American Airlines, the largest US carrier by passengers, said it would drop a route between Chicago and Shanghai– canceling the second direct flight from the U.S. city to China in four months. It had previously canceled a flight to Beijing in May. It still however, operates daily flights to the capital from Los Angeles and Dallas-Fort Worth, Texas.

Vasu Raja, vice president of network and schedule planning added: “The two China routes … have been colossal loss makers for us,” stating that high fuel costs had also made the route unsustainable.

Hawaiian Airlines stated that it would suspend its thrice- weekly nonstop service between Honolulu and Beijing, which opened in 2014—from October. It cited slower-than-expected growth in demand as the reason.

Competition from Chinese airlines is expected to grow with the anticipated easing of China’s near-decade-old “one route, one airline” policy, which would allow more local airlines to fly long-haul international routes.

Mike Boyd, president of aviation forecaster Boyd Group stated: “US airlines are at a severe disadvantage.”

“The majority of demand is China-generated, and that gives Chinese carriers the advantage.” He added.

Chinese passengers arriving at U.S. airports are expected to nearly triple to 12.8 mn in 2024 from 4.3 mn this year, The profile is shifting from groups to independent travelers, according to Boyd Group.

Scott Kirby, president of United Airline stated that Shanghai and Beijing has rebounded for the airline after several years of weakness, despite revenue per available seat mile (RASM) being below levels of two or three years prior.

“We’ve had several years of weakness as there was an awful lot of capacity growth out of Beijing and Shanghai.” He stated.

Both American and Hawaiian airlines however stated that the demands placed by China’s civil aviation regulator on foreign airlines to amend the way they referred to Hong Kong, Macau and Taiwan on their websites, did not play any part in the route cancellations.

Hawaiian’s chief executive, Peter Ingram, stated: “That issue of how Taiwan was displayed on our website had absolutely zero impact on this decision. Our economic evaluation was well underway long before that issue arose.”

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“Ola has obtained licenses to operate in South Wales and Greater Manchester, and will launch in South Wales within the next month,” said the official company statement. This will make it the only ride-hailing app in the UK to offer both private hire vehicles and black cabs.

In the UK, Ola will compete with Uber—a company that has been operating there for almost six years, albeit with its own share of challenges. Uber’s license was earlier revoked because it failed to report crimes committed by its drivers and used illegal tracking technology.

“Ola plans to offer better incentives to drivers, almost double,” says Yugal Joshi, vice president at Everest Group consultancy. “It understands the regulatory framework and must have done its financial modelling. But the outcome is still uncertain.” he stated.

“In India, Ola has achieved critical mass,” says Jaspal Singh, co-founder of Valoriser Consultants. “But to raise the next round of funding, it has to show revenue or trip growth. That’s why it is looking at global markets.”

Ben Legg will be heading Ola’s recently announced UK operations. He will lead and develop the senior leadership team, drive strategy and operations — and establish a UK nationwide presence by 2018 end. Ben joins Ola from AdParlor, the New York-based global marketing technology company, where he was CEO for two years. Prior to this, he was Group CEO of Adknowledge, the digital advertising technology firm, between 2011 and 2016. He has also worked as Chief Operating Officer for Google Europe, as well as previously holding senior roles at Coca-Cola and McKinsey.

The real test for Ola now though, would be to crack the UK’s biggest taxi market – London, which has seen heavy resistance by various units of Taxi Drivers. According to reports, a group of unions of taxi drivers are planning legal action against Uber over the drop in their annual income since Uber’s entry.

Ola’s entry into the UK follows its successful launch in Australia in February 2018, where it now operates in seven major cities. Over 40,000 drivers across Australia have registered since its launch in February, completing millions of rides. The company recently announced it has obtained licenses to operate in Greater Manchester and South Wales, with the launch of operations in South Wales in the coming weeks.

Ola now conducts one billion rides each year globally, with more than a million drivers and 125 million customers in over 110 cities.

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