Chinese domestic recovery below 80% every month since July 2021

Here at Air Service One our focus is on the European and North American air travel markets. However, we also look at how these regions connect to the rest of the world. Back in August we examined the recovery rate of the different travel markets between Europe and Asia. This showed that in August the Europe-China market, which had been the single biggest Europe-Asia market back in 2019, was still 96% down in scheduled seat capacity. For comparison, Europe-India was only 2% down.

Official Chinese government traffic statistics showed that in 2020, the first year of COVID, domestic air travel demand recovered to well over 90% of pre-pandemic levels during the last four months of the year. The domestic demand recovery fell in early 2021, which coincided with the Chinese New Year celebrations. However, in March, April and May domestic air travel was back at pre-pandemic levels, if not slightly above them. June and July were around 90% of 2019 levels.

In August the recovery rate fell to just over 40%, before recovering to the mid-70s in September and October. In November it was back down to 45%, and just under 60% in December.

2022 has not been a good year for Chinese aviation

Unlike pretty much the rest of the world, China is still maintaining a strict lockdown policy at the first sign of any COVID outbreaks. This has resulted in unpredictable reductions in demand that must play havoc with airline schedule planners and operations staff at China’s airlines.

Data for 2022 shows that no month has been at above 65% recovery rate, with passenger demand in April being down 83% versus April 2019. As a cross-reference, traffic data in April 2022 for Xi’an Airport (as reported by Fraport) was 86% down versus April 2021. Coincidentally, that was the last month Fraport reported figures for Xi’an Airport as it sold its share in the airport to local investors during the second quarter of 2022.

Analysis of Cirium schedule data for the Chinese domestic market shows that airlines appear to be planning for a domestic recovery. However, there appears to be a disconnect between published capacity data and demand. In July, Chinese domestic seats were up 5% versus 2019 (while demand was down 36%) and in August scheduled domestic seats were up 4% versus 2019 (while demand was down 41%). This suggests that either load factors have fallen dramatically, or that there have been many cancellations that have not been recorded in the schedule data provided to Cirium by the airlines.

Looking ahead, schedule data for September shows Chinese domestic capacity currently down 4% versus September 2019, with October capacity up a massive 20% versus 2019. Air Service One will continue to track the actual level of domestic air travel demand in China in the coming months with considerable interest. Meanwhile, there appears to be little sign of international demand picking up significantly any time soon.