Trump proposes barring Chinese airlines from flying over Russia on US routes

By David Shepardson and Lisa Barrington

WASHINGTON (Reuters) -The Trump administration on Thursday proposed banning Chinese airlines from flying over Russia on routes to and from the United States, saying the reduced flight time this practice enables puts American carriers at a disadvantage.

The proposal is another escalation of the trade war between the world's two largest economies and was announced after Beijing on Thursday tightened controls for rare earths exports crucial for some U.S. industries.

U.S. airlines have long criticized the decision to allow Chinese carriers to use Russian airspace on U.S. routes because it gives them the advantage of decreased flying time and burns less fuel, lowering costs.

Russia has barred U.S. airlines and many other foreign carriers from flying over its airspace in retaliation for Washington banning Russian flights over the U.S. in March 2022 after the country invaded Ukraine.

Chinese airlines were not banned and have been using this advantage to increase market share compared to non-Chinese carriers on international routes.

The U.S. Transportation Department said on Thursday in its proposed order the current situation was "unfair and has resulted in substantial adverse competitive effects on U.S. air carriers."

The current proposal to apply the overflight restriction to U.S.-issued foreign air carrier permits does not apply to cargo-only flights, it added.

The Transportation Department's decision could affect some U.S. flights operated by Air China, China Eastern, Xiamen Airlines and China Southern.

The order did not name Hong Kong-based airline Cathay Pacific, which overflies Russia on its New York to Hong Kong route, according to flight tracking website Flightradar24. Cathay did not immediately respond to a request for comment.

China's aviation regulator, the Chinese embassy in Washington and Airlines for America, a major trade group representing carriers American Airlines, Delta Air Lines and United Airlines that all fly to China, did not respond immediately to requests for comment.

Chinese mainland-listed shares in the country's three biggest airlines fell slightly on Friday. Air China was down 1.3%, China Southern fell 1.8% and China Eastern slipped 0.3% by the middle of the day. The state-owned carriers have struggled since the pandemic, posting five consecutive years of annual losses.

TRADE TENSIONS

The proposal to ban Chinese airlines from using Russian airspace on U.S. routes comes amid growing tensions between Beijing and Washington over a series of economic issues.

Boeing is in talks to sell as many as 500 jets to China, which would represent a major breakthrough for the company in the world's second-largest aviation market, where orders have stalled amid U.S.-China trade tensions.

U.S. President Donald Trump and his Chinese counterpart Xi Jinping are expected to hold a face-to-face meeting in South Korea at the end of October.

The Transportation Department is giving Chinese carriers two days to respond to its proposal and said a final order could be in effect as soon as November.

In May 2023, the U.S. approved additional flights by Chinese carriers after they agreed not to fly over Russia on new routes, Reuters reported.

Last year, the Transportation Department said Chinese passenger airlines could boost weekly round-trip U.S. flights to 50 but opted not to add more flights after pressure from U.S. unions and airlines.

More than 150 weekly round-trip passenger flights were allowed by each side before restrictions were imposed in early 2020 due to the COVID-19 pandemic.

Some U.S. carriers have told the Trump administration that direct East Coast flights to China are not economically feasible if they do not fly over Russia. In some cases, carriers must leave some seats open and reduce cargo because of the increased flight length.

(Reporting by David Shepardson in Washington and Lisa Barrington in Seoul; Additional reporting by Sophie Yu in Beijing and Donny Kwok in Hong Kong; Editing by Chris Sanders and Jamie Freed)