CHINA. Travel analytics company ForwardKeys has predicted that domestic air travel in China will reach full recovery by the start of September.
The market has been recovering steadily in the wake of the COVID-19 outbreak. In the second week of August, domestic arrivals at Chinese airports reached 86% of 2019 levels and bookings (issued air tickets) hit 98%, with most for travel in mid to late August.
ForwardKeys said its forecast of a full recovery is based on four factors. “First, the pandemic is now under control. Second, domestic aviation seat capacity is set to grow by +5.7% in the last week of August, when compared to the same period in last year – and when airlines make seats available, they tend to fill them by flexing fares. Third, many school and university students are travelling ahead of the start of term in September. Finally, aggressive price promotions have greatly stimulated demand.”
ForwardKeys VP Insights Olivier Ponti said: “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.”
The aviation market in China bottomed in the second week of February and has climbed gradually since then.
Hainan Island has been the stand-out performer, ForwardKeys noted, with +14.2% growth year-on-year in the second week of August. This has been supported by Hainan Province’s expanded duty free policy, introduced on 1 July, which has driven a sales boom since.
Chongqing, Chengdu, Shanghai and Shenzhen have also seen positive year-on-year growth, due to higher levels of economic activity. However, Chinese travel to Beijing is still -24.8% behind the same period in 2019, held back by the city’s second COVID-19 outbreak.
Ponti added: “The crunch question is whether heavy discounting will still be needed to maintain the recovery or whether the industry will return to profitability during the upcoming Golden Week holiday in October.”
*ForwardKeys will provide more data on the rise of duty-free shopping in Hainan and travel trends in domestic China, especially for Golden Week, during a free webinar on 17 September, at 11am CEST. To register, visit: https://forwardkeys.com/domestic-china-travel-webinar/.
