Image via WikipediaThe highly anticipated flying boom during Beijing Olympics is facing severe headwinds towards materializing. Even though some carriers like Singapore Airlines and airlines from the Middle Eastern are expecting demand to rise during the games, it is business as usual for most other airlines. In fact, many are initiating capacity cuts on flights to and from China in the weeks before the games. So, what went wrong?
High fuel prices result in flight cuts to China, regardless of the Olympics
As late as 2006, Chinese carriers like China Southern Airlines were openly upbeat about the demand for air travel during the Olympics, and frowning on Airbus’ inability to roll out the A380 in time for the air travel surge. In June 2008, barely two months from the Games, the Chinese carrier along with China Eastern Airlines, announced massive cuts in flights across its entire network .
US based airlines flying into China are singing a similar tune. US Airways won a hard fought battle when it secured rights to new slots between the United States and Beijing last year. Three months before the Olympic Games, it was requested the FAA for a one-year postponement to the inauguration of its hard-won Philadelphia- Beijing route, which recently approved. Similarly, United had asked for postponement to its San Francisco-Guangzhou inauguration.
These airlines have cited fuel prices as the main cause of cut backs. US Airways, for example, cited that the cost of operating the Philadelphia-Beijing route has increased exponentially from US$50 to US$90 million due to much higher oil prices. China Southern and China Eastern are also citing fuel costs as the reason for cutting back flights.
