Airline plans Shanghai-London service, suspending Munich and Madrid links China Eastern Airlines has decided to suspend its money-losing routes to Munich and Madrid and put the planes and crews on a new route from Shanghai to London, to challenge Virgin Atlantic Airways, industry sources said. Since May 1999, Virgin Atlantic has been the sole operator on the London-Shanghai route which it pioneered and turned into a lucrative franchise. After losing money, the route became profitable this June, with four flights a week. Virgin wants to increase the frequency next year. The sources said that China Eastern would start flying from Shanghai to London on April 1, with three flights a week, using A340-300 aircraft with 289 seats, against the A340-600 of Virgin, which carries 311. China Eastern has decided to suspend its routes from Shanghai to Madrid and Munich, which are among its top 10 money-losing foreign routes, with occupancy of less than 20 per cent on some days. It will use the planes and crews on the new route to London and also on its existing service to Paris, which is profitable. China Eastern officials declined to comment. Chinese carriers make most of their profits from domestic operations, where there is no foreign competition. Many lose on foreign routes, where they cannot compete with the better service, higher brand recognition and prestige of foreign carriers. A decade ago, many Chinese travelled on a budget given to them by state companies which ordered them to fly on national carriers. Now, most people can freely choose their own airlines. What has made the Shanghai route profitable for Virgin is the surge in Chinese passengers, who now account for 60 per cent of passengers when they were a minority in 1999. Many are students and their family members. Shanghai airport is one of the main points of exit for Chinese going to study abroad, handling 80,000 students a year, 25 per cent of the national total. More Chinese go to study in Britain than any other country.