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Airlines face hurdles to cashing in on China re-opening


US and European airlines will benefit from pent-up demand for travel to China after its recent border reopening, but route approvals, fresh COVID-19 testing rules and not enough large aircraft remain barriers to rising sales, analysts and industry officials say.

Travel is returning to China, the world’s largest outbound tourism market worth $255 billion in 2019, after the country ended mandatory quarantines on Jan. 8. Airfares from China are now 160% higher than before the pandemic, data from travel firm ForwardKeys shows, due to limited supply.

Iowa-based lawyer Jinying Zhan, 50, said he paid $1,600 for a one-way ticket in December to fly via Chicago and Dubai to Guangzhou.

“I haven’t visited my family in three years, so I will go to the spring festival with my sisters,” he said. “Flights were very expensive.” Before the pandemic, he used to pay $1,000 to $1,500 for a round trip direct flight from Chicago.

A round-trip fare from San Francisco to Shanghai on United Airlines for a week-long trip in early March costs $3,852 in economy class and $18,369 in business class, according to a Reuters search on the airline’s website.

Global airlines are running only 11% of 2019 capacity levels to and from China in January, Cirium data shows, but the figure is expected to hit 25% by April.

Booking website Expedia said it saw U.S.-China and Europe-China searches double after the reopening announcement.

Chinese airlines, with ample staff and widebody planes, and a cost and time advantage of roughly two hours from flying a more direct route using Russian airspace, are expected to be early winners.

Source: Live mint