USA:s flygjättar i luftrumsstrid med Kina

United, Delta and American are pressing Washington to ban Chinese planes headed to or from the US from flying over Russia.

After three years of largely self-imposed isolation because of Covid‑19, China is finally reopening. But US airlines aren’t lining up to reinstate the once-abundant services between the world’s two largest economies. In pre-pandemic 2019, direct flights between the US and China by carriers from both countries averaged 340 per week. Today there are a maximum of just two dozen weekly.

The biggest US airlines—American, Delta and United—will keep flying at reduced pandemic-era levels, though not because they expect weak demand, according to people familiar with the matter, who asked not to be identified speaking about private discussions. Rather, it’s a dispute over Russian airspace restrictions that apply to about three dozen countries, including the US, but not to China.

The quiet standoff comes against the backdrop of an overall deterioration in relations between Beijing and Washington, clouding prospects for a quick diplomatic resolution. Meanwhile, Japan’s ANA Holdings Inc., IAG SA’s British Airways and Emirates Airlines are among carriers that have restarted, or announced plans to resume, daily flights to Chinese cities including Beijing, Guangzhou and Shanghai. Korean Air’s China service has reached pre-pandemic levels, growing from 13 weekly flights to 84 in April, with plans to expand to 99 this month, the airline says.

Air France is asking the French government to limit Chinese airlines’ access to the country, saying they enjoy an unfair advantage because they can fly over Russian airspace. But it’s also asking to more than double its own China-bound flights, to 14 a week.

American airlines aren’t interested in dialing up from the paltry 12 flights a week currently connecting the world’s two largest economies—at least not until Chinese carriers stop using Arctic routes over Russia to reach the US. That provides them an advantage in lower fuel costs and fares, as well as shorter flight times.

Andrew Nocella, chief commercial officer of United Airlines Holdings Inc., told analysts on an April 19 conference call that the carrier is “stuck” at four flights a week to China. “We are preparing to fly more than that,” he said. “Hopefully later this year we will be flying more to China, and we have the aircraft to do so if the conditions allow us to do so.”

The airlines and their lobbying group, Airlines for America, are pushing the Biden administration to block Chinese competitors from using Russian airspace. “This is something the government could do, should do, and is important to the competitiveness of not just the industry, but the competitiveness of the US,” says Keith Glatz, the group’s senior vice president for international affairs.

A senior Biden administration official said the White House is aware of the carriers’ concerns. “It can’t be business as usual with Russia in the face of Russia’s illegal war of aggression in Ukraine,” the official said.

Not all carriers based in China offer the same levels of service and US connections as American airlines do. So it’s unclear how many Americans other than the most budget-sensitive or those with a critical need to travel would choose a Chinese airline over a US carrier to save on the fare and shave an hour or two off the flight time.

But US airlines say the route disadvantage has cost the Big Three $2 billion annually, because carrying the thousands of extra gallons of fuel required for longer flights forces them to block off dozens of passenger seats and reduce cargo in planes’ holds. United and American Airlines Group Inc. have dropped some planned routes to India because they’re also too costly to fly around Russia.

Chinese airlines, many of which are state-owned, have little incentive to compromise. And geopolitical complexity may also prove a challenge. Calls to the Civil Aviation Administration of China, the country’s main airline regulator, for comment went unanswered.

There’s “zero chance” the Chinese would agree to a ban on using Russian airspace, says Christopher Johnson, chief executive officer of China Strategies Group, a political and financial risk consultant that advises clients on developments in the country. Meanwhile, the Biden administration “has more important things it wants to fight with the Chinese over,” he says.

Growing demand for flights between the two countries means money will be left on the table unless some sort of accord is reached. The number of people traveling between the US and China this year is projected to hit 1.75 million, about 32% of the 5.48 million who traveled in 2019, according to Tourism Economics, which analyzes the effects of economic activity on global travel. Tourism Economics expects US-to-China passenger numbers to regain 2019 levels in 2028; travelers from China to the US will exceed the 2019 number two years earlier, in 2026.

American Airlines CEO Robert Isom has said he’s hopeful for a diplomatic resolution. “There can’t be an unlevel playing field,” he told CNBC on April 27. “Until there really is a settlement to that, that’s going to stand in the way” of adding more flights.

US airlines haven’t sought the same sanctions for carriers based in India and the Middle East that also use Russian airspace, in part because governments there didn’t abandon aviation treaties with the US during the pandemic, say people familiar with the matter. Carriers in those countries also typically operate many fewer flights to the US over Russian airspace.

If an accord can be reached, airlines would like to add capacity. United, the most active trans-Pacific flyer, has soft plans to offer as many as 768 flights between the US and China from May through December this year, followed by 290 at Delta Air Lines Inc. and 158 at American, according to Cirium, an aviation analytics company. Such placeholder flights show how carriers plan for the eventual return of more substantive travel schedules, but airlines often don’t operate all the flights scheduled as long as a year in advance.

United already has its sights set on increasing its four weekly trips from San Francisco to Shanghai to daily once demand has built, and then resuming Beijing flights, according to a person familiar with the airline’s plans who didn’t want to be identified commenting on information that’s not public. The carrier has communicated its strategy to US government officials without providing details or making a formal request, and there’s no current time frame for adding flights, a second person says. For now, United is looking farther south, with plans to increase weekly flights to Australia and New Zealand by 40% later this year as part of a broader expansion across the Pacific and Atlantic.

Flights between China and the US were regulated before the pandemic by an air service treaty signed by the two nations. The US Department of Transportation took over governing inbound flights by Chinese carriers after that country unilaterally imposed limits on service by US airlines in 2020.

Although using Russian airspace gives China-based carriers a competitive advantage, imposing sanctions often results in a “tit-for-tat” response that could have unintended consequences, says Kenneth Quinn, a veteran aviation attorney who’s represented domestic and international airlines and aerospace companies.

“It’s just a terrible long-term strategy to try to weaponize airspace,” says Bill Voss, former director of the air navigation bureau of the International Civil Aviation Organization, a United Nations agency that coordinates planning and development of global air transport. “It’s far wiser to treat economic problems as economic problems.”

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