CAPA: close to full recovery in domestic China airline capacity by end-2020


China, now the world's largest domestic aviation market globally, is expected to recover to 90% of its prior capacity levels by the end of 2020, according to a new CAPA - Centre for Aviation projection.

According to CAPA's Air Capacity Model, China's domestic seat numbers are expected to reach close to 80% of 2019 levels in Jun-2020 as the country rebounds from the COVID-19 crisis, then to rise gradually through the summer months to approximately 92% of 2019 levels by the key National Day holidays in early Oct-2020, and then

By mid-Dec-2020 China's domestic capacity is projected to rise to 93% of prior-year levels

  • China's domestic aviation market is projected to recover to 90% of its pre-COVID capacity levels by the end of 2020.
  • Domestic seat numbers in China are expected to reach close to 80% of 2019 levels in June 2020 and gradually rise to approximately 92% by October 2020.
  • By mid-December 2020, China's domestic capacity is projected to rise to 93% of prior-year levels.
  • China's international aviation market is expected to have a gradual recovery, ending the year with only 18% of 2019 international seat capacity levels.
  • Some of China's major international markets, such as Australia and the US, are expected to remain closed for the foreseeable future.
  • Short-haul international travel to markets like South Korea and Japan will be one of the drivers of recovery, but spikes in COVID cases could potentially delay this.

CAPA's China Air Capacity Model projections: domestic and international, 2020

The projection is contained in CAPA's new China Air Capacity Model, which provides an effective breakdown of the nation's domestic and international outlook for seat capacity powered by OAG - as well as each city and route pair - based on the 2019 schedules. Combined with government statements, airline network announcements and capacity projections, it provides a robust and granular guide for future air capacity projection.

Using assumptions around six key phases - Zero/Grounded, Skeleton, Acutely Restricted, Basic, Restrained and Standard - users can track the pace of recovery in their relevant market.

CAPA Chairman Emeritus, Peter Harbison, said: "China's economy continues to recover as the easing of restrictions has allowed companies to return back to work. Business confidence continued its uptick in May-2020. The government has also been encouraging the return to work and production with measures such as subsidies for freighter services. Domestic travel has increased since recovering in late Feb/early Mar-2020, but this was driven by return to work and VFR travel as some restrictions on domestic travel remains in place."

"There is potential for further recovery in domestic capacity as restrictions continue to be lifted; for example, restrictions on group tours are expected to be lifted in 1-2 months, which could lead to improvements in consumer confidence and an increase in domestic leisure travel, particularly ahead of the summer holiday months", he added.

For China's international aviation market, based on current conditions, the CAPA Air Capacity Model is projecting only a gradual recovery in international capacity, ending the year with just 18% of 2019 international seat capacity levels - although this will be relatively high compared with many countries.

Mr Harbison continued, "Some of China's biggest international long haul markets will remain closed for the foreseeable future, such as Australia and the US, reflecting differing views on the basis for reciprocal relaxation of restrictions. In the short term at least, short haul international travel to markets such as South Korea and Japan will be one of the drivers of recovery, but this could potentially be delayed if there are spikes in COVID cases. The recent establishment of "green channels" with South Korea, Japan, Singapore, Italy, Germany, France, the UK and Switzerland is a step forward in regaining consumer confidence, and while the plan will only bring in lower frequencies and small traffic volumes, it has potential to expand in the medium/long term".

"The eight countries with which China is exploring 'green channels' have some of the highest number of Chinese expats, and more importantly their governments have some degree of control on the pandemic. VFR travel, as is the case in the domestic market, will also help drive the next markets to open up. These should include Thailand, Malaysia, US, Indonesia, Philippines, provided they manage to contain the spread or return of the coronavirus", Mr Harbison concluded.

About CAPA's 'Air Capacity Model'

CAPA's new 'Air Capacity Model' has been developed to provide the aviation and travel industry with a robust guide to future air capacity possibilities anchored in:

  • Baselines based on aircraft configuration data in the CAPA Fleet database and powered by OAG schedules;
  • Decisions and announcements by the Chinese government on travel restrictions and border announcements;
  • Assessments by CAPA, based on real time reports from CAPA's unique daily news system, which collects over 300 stories every day:
    • Airline statements, route plans and pricing;
    • The public's willingness and propensity to fly;
    • The introduction of standard criteria on sanitary conditions onboard aircraft and at airports;
    • 'Right-sizing' of aircraft to match demand.
  • The airline capacity projections are updated in real time, as major new events occur (made possible using CAPA's unique daily news gathering capability).

The CAPA 'Air Capacity Model' is available by 12-month subscription, providing a monthly excel file* with Input (assumptions) and Output tabs.

The Output tab offers a total market graphic, as well as airport and route data summary tables.

Live demonstrations of the new model are available on request by completing your details here or contacting membership@centreforaviation.com