Etihad launches into race for Chinese airspace

• Expanding from 7 to 28 weekly flights
• Expansion will come with challenges
• But ‘no imminent risk’ of overcapacity

Etihad Airways is increasing its flights to mainland China in one of its biggest network expansions in years as Gulf carriers jostle for position on a fast-recovering long-haul corridor.

The airline is adding 28 flights per week to five new destinations. This takes its China operation to 35 weekly services across six cities (Beijing, Shanghai, Guangzhou, Chengdu, Hangzhou and Shenzhen), heightening competition with regional heavyweights Emirates and Qatar Airways.

The expansion targets one of the fastest-recovering post-pandemic corridors, but industry experts cautioned that the expansion comes with risks.

Analysts told AGBI that rising volumes and a rebound in passenger numbers mask a more complex picture of weaker premium demand and intensifying competition across the China-Gulf market.

“The China-Gulf corridor has seen a meaningful recovery, but the key question is whether premium demand has kept pace,” said Linus Bauer, founder of BAA & Partners. 

He said Chinese outbound business travel remains structurally below 2019 levels, while leisure traffic has recovered more strongly but at lower yields.

“The risk isn’t demand. It’s yield dilution,” Bauer said.

Etihad’s expansion enters the airline into a highly competitive landscape dominated by Emirates and Qatar Airways, both of which already operate extensive China networks from their Middle East hubs. 

In February, Dubai’s Emirates strengthened its China strategy by signing an interline agreement with Hangzhou-based Loong Air, adding access to 22 mainland cities via Hangzhou, Shenzhen and Hong Kong.

John Grant, a partner at UK-based Midas Aviation and AGBI columnist, said Etihad remains a relatively small regional player in the market even after its expansion, with under a 7 percent share of Middle East-China flights. This compares with Emirates at 39 percent and Qatar Airways at 29 percent. 

And while Gulf carriers vie for supremacy in the skies, Chinese carriers are also rebuilding capacity after pandemic-era disruptions, further intensifying competition.

Grant said the expansion is less about immediate market demand and more about fleet deployment and geopolitics. 

“Etihad has new aircraft arriving that have to fly somewhere,” he said, adding that the move is “an aero-political development” as much as a commercial one.

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The airline will use a two-class Boeing 787-9 – with 262 economy and 28 business seats – for the additional flights to China.

Saj Ahmad, chief analyst at StrategicAero Research, said this choice of aircraft suggests limited premium demand in the market today, though that could evolve as frequency and trade flows deepen.

“China is a massive market, so there’s no imminent risk of overcapacity just yet,” he said. However, he warned that competition could pressure pricing and delay profitability timelines.

“Etihad stepping in here will lead to more competition and by extension, could force lower fares as a result,” Ahmad added.

The UAE is home to aabout 6,000 Chinese companies, with bilateral trade between the two countries projected to reach $200 billion by 2030. 

On Sunday, Abu Dhabi’s crown prince Sheikh Khaled bin Mohamed bin Zayed Al Nahyan arrived in Beijing on an official visit to further strengthen ties and advance cooperation across key priority sectors.

Etihad Airways has operated a partnership with China Eastern Airways since 2012, with the relationship cemented into a joint venture in 2024.