AviationAirlines with domestic markets expected to see capacity bounce back to pre Covid-19 levels through July

Potential domestic market recovery underway for Asia-Pacific airlines

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April 2020 saw the biggest drop in global air traffic. Credit: 06photo/Getty Images
April 2020 saw the biggest drop in global air traffic. Credit: 06photo/Getty Images

Signs of aviation recovery are emerging in Mainland China and the Asia-Pacific region, after global air traffic suffered its steepest drop in April 2020, according to travel and data analytics expert Cirium.

Hong Kong, which is most reliant upon on international traffic and inbound tourism, was the hardest hit among Asia Pacific markets, with April traffic down by over 73% compared with the same period in 2019. Taiwan (down 58.2%) follows Hong Kong, with Singapore (down 48.4%) and Thailand (down 46.4%) at third and fourth.

“The air travel market in Mainland China is estimated to be down by 58% compared to the first four months of last year,” said Joanna Lu, Ascend by Cirium’s head of consultancy for Asia.

Ascend by Cirium’s global schedule data indicates a potential recovery across most Asia-Pacific markets through July 2020.

“Mainland China’s domestic schedule suggests a recovery to marginally positive year-on-year growth by end July, all and other regions are showing recovery as travel restrictions begin to ease. Those with large domestic markets are expected to see capacity back to pre Covid-19 levels or even growth by July,” said Ms Lu.

Unlike previous economically-driven downturns, Cirium expects intra-region recovery post Covid to be driven by bilateral agreements, such as the “travel bubbles” that mainland China is planning to establish with South Korea and Singapore for essential business travel.

The recovery of airlines in Mainland China and the Asia-Pacific region is also critical to the near-term delivery aspirations of aircraft manufacturers (OEMs), according to Ascend by Cirium’s global head of consultancy, Rob Morris, who joined Ms Lu on the webinar.

“Almost one-third of deliveries expected through 2023 are scheduled for the region. More than 1,360 deliveries are scheduled for Asia-Pacific operators, representing 31% of the total, compared to Europe at 29%, and North America at 22%,” said Mr Morris.

The pace is picking up. The global parked aircraft fleet, which reached around 64% in mid-April 2020, is now below 50% as airlines return aircraft to service.

“Since March 1, 2020, almost 7,000 passenger jets have been returned to service by airlines globally, with more than 20% of them in Mainland China,” said Mr Morris.

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