Qantas abandons Shanghai route as China visitor market struggles to recover

Qantas abandons Shanghai route as China visitor market struggles to recover

Photo credit: Edward He via Unsplash

In a sign that the Chinese visitor market to Australia continues to lag, Qantas Airways (ASX: QAN) is suspending its service between Sydney and Shanghai from the end of July amid weak demand that has seen the service operate at half its capacity.

The move comes just seven months after Qantas resumed flights into Shanghai in October last year after abandoning the route during the pandemic.

The airline says demand for the formerly busy route into China “has not recovered as anticipated”, with the service to be suspended from 28 July.

Qantas plans to redeploy aircraft from the Shanghai route to other Asian destinations where the airline is experiencing higher demand or where it sees new tourism opportunities.

“We’re always looking to ensure that we have the right aircraft, on the right routes and at the right time of year to best meet the needs of our customers,” says Qantas International CEO Cam Wallace.

“Since COVID, the demand for travel between Australia and China has not recovered as strongly as expected. In some months, our flights to and from Shanghai have been operating around half full.

“That’s why we’ve decided to suspend this route and boost flying to other popular destinations.”

The Shanghai route suspension will see Hong Kong remain as the key gateway into China for Qantas as passengers will need to utilise partner airlines to reach other mainland destinations.

Qantas says passengers booked to travel on Shanghai flights from 28 July are being contacted and offered a full refund.

The suspension of the Shanghai service has been announced alongside an expansion into other parts of Asia announced by Qantas today, including a new route from Brisbane to Manila which will be the first service between the destinations by Qantas in 10 years.

Qantas is also bolstering capacity to Singapore and India with more flights added to its existing schedule.

The Brisbane-to-Manila service will operate four days per week, serviced by an Airbus A330 aircraft, from 28 October 2024.

The flights build on an existing daily service by Qantas from Sydney, adding more than 100,000 seats between Australia and the Philippines each year.

“We know large numbers of our customers have been travelling between Manila and Brisbane via our existing Sydney service, which gives us great confidence about how this route will perform when flights start," says Wallace.

Brisbane Airport anticipates the service will bring almost 170,000 additional inbound seats to Queensland over the next three years worth $81.5 million in overnight visitor expenditure.

“The Philippines is currently Brisbane’s 12th-biggest inbound tourism market," says Gert-Jan de Graaff, the CEO of Brisbane Airport. "Qantas will cement it as a top 10 player for Queensland.”

Qantas is also bolstering its flight capacity into Singapore between from both Brisbane Sydney by about 10 per cent with more than 2,500 additional seats a week added to the airline’s existing services.

From 11 December this year, Qantas will lift its Sydney-to-Singapore service from 14 to 17 return flights a week, while it plans to boost its Brisbane-to-Singapore service from seven to nine return flights per week from 27 October 2024.

The move is timed to improve connectivity with Qantas’ daily service from Singapore to London, which the airline says will reduce overall travel time to Heathrow by about four hours.

Meanwhile, flights from Sydney to Bengaluru in India will increase from five per week to daily to cater for strong demand over the peak holiday season between mid-December 2024 and late March 2025.

The additional services will add more than 12,000 seats between the two cities over the four-month period.

Wallace says the new routes and additional flights will “create more choice for our corporate and leisure customers and make it even easier for them to access the places they need to travel to in Asia”.

“We’ll continue to maintain a presence in China through our partners and our existing flights to Hong Kong and look to return to Shanghai in the future,” he says.

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