The international aviation market has recently experienced fresh turbulence, as another wave of flight suspensions by foreign airlines in China has drawn widespread attention. Scandinavian Airlines (SAS), a new member of the SkyTeam alliance, announced the cancellation of its only direct route to China—the Shanghai-Copenhagen flight. The news quickly sparked heated discussions on social media. Many travelers discovered their November SAS bookings had been canceled, leaving them with no choice but to reschedule or request refunds. This abrupt change caught passengers off guard and raised questions about SAS's future strategy in the Chinese market.

Declining Demand and Extended Flight Times

This wave of suspensions is not isolated. Several European airlines have already paused flights to China due to decreased demand and extended flight times caused by the need to avoid Russian airspace. For instance, Lufthansa has temporarily ceased its Beijing-Frankfurt direct route for the 2024 winter schedule, while British Airways and Virgin Atlantic have suspended flights between London and Shanghai or Beijing.

Unlike China's three major airlines, foreign carriers operate as market-driven entities. A senior executive from an international airline candidly noted that profitability is the sole criterion for retaining or cutting routes. Deploying aircraft, pilots, and crew on unprofitable routes is a financial burden few carriers can justify. Yet, from a long-term perspective, the Chinese market remains an enticing prospect for European airlines, akin to a delicacy too tempting to relinquish entirely.

A Strategic Shift Amidst Market Dynamics

The ongoing National Day "Golden Week" holiday demonstrated China's recovering outbound travel market. Platforms like Ctrip and Tongcheng reported outbound travel bookings exceeding 2019 levels, with smaller cities driving new growth. For European airlines, suspending or downsizing their China routes effectively hands over a vast market to Chinese carriers or Middle Eastern airlines capable of connecting passengers to Europe via transit hubs.

Lufthansa provides a vivid illustration of this strategy. While the airline has suspended its Beijing-Frankfurt route, it continues to operate its flagship Airbus A350-900 on the more profitable Beijing-Munich route. Munich, home to BMW's headquarters and a popular tourist destination guarantees a stable flow for business and leisure travelers. By contrast, the Beijing-Frankfurt route, overly reliant on business travel, reportedly saw embarrassingly low passenger counts—sometimes as few as a dozen per flight—during the spring. This "cutting the weak to save the strong" strategy highlights Lufthansa's pragmatic market approach.

Rising Competition and Potential Regulatory Backlash

As Chinese airlines gradually dominate the China-Europe market, bolstered by their growing fleet and aggressive pricing strategies, questions arise about whether Europe will respond with reciprocal regulatory measures. Against the backdrop of surging Chinese electric vehicle sales in Europe and the European Union's impending tariffs on Chinese goods, the balance of trade and competition between China and Europe may soon extend into the aviation sector. The competitive dynamics on China-Europe and China-US routes remain critical, as any significant absence of domestic or foreign airlines could profoundly reshape the market landscape.

Collaboration or Retreat?

With increasing competition and constrained market share, European airlines retreating from China are left to rely on partnerships within their alliances, sharing routes and revenue with Chinese carriers. However, this strategy reflects a reluctant compromise rather than a sustainable solution. Revenue-sharing partnerships do little to address the two sides' deeper competitive and profit allocation conflicts.

The Path Forward

As market competition intensifies and the international environment grows more complex, Chinese and foreign airlines must adopt a more pragmatic perspective on their relationship. A more equitable and reasonable framework for collaboration and competition is essential to achieving mutual benefits. This approach not only aligns with the inevitable trends of market development but also plays a pivotal role in fostering the long-term health and growth of the global aviation industry.