China airfares rebound in potential rehearsal for global recovery
03/26/2021|6:23:47 PM|Reuters

Widely watched airfares in China are recovering to pre-pandemic levels as domestic tourists lead a patchy air travel recovery, scattering crumbs of hope to a shattered global travel sector.

With international markets like Europe still in partial lockdown, the global tourism industry's attention is riveted on China's new travel patterns as it brings COVID-19 under control and lifts curbs on movement. The Chinese domestic market quietly overtook the once-dominant U.S. market in size during the pandemic, but multiple coronavirus outbreaks before last month's Lunar New Year halted the rebound and could lead to first-quarter losses.

Now, with temporary testing and quarantine restrictions once again lifted, average prices for an economy seat during the April 3-5 Qingming festival, or tomb-sweeping holiday, have rebounded to 96% of 2019 levels, according to data from Ctrip.

Economy-class airfares for trips over the Labour Day holiday in early May have risen 11% compared with 2019 levels, says Ctrip, run by online travel giant Group.

"It seems like demand has really caught up with capacity once again and airlines are deciding discounts are no longer needed to stimulate demand," said Luya You, transportation analyst at BOCOM International in Hong Kong.

"I think the pent-up demand that everyone has been expecting is finally showing up in full force," said You, adding she expects yields and revenues to reach normal by the second half.

Chinese carriers are scheduled to operate 20.7% more domestic flights from April to October compared with 2019, according to flight master, a Chinese aviation data provider.

China Eastern Airlines will overtake China Southern Airlines to operate the most domestic flights, while planned flights by Spring Airlines will surge by 62.25% from 2019 levels, the company said.

Parash Jain, head of Asia Pacific transport research at HSBC, expects 2021 to be another loss-making year for the three biggest Chinese airlines.

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