China was once held as the shining example of a post-pandemic domestic recovery. However, despite 2021 bringing vaccines and the easing of restrictions, China's recovery has faltered in recent months. Here's a look at the country's falling traffic and the reasons behind it.
Ups and downs
Chinese aviation has taken an interesting path since the pandemic first emerged. In the week ending December 24th, the domestic capacity was down 31% compared to 2019 levels. However, it was down 41% compared to December 2020. Unlike nearly every other major market, the industry did far better in 2020 than this year.
Traffic in China peaked in the last week of April 2021, with just under 13,000 daily flights scheduled. This led many to hope that traffic would easily surpass pre-pandemic heights and remain that way. However, things didn't work out that way, and capacity fell in June. After a slight increase, the market took a huge hit in August, with capacity down 45% compared to 2019.
Since August, flights have risen with eased restrictions and started making a recovery. However, just as capacity rose, travel bans led to another crash in November. This contrasts with a 2020 where traffic remained consistently above 2019 levels for the entire last quarter and a strong recovery.
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What's happening?
The reason behind the choppy recovery is Beijing's 'zero COVID' policy. Since February 2020, China's border has been firmly shut to nearly all travelers, allowing it to quarantine all arrivals. This meant little to no local cases through the year, allowing domestic flights to surge back by mid-year.
However, zero COVID has become more challenging to maintain as new variants arise. The Delta variant saw several provinces go into lockdown for longer periods, increasing the speed bumps for airlines to bounce back from. Despite its vaccine rollout, China has doubled down on the policy, causing airlines to swing back into the red for a while.
This means airlines in Europe and the US have sped past China over the summer. With vaccines enabling virtually all restrictions to be dropped, traffic surpassed pre-pandemic levels and remains high even today. While Omicron has caused capacity to fall in recent days, airlines are expecting this to be temporary.
What's next?
2022 is not shaping up to be very different for the Chinese aviation industry. The zero COVID policy and foreign border closure will remain in place until the end of the winter Olympics in February. Meanwhile, Omicron threatens to cause even more shutdowns due to its transmissibility, resulting in more lost traffic.
The only path out would see China ease COVID restrictions, allowing flights to resume normally again. However, there is no timeline for this, and spectators aren't holding their breath. For now, the best case for 2022 will see China control COVID spread again and allow the domestic market to return to its early summer days.
What do you think about China's domestic recovery? Will things change in 2022? Let us know in the comments!