Absence of Chinese airlines in Australia pushes up cost of flights to Europe

Want to fly to Paris in mid-September for a three-week break to take in the wonders of late summer in Europe? From either Melbourne or Sydney, you might grab an economy class airfare with a budget carrier at around $2200 but fly with a premier-league airline and you can expect to pay between $3500-$5000.

Airfares have gone through the roof. In July 2022 you're paying for a long-haul economy class seat what would almost have got you into premium economy before the pandemic. A premium economy seat? Expect to pay close to what a business fare would have cost in 2019.

What's happened?

Increased fuel prices are part of the reason we're paying more to fly to Europe, but another big factor is the lack of low-price competition. In May 2022 a total of 51 international airlines operated scheduled passenger services to Australia. That's 10 fewer than in May 2019. Big deal you might think, but most of those airlines no longer in our skies are China-based carriers, and that's where the problem lies.

Before the pandemic struck, those Chinese carriers gave Aussie travellers plenty of reasons to cheer. If you wanted a bargain basement airfare to Europe, whether economy or business class, chances are you flew aboard one of those Chinese airlines. Even if you flew with another airline, the Chinese carriers exerted downward pressure on the prices other carriers could charge.

Before the pandemic Chinese airlines had become a huge presence in Australian aviation. Underpinned by the vast number of Chinese tourists flooding into Australia – over 1.44 million in the 12 months to November 2019, a four-fold increase over the previous decade – China's air services to Australia rocketed. In 2009 there were three China-based carriers flying into Australia. A decade later there were nine. As well as multiple flights daily to Beijing, Guangzhou and Shanghai they offered non-stop flights to destinations as exotic as Kunming, Chengdu, Xiamen, Hangzhou and Qingdao.

The Chinese government even made it easy for Australians to have a stopover holiday with 72-hour visa-free entry to 18 Chinese cities, and 144-hour visa-free entry to a handful of others. Visa-free entry was simple. You showed up at the check-in desk and told the staff you'd be applying for visa-free entry. On board the aircraft you filled in the arrivals document, headed for the visa-free counter and presto – you were in.

Australia was keen to play ball, welcoming Chinese tourists with open arms. In December 2016 the government announced its intention to offer fast-track visa processing to Chinese tourists, confirming the introduction of 10-year, multiple entry visas for eligible Chinese visitors. The announcement was part of an open skies deal brokered between China and Australia, removing all capacity restrictions on their respective airlines.

In the first six months of 2019 the nine China-based airlines operating passengers services into Australia carried a total of 915,641 passengers. Assuming an average passenger load of 300 per aircraft, transporting those passengers would have required over 3000 flights. In the same six-month period in 2022 that number had shrunk to just three carriers and they transported a total of 22,251 passengers. That's a quarter the number carried to and from Australia aboard just one Chinese carrier, China Southern Airlines, in the single month of January 2019.

In their absence, the remaining carriers have seized the opportunity and jacked up their prices on their European flights. Who could blame them? It's been a dry couple of years, they're carrying huge debt and they're taking advantage of a surge in demand coupled with strangled supply.

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Will the Chinese carriers return?

Not until the Chinese government allows its citizens to travel freely overseas, and right now they can't do that except for essential reasons. Even when those restrictions are relaxed Australia might not be in the frame. The Chinese government has been quick to weaponise the vast number of its citizens who travel overseas, turning off the tap of travellers as it chooses, and right now Australia is in China's sin bin. If we want to return to China's warm embrace, we would need to button our lips, buckle to the demands of a more powerful and aggressive China and eat humble dumplings. So better get used to paying more for your airfare if you want to visit Europe. On the plus side, no international tourists from China means cheaper accommodation in Asia.

See also: Aussies flock to restriction-free Europe for northern summer

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