RecoveryDemand for domestic flights in China is back to normal
The Covid-19 pandemic broke out in China and hit airlines there first. In the meantime, the domestic market in the Asian country has recovered. But the big test is yet to come.
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Disappointment is spreading in Europe. Long-haul traffic has been poor since the limited restart of air travel, but demand for short- and medium-haul flights was better than expected thanks to holiday business. As more and more European countries are once again reporting increasing rates of new Covid-19 infections and are therefore being placed on quarantine and travel restriction lists, the summer peak is already over. This is causing disillusionment among airlines.
The situation in China is completely different. The airlines of the People's Republic are already offering 86 percent of the previous year's capacity on the domestic market - a market with 611 million passengers per year. The value of issued tickets is even sitting at 98 percent, according to travel analysis company Forward Keys. It concludes that China's domestic market will reach full recovery in early September.
The big test is yet to come
«This is a highly significant moment because it is the first time, since the start of the Covid-19 outbreak, that a major segment of the aviation market anywhere in the world has returned to pre-pandemic levels», comments Forward Keys expert Olivier Ponti. But the recovery was not without setbacks in China either. When the second Covid-19 wave paralysed Beijing in June, demand plummeted massively for a month.
Chinese airlines responded as before, sometimes with aggressive pricing strategies. It is also helpful that schools and universities in China are restarting in September, as many students fly from home to their place of study. So the big test is yet to come. «The big question is whether heavy discounting will still be needed to maintain the recovery», Ponti says.
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