State-affiliated The Economic Daily reported that Spring Airlines, China Eastern Airlines and China Southern Airlines have cancelled some Southeast Asia-bound flights scheduled during the Labour Day holiday in May.
Malaysia’s AirAsia has suspended two routes between Bangkok and Shanghai as well as Xi’an.
A travel notice on its website stated that flights between Bangkok’s Don Mueang International Airport and Shanghai’s Pudong International Airport will be suspended from Apr 17 while flights to Xi’an Xianyang International Airport will be halted from May 11.
Some flights to Singapore have also been impacted. Juneyao Air, which operates both domestic and international flights from Shanghai, has cancelled flights between Changi Airport and Shanghai Pudong International Airport from Apr 28 to May 5.
Other cancelled routes include Sichuan Airlines flights between Singapore and Chengdu Tianfu International Airport from Apr 28 to May 5, according to Flight Master, a Chinese flight tracking and aviation data services platform.
Singapore Airlines flights between mainland Chinese cities and Southeast Asian destinations have not been impacted so far.
“Unfortunately, the airline business is very complex and influenced by many external factors like kerosene supply and operational costs being very decisive ones,” said Oliver Sedlinger, an expert on the Chinese outbound travel market.
LOW-COST CARRIERS MOST IMPACTED
Low-cost carriers are among the hardest hit as they typically do not hedge fuel costs due to their lean business models and quick turnaround times, noted Gary Bowerman, a tourism policy and consumer trends analyst.
Bigger airlines “buy futures contracts to protect against short-term spikes in fuel prices”, Bowerman said, referring to the practice of locking in jet fuel purchases at fixed prices for later.
However, that comes with risks, he said. “In some cases, over a 12-month period, fuel costs may not go up and (they may have) actually spent quite a lot of money on those contracts.”
Low-cost carriers, meanwhile, cannot take that risk, he added.
“When costs of crude oil and jet fuel go up, it hits low-cost carriers much harder because they’re not sheltered against it,” Bowerman said. “They have no protection.”
He pointed to Indonesian low-cost carrier Batik Air, where jet fuel typically accounts for about 30 per cent of its operating costs under normal conditions, but this has risen to almost 50 per cent amid the current crisis.
“With (such) narrow margins, they can’t operate all their flights because they’re going to lose money,” Bowerman said.
Hong Kong’s flagship carrier Cathay Pacific announced on Apr 11 that it would cancel a number of flights between May 16 and Jun 30 to “mitigate part of the increased (fuel) costs” – with mostly regional flights and a small number of Australia, South Asia and South Africa flights affected.
HK Express, its low-cost arm, will also cancel a number of its flights between May 11 and Jun 30, it said – affecting about 6 per cent of “total frequencies”.
https://www.channelnewsasia.com/east-asia/china-travellers-southeast-asia-flight-cancellations-fuel-crisis-middle-east-conflict-6063171
