Charting Trends: domestic demand remains strong, but data shows a stalling recovery


They say ‘a picture paints a thousand words’.

In this new regular report CAPA – Centre for Aviation provides an insight on latest industry trends, using data from its extensive databases.

Looking at latest capacity trends, fleet changes, interior innovations or latest airline and airport developments, the 'Charting Trends' report will offer a weekly observation on air travel.

This week we focus on the recovery of domestic travel.

Domestic air travel demand remains strong…

Latest traffic data from the International Air Transport Association (IATA) revealed that domestic air travel had experienced a robust growth of 30.4% in 2023.

Furthermore, total domestic traffic for 2023 surpassed 2019 levels by 3.9%.

Dec-2023 domestic traffic was up 27.0% over the same period a year earlier, and was at 2.3% above Dec-2019 traffic. 4Q2023 traffic was 4.4% higher than in the same quarter in 2019.

China’s full-year domestic traffic rose 138.8% versus 2022, and is now 7.1% above the 2019 level.

Australia (-4.2% compared to 2019) and Japan (-3.2% compared to 2019) are the only major domestic markets yet to recover pre-pandemic traffic demand, according to IATA.

In the recovery from the COVID-19 pandemic domestic air travel markets, understandably, rose much more quickly than their international counterparts. The latter’s performance has been heavily influenced by the travel restrictions and border closures that continued into 2023 in some parts of the world.

But sustainability drives mean that domestic air travel is now a focus for modal substitution.

The effects of climate change are being felt around the world, and the need for action is urgent. Domestic air travel – especially in European markets – has become an area of particular focus, and are an area where harmful greenhouse emissions can be reduced without a significant impact on journey time.

…but data shows a stalling recovery

According to data from CAPA – Centre for Aviation and OAG, average global domestic capacity hit its floor in the week commencing 04-May-2020, at less than a third (29.2%) of pre-pandemic performance.

It had already recovered to more than 70% of pre-pandemic levels by the beginning of 2021, reaching over 90% by the start of 2022.

But then it stalled.

All through 2022 it remained in the 90%-95% window, before finally jumping above pre-pandemic levels for two consecutive weeks at the start of May-2023.

Since then it has followed a similar pattern to the pattern in 2022 – entering 2023 just below full recovery, and this week (week commencing 29-Jan-2024) remaining at 96.6% of 2019 levels.

COVID-19 domestic air travel recovery, compared to 2019 (by weekly seats), 2020-2024

Unsurprisingly, there have been huge geographical influences on the recovery.

Asia Pacific has been a huge driver of the growing domestic connectivity, whereas Europe (of late) has been responsible for bringing down the global average.

This week (week commencing 29-Jan-2024) Asia Pacific is the standout region, with domestic capacity at 105.5% of pre-pandemic levels, with Latin America (103.9%) and North America (102.3%) both above 2019 levels, while Africa is just below (97.9%).

The Middle East, a domestic market dominated by Saudi Arabia, performed more strongly than the global average through the initial stages of the COVID pandemic, but since Jan-2022 it has been consistently below that level, and is at 89.4% for the current week.

Europe is the worst performing region at 80.9% of its 2019 levels for the current week, which was a slight recovery on the 79.5% recorded in the previous week, and the first time the recovery has fallen below the 80% figure since Mar-2022.

However, at the turn of the year the recovery had hit a five-month high of 95.7% – highlighting the danger of considering snapshot data.

USA and China dominate domestic air travel

USA and China are by far the largest global domestic air markets and together account for more than half (55.1%) of global domestic air capacity.

In the analysis week they each had more than 17 million seats on offer. That is a long way ahead of the third largest domestic market: India with just over 3.5 million seats.

Nine of the top ten country markets have more than one million domestic seats.

The strength of the USA and Chinese markets in global domestic travel has increased since before the pandemic, rising 4.4ppts from 50.7%, thanks mainly to a year-on-year growth of 18% in Chinese domestic capacity versus the same week in 2019.

Top 20 domestic air travel country markets, by seats (week commencing 29-Jan-2024)

Although the top seven domestic country markets remain unchanged versus the same week in 2019 (number 1 – USA; number 2 – China; number 3 – India; number 4 – Japan; number 5 – Brazil; number 6 – Indonesia; and number 7 – Australia), Mexico has switched position with Russian Federation, up from number 9 to number 8, and Spain has risen from number 13 to number 10, pushing Canada out of the top ten.

Outside the top ten there have been some notable moves up and down – the largest resulting in Colombia rising from number 20 to number 13, and Germany slipping from number 15 to number 28.

Asia Pacific is home to the biggest domestic air markets

The USA and China may have the most domestic air seats, but neither country is home to any of the ten biggest domestic routes.  

This list for the analysis week (week commencing 29-Jan-2024) is dominated by key travel corridors across Asia Pacific, with only two of the top ten coming from outside the region.

The biggest domestic air travel markets, by seats (week commencing 29-Jan-2024)

The busiest domestic airline route is in South Korea and it links Jeju (CJU) to the capital Seoul (GMP). This was also the busiest domestic route in the same week in both 2019 and 2022.

It remains a fair distance ahead of its closest rival: the one linking Hokkaido’s Chitose Airport (CTS) to Tokyo Haneda (HND) in Japan; that said, the gap has closed on last year, with capacity on CJU-GMP still down on the same week in 2023.

Hanoi (HAN) to Ho Chi Minh City (SGN) in Vietnam is the third busiest domestic route, while Fukuoka (FUK) to Tokyo Haneda (HND) is the fourth, and Australia’s Melbourne (MEL) to Sydney (SYD) is the fifth.

The Saudi Arabian route between Jeddah (JED) and Riyadh (RUH) is the busiest non-Asia Pacific domestic air corridor, and Colombia’s Bogotá (BOG) to Medellin (MDE) route sneaks into the top ten for this analysis week.

Domestic air travel could look different in the future

Domestic air transport will continue to face a number of challenges and opportunities.

The challenges primarily concern the future economic wellbeing and transport strategies of individual nations. Domestic air travel demand is closely aligned to economic growth, and will continue to face varied competition from surface modes and changes in its cost base linked to national government policy.

Environmental strategies will certainly place additional pressure on domestic flying, but will also promote innovation. Opportunities revolve around the development of new aircraft, engine and air traffic control technologies – potentially making domestic air transport operations cleaner and cheaper.

This week's report has been produced using data available to CAPA - Centre for Aviation members. The charts are taken from the CAPA - Centre for Aviation Regional COVID-19 Recovery Compared to 2019 and Rankings tools – available to all CAPA members and a resource where users can customise search parameters via a variety of metrics.

To find out more about the benefits of becoming a member visit: CAPA membership

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