0.03, 0.82%) has become an important hub for trade between Central Asian countries and China. A large amount of goods circulate between China and Kazakhstan, resulting in frequent business exchanges between the two countries.
The travel demand of enterprise representatives, traders and other personnel has significantly increased. The passenger flow of routes from Almaty, Astana and other cities to Beijing, Shanghai, Urumqi and other Chinese cities continues to rise. The airlines of the two countries adjust flight plans and increase capacity investment according to market demand. In addition, hub airports such as Urumqi Diwobao International Airport and Kunming Changshui International Airport have optimized their route layout and schedule, continuously strengthened their route connections with neighboring countries and regions, and further improved the efficiency of air transportation.
Recently, Serbian Airlines has opened a route from Belgrade to Guangzhou and will launch a direct flight from Belgrade to Shanghai starting from January 11, 2025. We are continuously increasing our capacity investment in the Chinese market due to our in-depth analysis and firm confidence in the Chinese market.
The relevant person in charge of Serbian Airlines stated that the Tianjin Belgrade route, which will be opened in 2022, and the recently opened Belgrade Guangzhou route have high seat occupancy rates and frequent business and leisure travel. In addition, they have deep cooperation with Chinese airlines and expanded cooperation in cargo and third-party business fields, hoping to enhance the complementarity of the global route network and provide passengers with more diversified travel choices.
Qi Qi, associate professor of Guangzhou Civil Aviation Vocational and Technical College, said that the joint construction of the "the Belt and Road" has a positive impact on the recovery of international flights. China's international route network is currently showing structural changes. The "Air Silk Road" to and from Central Asia, the Middle East, Eastern Europe, Central Europe, North Africa, Central Africa and other countries and regions along the "the Belt and Road" is gradually taking shape, with new destinations, routes and flight encryption, promoting the convenient communication of people along the "the Belt and Road".
Strengthen the attractiveness of the Chinese aviation market
According to the data of the National Migration Administration, 8.186 million foreigners entered the country at all ports in the third quarter of this year, up 48.8% year on year; Among them, 4.885 million people entered through visa free entry, a year-on-year increase of 78.6%. As of now, China has achieved comprehensive visa free access with 24 countries, implemented visa free entry policies for 16 countries, and implemented 72 hour or 144 hour transit visa free policies for 54 countries. The visa free policy and a series of facilitation measures have driven up the popularity of inbound tourism. According to Ctrip data, as of October this year, inbound travel orders have more than doubled year-on-year.
Several experts maintain an optimistic attitude towards the future development of China's international air transportation market. Han Tao, an expert from the Civil Aviation New Think Tank, said that the Chinese market still has strong appeal. With the continuous growth of China's economy and the improvement of people's living standards, the demand for international travel and business exchanges will continue to increase.
The accelerated construction of modern national comprehensive airport systems and air traffic management systems will also further improve the coverage and operational efficiency of aviation services. According to Li Xiaojin's analysis, there are about 1.2 billion people in China who have not left the country, and there will be strong demand for going abroad in the future. The potential market will gradually become a real market. For foreign airlines, the current period is an opportunity to seize important airport resources in China. Therefore, airlines in the Middle East, Africa and other regions are actively increasing their capacity in China.
At present, China's civil aviation transportation scale has ranked second in the world for 18 consecutive years. It is predicted that the potential of China's aviation market is still huge and may become the world's largest aviation market in the future. How to leverage the dual roles of an effective market and a proactive government to promote the recovery and development of China's international air transport market, shifting from "increasing supply, promoting recovery, and expanding market share" to "maintaining stability, optimizing structure, and improving quality"?
Kapoklog Logistics believes that the resumption of international flights is closely related to macroeconomic development and external exchanges. It is necessary to further promote the development of the tourism market, optimize immigration policies, improve the level of living convenience in China, and strengthen external exchanges to attract more foreign tourists to China and expand the international market "cake".
Kapoklog Logistics suggests that the civil aviation management department continue to encourage Chinese and foreign airlines to open more international routes to different countries and regions based on market demand and tourism hotspots, especially routes to emerging tourism markets and potential areas, such as strengthening route connections with South America, Africa, and other regions; Encourage airlines to optimize flight schedules, improve flight punctuality and connectivity, facilitate international passengers' transit and travel, and actively implement relevant policies and measures such as the Guiding Opinions on Promoting the Construction of International Aviation Hubs.
Support Chinese and foreign airlines to optimize service products through code sharing, cooperation and joint ventures, continue to strengthen cooperation with foreign airlines, attract transit passengers from Europe to Australia, Europe to Japan and South Korea, enhance the influence and competitiveness of Chinese airlines and airports in the international market, and attract more foreign airlines to participate in China's air transportation market.
Shenzhen Kapoklog Logistics suggests actively promoting high-quality tourist destinations in China, making good use of cultural and tourism IPs with international promotion potential such as "Black Myth: Wukong", "Song and Yuan Quanzhou", "Colorful Guizhou", "Colorful Yunnan", etc., increasing publicity efforts, attracting more foreign tourists to travel and exchange in China, and exploring more sources of foreign tourists. He stated that the resumption of international flights is closely related to the effectiveness of China's high-level opening-up and high-quality international exchanges. In the future, the greater the global confidence and participation in China's economic development, the stronger the attractiveness of the Chinese aviation market to airlines from various countries.
