Australia’s Qantas cancels flights to Shanghai due to low demand

(Reuters) – Qantas Airways said on Tuesday it would suspend flights to Shanghai from July 28 due to low demand, nine months after the Australian airline resumed operations from Sydney in hopes of a post-pandemic travel recovery.

The number of international flights to and from China is around 70 percent of pre-pandemic levels, but is recovering more slowly than in other markets due to lower tourist numbers and a slowdown in the domestic economy.

“Since COVID, demand for travel between Australia and China has not recovered as strongly as expected. In some months, our flights to and from Shanghai were only about half full,” said Cam Wallace, CEO of Qantas International.

Qantas aircraft on the Shanghai route will be diverted to other destinations in Asia with higher demand or new tourism opportunities, the company said.

Qantas will continue to closely monitor the Australia-China market and will return to Shanghai once demand recovers, the airline added.

“Since borders reopened, Chinese visitors have been slow to return to Australia, despite increased air travel capacity,” said Margy Osmond, CEO of industry group Tourism & Transport Forum Australia.

She said arrivals from China, now the fourth largest source of international visitors to Australia, in March were only 47% of pre-pandemic levels in March 2019. Before COVID-19, China was Australia’s most important tourism market.

Qantas continues to fly from Sydney and Melbourne to Hong Kong and has partnerships with other airlines for onward travel within China.

The airline announced a new route from Brisbane to Manila from the end of October, as well as additional flights to Singapore and increased flight frequency from Sydney to Bengaluru.

The Chinese aviation authority expects international flight volumes to return to 80 percent of pre-COVID levels by the end of 2024.

China’s domestic air travel capacity recovered more quickly, exceeding 2019 levels in early 2023, shortly after the country lifted travel restrictions.

Air traffic between the US and China is recovering the slowest but is still increasing. As the International Air Transport Association announced this month, capacity is currently only 16.5 percent of pre-pandemic levels.

(Reporting by Aaditya Govind Rao in Bengaluru and Lisa Barrington in Seoul; Editing by Sherry Jacob-Phillips, Gerry Doyle and Jamie Freed)