Cost Differences Between Domestic and Foreign Airlines

Steven Wang:The cost differences involve several aspects.

First, under the same circumstances, domestic safety regulatory standards are very strict. Domestic airlines need more manpower and resources to ensure absolute operational safety.

Second, for cargo airlines, many Chinese cargo carriers primarily fly to major destinations and rarely operate global routes. For instance, domestic airlines typically fly from China to Europe and then return, making it challenging to achieve multi-stop or continuous flights from China to Europe, then to the US or other regions.

This contrasts sharply with global cargo airlines like DHL, UPS, Polar Air, and Atlas, which can operate global routes, addressing regional imbalances in cargo distribution due to trade imbalances. If cargo flights are only one-way or point-to-point, there will inevitably be a shortage of return cargo, leading to empty cabin losses.

In point-to-point one-way flights, airline costs are relatively high. If global routes can be achieved, such as loading e-commerce goods in Shenzhen, flying to Paris, unloading in Paris, then flying to Norway, and returning with seafood to Shenzhen, aircraft utilization can be increased, and costs can be reduced. Therefore, from this perspective, domestic airlines still lack sufficient operational capacity overseas.

Third, domestic airlines lack an international network and overseas cargo stations and hubs. For example, the partnership between SF Express and Etihad Airways to establish a dual-hub model in Ezhou and Abu Dhabi is a good example of cooperation. Major Middle Eastern airlines like Qatar Airways and Emirates have many wide-body aircraft due to their advantageous geographical locations, which meet transit needs.

Additionally, domestic airlines face challenges in air rights negotiations. The opening of air rights and regulatory optimization are crucial to reducing costs and increasing competitiveness. Air rights negotiations are a national-level activity, not something a single enterprise can decide. When an air rights negotiation is concluded, all airlines want to open new routes, leading to competition for resources and preventing the formation of a united effort.

By optimizing the international network layout, increasing industry openness, integrating resources, and improving infrastructure, domestic airlines can effectively reduce operating costs and enhance their competitiveness in the international market.

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Public account: Cross-border E-commerce Logistics Baixiaosheng