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Qantas to drop Sydney-Beijing route due to competition from Chinese carriers

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By Reuters
Qantas to drop Sydney-Beijing route due to competition from Chinese carriers
FILE PHOTO: A passenger walks with their luggage towards a Qantas Airways plane at Sydney International Airport in Australia, October 25, 2017. REUTERS/Steven Saphore   -   Copyright  STEVEN SAPHORE(Reuters)

SYDNEY (Reuters) – Qantas Airways Ltd <QAN.AX> said on Tuesday it is axing its underperforming Sydney-Beijing route from March due to stiff competition from Chinese airlines and weak business class demand.

The Australian carrier had relaunched the route in 2017 in its third attempt in 35 years to make it viable and had already lowered the number of weekly flights to five from seven in 2018.

It will maintain daily flights from Sydney to Shanghai, where it partners with hub carrier China Eastern Airlines Corp Ltd <600115.SS>.

Qantas said since it had reintroduced the direct Sydney-Beijing services in 2017, capacity from Beijing to Australia on Chinese airlines had grown by around 20% and was expected to grow even further in 2020 at a time when broader international capacity to Australia was declining.

“Our flights to Beijing have been underperforming for some time due to weaker demand as well as a big increase in capacity from other airlines,” Qantas International Chief Executive Tino La Spina said in a statement.

“China is a significant market for Qantas and our direct services from and to Shanghai are performing well. With Beijing, we’re responding to what the market is telling us,” La Spina said.

Qantas said it would redeploy the Airbus SE <AIR.PA> A330 capacity it had been using on the route to elsewhere in Asia.

(Reporting by Jamie Freed; Editing by Muralikumar Anantharaman)