In China, global airlines are having to chop or cancel flights on account of weak demand

Major global airlines are reducing services and in some cases pulling out of China entirely as longer routes to Asia have led to higher operating costs following the closure of Russian airspace while demand has been weak.

Virgin Atlantic and Scandinavian Airlines, for instance, are withdrawing completely from China, in response to the businesses' web sites. Virgin Atlantic suspended all flights to Hong Kong – and closed an office there – in 2022, ending the airline's 30-year presence within the Asian financial hub.

A Report from travel news site Skift shows that seven major airlines have pulled in a foreign country within the last 4 months.

John Grant, chief analyst on the OAG aviation intelligence agency, said the situation “will get worse before it gets better.”

According to Grant, British Airlines has continued to scale back the scale of jets flying to China. Routes where Boeing 747 jumbo jets flew were replaced by B777s and eventually even smaller B787s, he said. This is one other option to reduce capability but “maintain the point on an airline’s route map,” Skift said.

After Russia invaded Ukraine, the EU and the United Kingdom, along with other Western countries, imposed a general ban on Russian aircraft flying. Russia responded by closing its airspace, forcing many European airlines to fly longer routes to Asia.

Longer flights require more fuel, making flights dearer. However, Chinese airlines aren’t subject to Russian airspace bans, allowing them to fly the identical routes to Europe faster and cheaper than their European counterparts.

In addition, “due to longer working hours, airlines had to operate with a four-person flight crew, when in some cases a two- or three-person crew could have been used,” Grant said. “If the flight crew is short and working hours are limited, that is a cost factor.”

Grant said European airlines had found higher uses for planes sent to China.

For example, when British Airlines canceled its Beijing route, it reallocated planes to Cape Town, he said. “Load factors” – how full the plane is – rose from 55% on the Beijing path to 90% on flights to Cape Town, he said.

As major airlines pull out of China, Some are expanding their capability to other parts of AsiaPresenting the Russian airspace problem alone isn’t a deal-breaker.

Demand in and from China is one other big problem, Grant said. The country's economic woes are hampering foreign travel, while weak international interest in visiting China is dampening the variety of arrivals.

In 2019, before the pandemic, China welcomed around 49.1 million travelers around 17.25 million foreigners had arrived According to the Chinese government, it’s going to be available in China from July this 12 months.

Qantas cited “low demand” when it announced in May it might suspend services from Sydney to Shanghai. Australia's national airline continues to fly to Hong Kong from Sydney, Melbourne, Brisbane and Perth.

U.S. airlines aren’t as affected by the Russian airspace issue, but they too are in decline, Grant said.

“In fact, U.S. airlines are making difficult but very commercial decisions to cut Chinese services and deploy the planes elsewhere,” he said. “Honestly, it’s a given and a reflection of the market.”

“US airlines have no real interest in doing more than they are currently doing,” he said. “It's almost as if they're holding on to the frequencies they have to make sure that when China returns they have a presence in the market and are not blocked by the Chinese saying there are no slots available – that “They've done it before.”

CNBC reached out to Chinese aviation officials for comment but did not receive a response.

Low demand has also hit domestic airlines in China.

Grant said Chinese airlines will recover, but only in the longer term. “But when their largest airline lost $4.8 billion in 2022 and 'only' $420 million last year when all major international legacy airlines were profitable, they still have a long way to go.”

This winter, China-based airlines will operate 82% of all flights between China and Europe, up from 56% before the pandemic, he said. Overall, Chinese airlines have increased their capacity to Europe compared to before the pandemic, even though the market and trade flows were much stronger then, Grant said.

“Chinese airlines are desperate for cash and a return to normality,” he said.

And more flights are on the best way, Grant said.

“This coming winter there will be around 18 new routes between China and Europe… all from Chinese airlines,” Grant said. “It’s crazy – there’s no real demand.”