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Economy

Air China scraps Beijing-Hawaii flights on tepid demand

Weak yuan likely to further dampen interest in the resort destination

NEW YORK -- Air China will soon end direct flights between Beijing and Hawaii, the carrier announced Tuesday, as Chinese tourism to the U.S. state falters amid bilateral trade tensions.

Starting Aug. 27, Air China will no longer offer service between Beijing and Honolulu, the airline said, citing "network layout, capacity arrangement and other reasons."

The flights, which are offered three times a week and first introduced in 2014, had a 66% occupancy rate in both 2018 and 2017, U.S. Department of Transportation data shows. Air China's overall passenger load factor on international flights was 78% last year, according to its annual report.

Air China is the only carrier still offering direct flights between the two cities, after Hawaiian Airlines suspended the route last October due to low demand.

According to a report released last year by the Hawaiian government, 151,299 Chinese visitors traveled to the state in 2017, a 7.9% drop from the year before. Though the Chinese spend the most while vacationing there, they were outnumbered by 261,039 Korean travelers and nearly 2 million visits from Japan.

Air China's announcement also came as the Sino-American trade war ratcheted up over the past week.

U.S. President Donald Trump on Thursday said a new round of 10% tariffs will be imposed on $300 billion of Chinese goods not previously taxed. On Monday, Beijing let its currency sink below 7 to the dollar. Washington responded by designating China a currency manipulator.

Apart from fueling trade tensions, a weak yuan will also likely curb Chinese tourism to the U.S., as spending in dollars becomes more expensive.

Chinese travelers' declining interest in the Pacific destination echoes a broader decline in the country's tourism to the U.S. According to National Travel and Tourism Office data, the number of Chinese visitors to America fell to roughly 3 million in 2018 from 3.2 million the year before, the first dip in over a decade.

Beijing this year repeatedly warned its citizens against visiting the U.S., citing harassment by immigration officials and frequent shootings.

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