Air China to suspend Beijing-Hawaii flights as demand falls

Air China is suspending its Beijing-Hawaii route after reporting weak demand. (Reuters)
Updated 06 August 2019

Air China to suspend Beijing-Hawaii flights as demand falls

  • Hong Kong-listed shares of Air China fell 3.5 percent on Tuesday afternoon

BEIJING: Air China will suspend its flights on the Beijing-Hawaii route from Aug. 27 after a review of its network, China’s flagship carrier said, as travel demand remains weak amid the US-China trade war.

Passengers who have purchased tickets for travel after that date will receive a full refund, Air China said in a statement on its website.

The passenger load factor — an industry metric that measures how much of an airline’s passenger carrying capacity is used — for Air China’s thrice-weekly Beijing-Honolulu route averaged 66.37 percent last year, according to Chinese aviation data provider VariFlight. That was well below the average load factor of 76.69 percent for Air China’s international flights last year.

Hong Kong-listed shares of Air China fell 3.5 percent on Tuesday afternoon, while its Shanghai-listed shares shed 2.8 percent.

Hawaiian Airlines last year pulled out of the same non-stop service between Honolulu and Beijing, which it opened in 2014, citing slower-than-expected growth in demand.

Its CEO Peter Ingram said the route was suspended due to lack of growth and not because of trade tensions with China.

The Air China announcement comes at a sensitive time in US-China relations as the world’s two biggest economies are locked in a year-long trade war that has disrupted global supply chains and rattled financial markets.

Beijing in June issued a travel advisory warning Chinese tourists about the risks of traveling to the US, citing concerns about gun violence, robberies and thefts.

The number of Chinese tourists arriving in the US posted the first decline last year in 15 years, according to US data.


Oman’s sultan says government will work to reduce debt

Updated 23 February 2020

Oman’s sultan says government will work to reduce debt

DUBAI: Oman's Sultan Haitham bin Tariq al-Said said on Sunday the government would work to reduce public debt and restructure public institutions and companies to bolster the economy.
Haitham, in his second public speech since assuming power in January, said the government would create a national framework to tackle unemployment while addressing strained public finances.
"We will direct our financial resources in the best way that will guarantee reducing debt and increasing revenues," he said in the televised speech.
"We will also direct all government departments to adopt efficient governance that leads to a balanced, diversified and sustainable economy."
Rated junk by all three major credit rating agencies, Oman's debt to GDP ratio spiked to nearly 60% last year from around 15% in 2015, and could reach 70% by 2022, according to S&P Global Ratings.
The small oil producing country has relied heavily on debt to offset a widening deficit caused by lower crude prices. Also, the late Sultan Qaboos, who ruled Oman for nearly 50 years, held back on austerity measures.
The country has delayed introducing a 5% value added tax from 2019 to 2021, and economic diversification has been slow, with oil and gas accounting for over 70% of government revenues.
Last week, rating agency Fitch said Oman was budgeting for a higher deficit of 8.7% for 2020 despite its expectation of further asset-sale proceeds and some spending cuts.
"We are willing to take the necessary measures to restructure the state's administrative system and its legislation," Haitham said in his first speech since the mourning period for Qaboos ended, without elaborating.
He said there would be a full review of government companies to improve their business performance and competence.
Oman observers have said that if Haitham moves to decentralise power it would signal willingness to improve decision making. Like Qaboos, he holds the positions of finance minister and central bank chairman as well as premier, defence and foreign minister.