Transportation administration officials have confirmed that regularly scheduled international passenger flights from China are set to increase in the coming days. The announcement comes as Beijing rolls out an extensive economic stimulus plan that includes several significant provisions for the country's aviation industry.

The 33-point recovery plan revealed at the end of May called for the gradual reopening of international borders and a cash incentive for airlines to maintain domestic connectivity services. These measures seek to stabilize the income of frontline air employees and offset operating expenses, especially for small and medium-sized Chinese airlines.

The phased reopening of international borders.

One of the critical points of the package was the reinstating of international air service to mainland China. Travel bans due to the pandemic have largely inhibited international travel, with China retaining consistently strict border policies throughout the pandemic.

In March 2020, the Civil Aviation Administration of China (CAAC) launched the "Five One" policy, which stated that Chinese airlines could fly just once a week on one route to any country, while foreign airlines could operate just one flight a week to China. Although international air travel within Asia has increased in frequency over the first quarter of 2022, it has only recovered to 7 % of its pre-pandemic level in 2019, according to the International Air Transport Association (IATA).

When asked by reporters at a press event this week, the Director of the Ministry of Transport, Liang Nan, confirmed the administration is discussing with several countries to gradually increase regular international passenger flights to cater to travel needs.

Liang noted that the operation of international flights is key to the sustainable development of the air transportation industry, the movement of Chinese and international travelers, and China's overall economic growth,

"Since the outbreak of the COVID-19 epidemic, the administration has taken scientific, precise and dynamic measures to manage and offer international passenger flight services, effectively preventing the spread of the epidemic across borders while maintaining basic access to regular international passenger routes with 54 countries."

Just over 12 million passenger trips were made in May, up 53.2 % from the previous month, according to data from the CAAC.

Upcoming potential international destinations.

Several critical markets will resume direct flights to China in the coming months. The country's largest airline, China Southern, announced it would be increasing its international schedule to 48 flights per week, up from 36. The move sees service resume to seven additional countries. Guangzhou to Yangon, Myanmar; Phnom Penh, Cambodia; and India's Delhi International Airport.

One of the more exciting destinations to receive service will be Uganda. Approval has been granted for weekly flights between Entebbe International Airport and Guangzhou, building on an existing cargo link. Before the COVID-19 pandemic, more than 25,000 passengers traveled from China to Uganda, according to data from 2019. Uganda Airlines recently announced that direct flights to London Heathrow using an Airbus A330-800neo would begin in November.

Flights to Nepal have also resumed after a two-year hiatus. Simple Flying reported a weekly service from Kathmandu Tribhuvan International Airport (KTM) to Kunming Changshui International Airport (KMG) began earlier this month. A return to Kathmandu was also in the cards for Air China, which resumed its link from Chengdu.

Several other destinations in the region have also reportedly been in discussion for capacity increases. Vietnam has been approved for an additional weekly flight. Thai Airways International is also set to resume flights to China this month after being granted flights twice a week, up from one flight per week previously,

Flights to Europe are also set to increase, with Hainan Airlines resuming direct flights from Chongqing in Southwest China's Sichuan Province to Rome on June 23rd. The Rome flight is the first intercontinental international passenger route from Chongqing since the start of the pandemic.

Steps to reinvigorate the domestic market

The stimulus plan also includes a provision to help offset the cost of domestic flights as most international services are yet to resume. A stimulus package of 150 billion yuan (USD 22.4 billion), with a further 200 billion yuan in bonds, is set aside to subsidize loss-generating domestic flights from May 21st to July 20th

The financial subsidies will be activated when the average daily domestic passenger flight volume falls to 4,500 flights. The threshold is the minimum number of daily flights to maintain safe operation, and the established quota is for mainland flights and does not include services to Hong Kong, Macao, and Taiwan.

Additionally, the subsidies only apply when each flight segment's average passenger load factor per airline does not exceed 75%. All domestic airlines are eligible and may apply for compensation of as much as 24,000 yuan ($3,564) per flying hour in weeks which lose money.

There are reports the subsidy program was suspended on June 4th, amid rising that airlines might intentionally reduce services to collect the subsidies. It remains unclear is the payments will resume for the remained or the duration.

Source: Reuters