China’s rapid unwinding of Covid Zero restrictions has spurred a sharp recovery in the world’s biggest domestic air-travel market, throwing a lifeline to the nation’s ‘Big Three’ airlines, which have racked up billions of dollars of losses since the start of the pandemic.
Domestic flight activity jumped to around 65% of pre-pandemic levels Monday, from just 22% on Nov. 29, according to Chinese aviation data company VariFlight — the equivalent of several thousand flights per day returning to the sky. Ticket sales for the crucial Lunar New Year period in late January have also surged, China Aviation Daily reported Monday, citing online travel portal Qunar.com data.
Ticket prices for popular destinations such as Sanya on the resort island of Hainan, and Kunming from major cities including Beijing, Shanghai are expected to rebound to closer to usual levels for the Lunar New Year — which before Covid was the world’s biggest mass migration event as workers return to their home villages — China Aviation Daily said.
Lunar New Year bookings are expected to reach the highest level in three years, rising to 80% of pre-pandemic levels, Guo Lechun, an analyst with Qunar’s data research arm, was quoted as saying.
Ctrip.com said air travel searches jumped 900% on Dec. 7, the day the government announced the dismantling of most Covid restrictions, including mass testing and snap lockdowns. Within hours of a local announcement to lift traveler curbs on Dec. 5, searches for Sanya surged 166%, and a day later hotel bookings there jumped 95%.
Still, the travel lust could be short-lived as the rapid easing of Covid rules leads to a wider spread of the virus, prompting people to stay home for fear of getting infected. Anecdotal evidence suggests the caseload is many times the government’s tally of 7,298 for Dec. 12. In Beijing, long lines formed outside hospitals Monday, and people are struggling to find medicine.
Airlines themselves could also be hampered as workers fall sick. As the world largely emerged from the pandemic this year, carriers from British Airways Plc to Qantas Airways Ltd. were hit by shortages of pilots and baggage handlers, leading to flight delays and cancellations, lost luggage, and irate customers.
China’s ‘Big Three’ carriers — China Southern Airlines Co., China Eastern Airlines Corp., and Air China Ltd. — have racked up losses of 152 billion yuan ($21.8 billion) since the start of 2020. They will probably eek out a small profit in 2023 before generating record earnings in 2024, according to Parash Jain, head of transport research for Asia Pacific at HSBC Holdings Plc.
“If you look at around the world, air ticket prices are materially higher than in 2019,” Jain said in an interview with Bloomberg Television on Monday. “But when you look at China’s domestic air tickets, even into the third quarter of 2022, it’s about 15% lower than that of 2019.”
