Chinese Airlines Expand US Operations as Capacity Increases
Chinese airlines will in April increase the amount of bellyhold capacity they operate on flights to the US following approval to expand operations.
The US Department of Transportation has from April authorised China-based airlines to increase the number of weekly flights they carry out between the US and China from 35 to 50.
“We believe that our present action is a significant step forward in further normalisation of the US-China market in anticipation of the Summer 2024 traffic season,” the DoT explained.
Following the approval, Air China will operate 14 weekly services, China Southern will operate 10, China Eastern 12, Xiamen Airlines five, Hainan Airlines six and Sichuan Airlines three.
However, this remains down on the more than 150 round-trip flights that were allowed by each side before restrictions were imposed as a result of the Covid pandemic.
The move comes as airfreight rates on services from China to the US have been increasing.
In its latest weekly market update, airfrieght rate data provider TAC Index said that rates out of China continued to edge up, despite the Ching Ming festival when activity often slows.
Prices out of Shanghai were last week up by 8.4% compared with a week earlier, while they were 8.2% ahead of last year.
Judah Levine, head of research at rate portal Freightos, said that the increase in capacity could ease some pressure on rates on the trade lane.
He added that air cargo volumes out of China were being driven by growing demand for business-to-consumer e-commerce out of China.
“Online retailers like Temu and Shein are increasingly buying up air cargo space to the west,” he said.
Freight forwarder Dimerco recently reported that e-commerce demand had led to many block space agreements selling out.
While Chinese carriers seem keen to increase operations to the US, take up in the other direction has been slower.
The three largest US airlines in March said they are pushing back until at least late October the resumption of many flights to China that they cut early during the Covid-19 pandemic.
American Airlines, Delta Air Lines and United Airlines received authority from the DoT to delay by another 90 days the resumption of nearly 100 weekly flights to China, according to regulatory documents released on March 5.
The US carriers hold DOT-issued approvals to fly specific routes to China, doing so under requirements laid out in the US air transport treaty with China. The DoT can take back those approvals if carriers fail to operate the flights.
Throughout the pandemic, the agency issued waivers in 90-day chunks permitting the US carriers to keep the flights grounded without the risk of losing the flight permissions. The DoT issued fresh waivers, which run through 26 October, in February.
The US airlines had urged the DoT to act, saying demand for flights to China remains depressed.
