'Price fixing' targeting direct flights to China sparks outrage among travelers
US airlines could be suppressing competition as they urge the federal government to stop approving more direct flights between the United States and China, citing their inability to compete with Chinese airlines, observers say.
In a letter addressed to US Secretary of State Antony Blinken and Transportation Secretary Pete Buttigieg on April 11, major US airlines expressed concerns about the competitive advantage enjoyed by Chinese airlines, which can continue to fly a shorter route through Russian airspace, while US carriers are restricted since the start of the Russia-Ukraine conflict in February 2022.
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The letter, signed by Airlines for America, Air Line Pilots Association, Allied Pilots Association and the Association of Flight Attendants, also called for limiting US-China flights "until US workers and businesses are guaranteed equality of access in the marketplace, free from the existing harmful anti-competitive policies of the Chinese government".
"This sounds like price fixing by not allowing competition," Matthew Schwartz, a computer engineer in Houston who recently flew to South Korea, said.
"The US airlines only care about protecting their profits, not the interest of air travelers. Any time competition is limited, consumers suffer."
The US carriers' inability to fly a shorter route is not China's fault, he said.
"The US imposed sanctions on Russia by barring Russian carriers flying over US airspace in 2022.Russia did reciprocally," he said. "It's a self-made problem by US policy. We shouldn't be penalizing China for that."
The alleged advantage of flying over Russian airspace is not entirely valid. FlightAware records showed that Chinese flights recently approved by the US are not flying over Russia, and only 12 Chinese flights to the US that never stopped operating during the pandemic are still using Russian airspace.
In February, the US Transportation Department increased weekly round-trip flights between China and the US to 50 starting from March 31, up from the previous 35.
However, US carriers are not using all those flights. According to a report published by FlightGlobal last month, American Airlines, Delta Air Lines and United Airlines requested and received a 90-day waiver to delay resuming weekly flights to China.
The reluctance stems from concerns that the government might further increase the flights to 100 per week, even though they cannot operate all the existing 50 flights. This hesitation is because of the lack of passenger demand, which has not recovered to pre-pandemic levels, American Airlines said.
Contrasting narratives
But this situation contrasts with the Transportation Department's rationale for increasing the flights, which was based on market assessments and public interest considerations.
There are other reasons why US carriers want to limit the number of flights, industry insiders said. For example, they have prioritized direct flights to European destinations, which are shorter and more profitable, leading to fewer wide-body planes to operate extra flights.
In addition, the US lacks about 8,000 pilots, according to a study conducted by consulting firm Oliver Wyman last year. This was because of early retirements during the pandemic, a shrinking pool of potential pilots from the military, and the mandatory retirement age of 65 for pilots that is already older than the general workforce. The gap between pilot supply and demand in 2032 is expected to reach about 13,300.
Many travelers disputed the US carriers' claims, accusing the airlines of caring only about profits and making consumers pay more.
"These excuses the airlines are using to prevent more flights only have one outcome: higher ticket prices for the consumer," a reader called Joshia wrote in a comment on Yahoo. "The only result of fewer flights is higher ticket prices."
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Another reader on Yahoo, William, said he regularly flew United Airlines to Shanghai in business class for $6,500 before the pandemic.
"Last month, I checked prices and it was $54,000 for a fully refundable ticket, $12,400 for nonrefundable. Of course they don't want to approve more flights; they're able to hammer us on prices right now," he wrote.
The suppressed competition imposed on Chinese airlines by the US also drives up airfares between the US and other major Asian cities, other travelers said.
"I fly to Asia every six weeks, what used to cost business class pre-COVID is now almost double, $3,600 vs $6,500 is what I paid two weeks ago," a reader called Shawn wrote. "It's definitely punishing my business travel."
Many readers said the US airlines' request was precisely an example of anti-competition.
"This is yet another sign that the American airline industry cannot compete with Chinese airlines in price and quality of service," reader Imurdad said of the airlines' request. "This is yet another form of protectionism."
