China has banned Emirates airline from expanding operations in the country for six months, even as the carrier looks East for growth.
Beijing fined the Dubai-based airline 29,000 yuan (Dh15,678) and barred it from expanding its routes in the country for six months following two incidents that regulators in China said violated its air safety norms.
Officials of the Civil Aviation Administration of China (CAAC) from the western province of Xinjiang and central and southern China met Emirates representatives to review the operations, the regulator said in a statement on its website on Wednesday.
During an Emirates flight on April 17, the crew misunderstood instructions and flew at a wrong altitude above Urumqi in Xinjiang, according to CAAC.
In another incident on May 18, the airline’s radio communications were cut off over the same region.
“Emirates fully complies with the CAAC’s requirements on all our flight operations to China,” said an Emirates spokeswoman.
“Regarding the specific incidents on 17 April 2017 and on 18 May 2017, Emirates will cooperate fully with the CAAC and complete all actions recommended by the authority.”
The ban on expanding in China comes at a time when Emirates has been looking for growth in China and the Far East as the laptop ban on flights to US has dented the demand for its 12 destinations in North America.
On June 6, it also stopped operating its seven daily flights to Qatar after some Arabian Gulf countries, including the UAE, imposed a travel ban on Qatar.
“China would be a natural source of continued growth for Emirates,” said John Strickland, an aviation analyst at the London-based JLS Consulting. “So any short-term restriction limits the airline’s options to reallocate capacity displaced from its recent US service reductions.”
But the timing of the ban during the summer season is unlikely to cause much damage to the Chinese market for Emirates, according to Saj Ahmad, the chief analyst at London-based StrategicAero Research.
“This time of the year Europe and other parts of Asia are traditionally strong revenue generators – so even with the tempering of some US routes, this is offset with other, more robust market segments,” he said. “Any new routes into China that Emirates has been planning weren’t yet due to go live anyway.”
Emirates currently flies to six destinations in China, including Beijing and Shanghai.
CAAC penalised Etihad Airways in May along with 11 other companies for “infractions in relation to the transport of dangerous goods by air” last year. The penalties ranged from a warning to a fine of 25,000 yuan for the 12 entities.
Emirates had planned to allocate more seats through its A380 service to Beijing and Shanghai from July 1. It was not immediately clear whether it would go ahead with the upgrade.
The airline was expected to upgrade its second daily flights on these routes to A380 aircraft from the current Boeing 777-300ER.
In its 2016-17 annual report, Emirates said the revenue from the East Asia and Australasia region increased marginally by 0.9 per cent to Dh22.6 billion compared to the previous financial year. The region contributed 27 per cent of the airline’s total revenues at Dh83.7bn, the largest after Europe, in the 2016-17 financial year.
China is among the UAE’s top trading partners, with bilateral trade between the two countries at US$45 billion last year.
The UAE has also emerged as a popular destination for Chinese tourists after they were granted visa on arrival services from November.
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