Will China’s Reopening Finally Bring Down Airfares?

Since Australia reopened its borders to international travel, airfares have been relatively high. Award seats have also been hard to find on many international routes.

There have been many reasons for this including high demand, issues with Russian airspace and high fuel prices. But the main issue affecting Australia has been a lack of capacity, particularly from the Chinese airlines that operated a large number of flights to Australia before the pandemic.

Before COVID-19, that extra capacity and price competition from the Chinese carriers had placed downward pressure on airfares to Asia, Europe and North America.

In the 2018-19 financial year, over 4.5 million seats were operated between Australia and mainland China – with a further 3.5 million seats between Australia and Hong Kong (SAR). In fact, China was the third-largest market for international flights to/from Australia.

During the 2021-22 financial year (the most recent for which statistics are publicly available), only 165,000 seats were made available between Australia and mainland China. On average, those flights were less than half full.

Around 450,000 additional seats were made available to/from Hong Kong during the last financial year, although those flights operated on average with only 13% of seats filled. (The flights mainly carried freight.)

China has reopened its border

With China’s international border still closed until recently (and Chinese citizens required to quarantine upon returning), it’s not surprising that so few flights were operated between Australia and China last year. But the good news for travellers is that China reopened its international border on 8 January 2023.

Some other countries including Australia have imposed new restrictions – mainly COVID-19 testing – on people arriving from China. But travellers arriving in China are no longer required to quarantine.

It’s not yet clear when China will reopen to international transit passengers. But this will also make a big difference once passengers are again able to transit via China en-route from Australia to destinations including Europe and North America.

Chinese airlines are quickly adding capacity back into Australia

Many Chinese airlines had continued offering a skeleton service into Australia throughout the pandemic, but only with one flight per week on key routes.

Qantas has not yet committed to resuming its Sydney-Shanghai service. But Chinese airlines have been quick to restore capacity into the Australian market.

China Eastern has just increased its flights between Sydney and Shanghai. Next week, China Eastern and China Southern will both resume regular flights from Shanghai and Guangzhou to Melbourne. Meanwhile, Air China will shortly resume flights from Beijing to Sydney and Melbourne, Sichuan Airlines will resume Melbourne-Chengdu flights and Xiamen Airlines will also increase services to Sydney and Melbourne.

Initially, these flights are unlikely to be heavily discounted and are likely to be filled mainly by people travelling between China and Australia to visit family. But as things return to normal, the extra capacity should inevitably bring down airfares across the board – and not just on routes to China.

Even if you have no intention of flying to Europe via China, for example, the price competition will eventually bring down airfares on other non-Chinese airlines. That’s good news.

More award availability

The other good news is that China’s reopening will result in more award availability. For example, there are now lots of Classic Flight Reward seats available to book using Qantas points on China Eastern from Sydney and Melbourne to Shanghai – including in Business and First Class.

You may even be able to redeem Qantas points for a Business Class flight to Europe via Shanghai, using Qantas’ multi-city booking engine.

Before booking, do check the international transit requirements for travel via Shanghai. Note that the mainland Chinese airlines are using Russian airspace for flights between China and Europe, which is resulting in shorter travel times than flights on European airlines.

Cathay Pacific and Qantas have also released more award seats for travel between Australia and Hong Kong in recent weeks. Qantas will resume Sydney-Hong Kong flights on 30 January 2023.

Hopefully this trend of more flights and greater award availability will continue throughout 2023 as travel returns to normal!

Matt Graham

The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 70 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can connect with Matt by posting on the Australian Frequent Flyer community forum and tagging @AFF Editor.