The United States on Friday reversed course on a potential Chinese airline ban after Beijing said it would begin to ease COVID-19 restrictions that have prevented foreign carriers from restoring service to China.

U.S. airlines have reduced their schedules due to the pandemic, including cutting flights to China, but as the worst of the pandemic appears to fade, they are taking small steps to rebuild their international networks. Both Delta Air Lines (NYSE:DAL) and United Airlines Holdings (NASDAQ:UAL) have announced plans to resume limited service to China, pending government approval.

A United Airlines plane exiting a hanger

Image source: United Airlines.

China, however, has been dragging its feet on allowing foreign airlines to resume service. As a response, the Department of Transportation earlier this week moved to block Chinese airlines from flying into the U.S.

China then said it would allow a limited number of foreign flights. The DOT then said it will still place restrictions on Chinese carriers, limiting the weekly round trips the airlines can fly as long as Chinese restrictions remain in place. The U.S. is "fully prepared to once again revisit the action" should Chinese policy change, the department said. 

Airlines are rebuilding their schedules, but for now are focused primarily on domestic travel. Issues with China for now are likely to have only a small impact on overall revenue. But prior to the pandemic, Asia was viewed as a key region for growth and the airlines will be watching carefully to see how the U.S. relationship with China evolves in the months to come.

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