How does China’s unilateral visa-free policy affect its international aviation market? empirical evidence on passenger volume, flight frequency, and airfare

China introduced a unilateral visa-free policy in late 2023 as part of its broader effort to restore international mobility and support post-pandemic economic reopening. The policy grants ordinary passport holders from selected countries visa-free entry to China for short stays, thereby reducing travel frictions and potentially stimulating inbound tourism and business travel. Against this background, this study examines how China’s unilateral visa-free policy has shaped the recovery and structural evolution of its international aviation market. Using route-level data from January 2023 to March 2025, we apply a staggered difference-in-differences (DID) framework to identify policy-induced changes in passenger volume, flight frequency, and airfare. The empirical results show that the policy substantially increases international passenger volume and flight frequencies. Airfares rise in the short term following the policy change, but this increase fades over time. Heterogeneity analyses further uncover substantial variation across regional markets and routes departing from Chinese airports with different levels of slot constraints. Specifically, on European routes, capacity expansion is driven primarily by the deployment of larger aircraft, whereas on Asian routes it is achieved mainly through increased flight frequency. Moreover, estimated airfare effects are positive on routes serving more slot-constrained airports and negative on routes serving less constrained airports, consistent with differences in the flexibility of capacity adjustment. These findings offer nuanced insights into the joint responses of passenger traffic, airline capacity, and airfares to visa facilitation, providing actionable guidance for airline capacity optimization and strategic aviation policy design.