Ongoing Russia-Ukraine War Is Reshaping European And Chinese Aviation

Traveler with luggage watches airplane take off at airport.

The Russia-Ukraine conflict has opened doors for Chinese carriers vying for dominance, as European airlines grapple with closed Russian airspace.

At a Glance

European airlines face increased operational costs and route disruptions.
Chinese airlines capitalize on unobstructed routes, gaining market share.
Industry leaders propose leveling measures to address route disparities.
The European Commission’s potential actions remain uncertain.

European Airlines Struggle with Costs and Routes

The closure of Russian airspace due to sanctions imposed over the Ukraine conflict has forced European carriers like Lufthansa, British Airways, and LOT to alter or suspend routes to Asia. Longer detours to avoid Russian and Ukrainian airspaces result in increased fuel consumption and higher operational costs, making it challenging for these airlines to compete with their Chinese counterparts who continue to fly over Russia.

European leaders call for action against these competitive disadvantages, highlighting the need for uniform rules in air travel. Lufthansa CEO Carsten Spohr suggests that all flights into Europe must avoid Russian airspace to ensure fair competition. The call for competitive fairness has become urgent as operational costs rise with extended flight pathways.

The European Union has proposed new trade restrictions for the first time on three Chinese firms accused of supporting Russia’s war efforts in Ukraine https://t.co/YAPwsc9UNC

— Bloomberg Markets (@markets) February 12, 2024

Chinese Airlines Gain Strategic Advantages

Chinese carriers remain unaffected by airspace restrictions, posing a substantial challenge to European operators. With unrestricted access to Russian airspace, airlines like Air China, China Eastern, and China Southern have significantly expanded their presence and routes in Europe. Chinese airlines now hold a commanding 77% share of the China-Europe air traffic market, up from 50% pre-pandemic.

“It is a competitive disadvantage for the European carriers. That’s clear,” said Aletta von Massenbach, CEO of Berlin airport.

As they increase flight frequencies and expand routes, Chinese carriers dominate regional markets, capitalizing on the opportunity to transport passengers without detours. This leaves European airlines calling for measures to curb the competitive edge held by Chinese counterparts, who offer shorter travel times and cheaper tickets.

Tweets by SecBlinken

Future Prospects and Industry Concerns

European airlines continue to advocate for policy changes that address the imbalance. Air-France KLM is actively lobbying for flight caps on Chinese carriers to shield European aviation interests. Similarly, KLM CEO Marjan Rintel suggests Europe should consider alternative strategies, such as pricing adjustments, to mitigate competitive discrepancies.

“You could make a case that the airlines that have been impacted by the political decision should be compensated. But I doubt there’s much appetite in in the Commission or the European countries to do that,” said Willie Walsh, director general of the International Air Transport Association.

While the European Commission explores studying the competition on international routes, industry skepticism prevails. Many stakeholders in the aviation industry doubt any significant action will be taken. As European airlines await signs of recovery, geopolitical tensions continue to reshape the global aviation landscape.