China Air Carriers Will Lead Recovery from COVID-19 Coronavirus
The effect all the travel restrictions, flight cancellations, and border closures on international passenger traffic at over 1,000 airports due to the COVID-19 coronavirus pandemic is having on the airline industry these past couple of months is astounding.
In the last week alone there have been nearly 80 new government stipulations and airline reactions to plummeting demand.
They include today’s state news agency announcement that the UAE will suspend all passenger flights, including transfers, for an initial 2-week period, starting in 48 hours.
Together all these measures create such severe impediments to international air travel that the realistic outlook for next month is a reduction of over 90% points on the level achieved in April 2019.
That will take global international air passenger travel to a level not seen since the mid-1980’s. This is now the air travel crisis low point.
Grim as the current reality is, China’s situation is different from the rest of the world in the sense that they are well ahead in controlling the virus.
Once the authorities feel able to ease travel restrictions it is highly likely that the Chinese will look first to the mainland for vacation opportunities.
Will China’s answer to Hawaii lead the way?
Often dubbed China’s answer to Hawaii, Hainan Island may be the best place to fuel an increase in domestic travel demand.
Today’s analysis by Air4casts examines domestic air traffic to Hainan’s two big airports, Haikou and Sanya.
Together Hainan Island’s two airports handled 43 million domestic passengers travelling to and from the mainland, the vast majority of whom were Chinese.
The airport and the offshore Duty Free sales opportunities for Travel Retail are both well known and substantial.
While domestic passenger growth in 2019 was muted it is highly likely that there will be a travel spike to the island when the Chinese authorities ease travel restrictions but for now it is too early to forecast exactly when that will be.
March weekly passenger numbers from Haikou airport are still depressed.
Top 10 Domestic Routes into Hainan Island
In 2019 the top 10 mainland airports that fed Haikou and Sanya were fairly evenly distributed with Guangzhou and Xi’an in second place behind Beijing Capital.
Together the top 10 feeder airports accounted for 43% of all arrivals by air to the island.
The key message now to all in travel retail is that although we have reached a global low spot today, there will be a recovery and that recovery is likely to be led by China, and by China domestically, before the resumption of international travel.