Consolidation, cost-cutting and pilot shortages continue to shrink most airlines in the US, but in China policy reform, new low-cost start-ups, and a continued rise in passengers mean the opposite is true.
This summer, Chinese carriers will hit a significant milestone: they will overtake their US counterparts when measured by the weekly number of flights between the United States and China, according to the Center for Asia Pacific Aviation:
That shift could open another battlefront for US airlines, which are already fighting the expansion of Gulf carrier flights into the US. “For years the US has wanted open skies, while China, whose airlines were smaller than America’s, wanted gradual expansion,” CAPA noted. “But now the tables are turning…consumers, tourism bodies and the US government may have another fight looming.”
US airlines have argued that Gulf carriers, some of which are backed by oil-rich governments, have unfair advantages. The same could be said of China’s international airlines, which received $1.1 billion in publicly-declared subsidies in 2014. “Without the subsidies, some Chinese carriers’ trans-pacific routes would simply not be offered,” CAPA said.
Chinese airlines have other advantages, namely a domestic population three times the US’s, and the proximity of other tourist destinations and densely populated cities in Asia, which allows these airlines to increase aircraft and routes while US carriers remain stagnant. Just 4% of Chinese owned passports in 2012, the year that Chinese travelers overtook Americans and Germans as the top international travelers. Last year, an estimated 112 million Chinese traveled overseas.
Right now, US airlines, which have for decades been the world’s largest, still dominate, in terms of total passengers:
But that won’t last for long. The US is expected to remain the largest air passenger market until 2030, the International Air Transport Association predicts, a figure that includes traffic to, from, and within the US. At that point, the Chinese passenger market will become the world’s largest. Judging by this summer’s pending milestone, China’s airlines may be moving more passengers long before than.