When the three largest U.S. airlines changed the way they referred to Taiwan in 2018, it brought home the extent of China’s sensitivity to international relations with the island. Despite the fact that, earlier in the year, the White House had referred to China’s demands as “Orwellian nonsense,” the three airlines quickly complied for fear of losing access to a highly lucrative market. In fact, all 44 international airlines that received the instructions fell into line, reported China's government-controlled People's Daily.
So sensitive remain relations between the two, that any overt declaration of independence by the Republic of China (Taiwan) could seriously escalate the threat of war with the People’s Republic of China (PRC). With People’s Liberation Army Air Force monthly sorties into Taiwan’s air defense identification zone apparently peaking in October at 150, China will continue to bristle at U.S. arms sales to the island, understood to total $23 billion since 2010.
The history of the subject is charged. After the Republic of China government's relocation to the island in 1949 resulting from the Chinese civil war, relations went into deep freeze. In 1979, China proposed the "Three Links" rapprochement, involving post, transportation, and trade. However, Taiwan responded with the "Three Noes"—no contact, no negotiation, and no compromise with the mainland. As a result, the ROC would not accept China’s insistence on designating flights between the two locations as "domestic."
The hijacking in May 1986 of a China Airlines cargo plane by a pilot defecting to the mainland forced Taiwan to recognize that the lack of dialog was unworkable given the need for negotiations to release the crew.
On Jan. 26, 2003, a China Airlines Boeing 747 became the first legal Taiwanese flight, from Taipei to Shanghai via Hong Kong, to land in mainland China in 54 years. From 2003 to 2008, nuances surrounding mutual recognition meant that restrictions were lifted only gradually. Early in the process, movements were strictly limited to one-time access during the annual Chinese New Year celebrations.
When Chinese officials later conceded that flight status could change from "domestic" to "cross-Strait," a thaw in relations ensued. In November 2008, daily instead of weekend-only fights began and by 2009, they turned from charter to scheduled, increasing to 270 per week in August of that year. Chinese visitor numbers hit a seven-year peak in 2015, at 4.2 million. In 2019, Taiwan saw 2.7 million visitors from China, 2.2 million from Japan, 1.8 million from Hong Kong, and 1.2 million from South Korea.
Mayur Patel, OAG Aviation head of Asia, told AIN that Taiwan-China traffic would stabilize post-Covid. “At this point in time, China is shut,” he said. “In normal periods, China was open to Taiwan.
“It was just that you needed extra paperwork to get there. It was quite a busy route. A lot of the passengers did fly through Hong Kong because that was the traditional way of flying into China in the old days. Cross-Strait flights began over a decade ago. That was limited. A lot of the traffic was coming from both sides, and some people were connecting onto Cathay Pacific’s international services, but a lot of it was actually pushing traffic into China as well. That will remain, moving forward.”
The Sydney, Australia-based Center for Aviation predicts three-year highs in traffic levels in the second quarter of 2022. “There are six airports with scheduled air service in Taiwan but Taoyuan is by far the busiest,” David Bentley, airports analyst at CAPA, told AIN. Taoyuan International Airport Corporation reported passenger throughput of 48.7 million in 2019, 7.4 million in 2020, and only 818,000 in 2021. From 2009 to 2019, annual passenger growth at the airport averaged 6.9 percent.
Taiwan stretches 240 miles (385 kilometers) north to south. The Taipei-Kaohsiung High-Speed Railway, launched in 2007, dealt a blow to operations at Taiwan's second-busiest airport, Kaohsiung International. Official Kaohsiung Airport passenger volumes grew from 4 million in 2011 to 7.5 million in 2019, before dropping to under 1.9 million in 2020. “The domestic market is tiny, for obvious reasons, competing with trains and being just a small island,” Boeing marketing director David Schulte told AIN.
“Cross-Strait traffic has risen and fallen in the last decade,” he said. “The reasons are primarily political. As for recent trends, I think most of the traffic patterns in Taiwan are very heavily Covid-related: they continue to have very strict travel restrictions in and out of Taiwan. That is severely depressing the passenger market, but the cargo outlook looks fantastic.”
Schulte said Taiwan’s two main airlines, EVA Air and China Airlines, had strong years through 2021, primarily driven by cargo operations. China Airlines’ year-end 2021 results showed passenger revenue down about 95 percent from pre-pandemic levels, while total revenues rose 30 percent.
“Obviously, this is driven by the cargo market, and flying long-haul to North America,” he explained. “The yields, the cargo they were reporting were over 400 percent higher than normal levels. Both EVA and China Airlines are operating 777 freighter fleets very efficiently and effectively, particularly into North America and Europe. When China Airlines took its first 777 freighters, it was able to open up new cargo markets, flying fruits from Oceania up to Taiwan. It was pretty interesting.”
Today, nationals cannot travel to China on a Taiwanese passport, but need a "Taiwan Compatriot Permit." Even for going to a restaurant or bar, they would need to show the TCP as identification. “I really don’t see China going to war with Taiwan,” Patel concluded. “There’s a lot of media noise, but I think they’ve gone past this war. They want to make a peaceful transition or have a dialog.”