China’s domestic passenger airline market is showing signs of improvement as the country’s coronavirus restrictions are lifted, according to IATA.
“We are seeing some signs of a turning point in the Chinese domestic market,” says IATA chief economist Brian Pearce during a briefing today. “The March numbers are showing an improvement. We’re certainly getting those reports from the market.”
Airlines in China had been discounting seats by up to 25% year-on-year in February, but “that’s stabilising” in March, Pearce notes.
Indeed, IATA’s figures indicate that passenger yields on Chinese domestic flights booked in the first two weeks of March are up slightly year-on-year.
IATA also notes that load factors on domestic services have been around the 60% mark.
Cirium schedules data for February shows China’s carriers slashed domestic capacity by nearly 50% year-on-year, but that fall has moderated to around 30% in March.
Overall passenger yields among Chinese carriers – including international flights – are still down by more than 25% for tickets booked in the first two weeks of March.
The industry association also states that the initial impact of the coronavirus outbreak on airline traffic in China’s domestic market was more severe than that seen amid the SARS outbreak in 2002-03.
The SARS and coronavirus epidemics are both believed to have originated in China, meaning its markets were hit early on.
While the improving situation in China means “it’s not all bad news”, for the global airline industry, Pearce cautions that the country’s story is an exception to a bleak picture elsewhere.
“For the industry as a whole that is absolutely what is not happening,” he explains. “The spread of Covid-19 cases outside of the Asia-Pacific region is very dramatically hitting bookings, as well as the closure of borders that we are seeing.”
Pearce also cites the impact on some markets in Asia-Pacific of a “second wave” of coronavirus cases as people return home from other regions.