In for the Long Haul: Developing a Sustainable Operating Environment for Airlines in China


The report provides analysis on China’s operating environment and its impact on the sustainability of European airlines active in China.

China’s current system governing airlines pushes Chinese carriers to adopt short-term strategies that emphasise global market share rather than efficiency and profitability, which will damage the long-term viability of both Chinese and foreign airlines. The resulting lack of competition on long-haul routes in China, along with the continuous flow of non-essential financial support from local governments, is boosting capacity beyond demand.

The report outlines how this situation can be rectified through reforms to China’s slot allocation procedures, financial support practices, air traffic management system and bilateral aviation agreements to bring China more in line with international norms. In the meantime, the report cautions European countries to fully understand the complexities of China’s market, particularly when renegotiating bilateral air traffic rights.

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