For many years, capacity growth between China and the United States was a symbol of globalisation, emergent markets and - most importantly - increasing trade and tourism between the two countries. The number of scheduled flights between China and the US grew rapidly between 2000 and 2019. But since the pandemic, while most markets have recovered capacity, flights scheduled between two of the world’s largest markets are yet to regain 2010 levels. Why is this, and are there any winners in this situation?
Key takeaways
- China-US scheduled flight capacity has not regained 2010 levels, even though most global markets have recovered.
- The 2020 reset of the bilateral air service agreement capped each side at 50 weekly flights, versus an average of 343 weekly flights in 2018. That’s a loss of 243 weekly flights.
- Seoul Incheon is the clear winner: China-US transit passengers rose from an estimated 218,000 in 2018 to 855,000 in 2024, a four-fold increase.
How did China-US air travel develop between 2000 and 2019?
While there has never been an “open skies” agreement between China and the US, a series of liberalisation protocols in 2004 and 2007 had encouraged a rapid programme of air service development between the two countries, as the chart above illustrates.
The initial air service agreement had been built around an even share of frequency from Chinese- and US-registered airlines but the liberalisation of the bilateral agreement in the mid-2000s was perfectly aligned with growth in international services from Chinese airlines, many of whom operated Boeing aircraft. At the time this was a positive for US authorities.
From a near 50/50 share of frequency in 2005, by 2018 Chinese airlines had increased their frequency share to nearly 60% as the number of airport pairs operated increased and secondary Chinese markets secured services. In 2005 just nine airport pairs were served and by 2018 that had increased to 45; of those 45 airport pairs, only 18 were operated by US-based carriers. Clearly, China’s airlines were expanding their networks faster and deeper than their US counterparts and leakage of traffic through those secondary Chinese hubs and routes felt like a loss of potential traffic for the US airlines.
Why were US airlines frustrated by the China-US market before the pandemic?
Two competitive factors further frustrated the US-based carriers at the time, one of which was impossible to solve:
- With significantly lower costs (typically 30% below those of their US competitors), Chinese airlines were able to price flights below the cost levels of the big three US airlines. This gave them a clear advantage.
- The second factor was slightly more abstract - US airlines reported being unable to secure the necessary slots at airports such as Beijing and Shanghai for frequency expansion, despite seemingly available capacity.
Against such a market backdrop the 2020 pandemic provided a great opportunity to reset the bilateral agreement and return to a more equitable share of frequency. And the consequence of that reset has been dramatic.
How did the pandemic change the China-US bilateral air service agreement?
In light of the pandemic, the US requested a reset of the agreement, placing a limit of 50 weekly flights from both countries’ airlines; a significant reduction on the 2018 average of 343 weekly flights. Boeing has certainly lost aircraft orders because of this change in bilateral agreement, but what were the other effects?
Who benefited from fewer China-US flights? Seoul Incheon's four-fold rise in transfer passengers
The loss of 293 weekly flights - which is more than the weekly count of flights between London and New York - inevitably provided an opportunity for some, and in this case Seoul Incheon Airport has certainly gained.
Incheon was well placed to capitalise on the loss of direct services between China and the US and has become the major hub airport in Northeast Asia . In 2018, an estimated 218,000 passengers between China and the United States connected via Incheon; in 2024 the volumes had increased four-fold to 855,000 as a combination of new destinations and increased frequency to China created an alternate route for those wishing to travel.
What does this mean for the future?
Decreases in US – China capacity and the related increase in passenger volume at Incheon highlight that however politics may intervene in a market, the market will react by finding alternate ways to travel between two points. In this case Incheon is the benefactor. Similarly, Istanbul has recently benefited from the loss of direct access between Europe and Russia.
Ultimately, travellers will find solutions to changes in capacity very quickly, and perhaps as geopolitical situations unfold -as they always do – it is wise to take a long-sighted view of decisions made.
Where can I find China-US airline schedule and capacity data?
OAG Analyser+ provides independent airline schedule data, including the 7-day forward schedule, covering 900+ airlines. Explore China-US routes in OAG Analyser or contact us for API and Snowflake access.
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