China’s airlines gain market share as international tourism rises

Global aviation thrives on forecasts, whether of weather, arrival times or passenger demand. But if you want to know what’s happening with demand, you need to see the hard evidence of actual bookings, and that’s where companies like Saber and Amadeus come in.

Last week, Saber released its analysis of travel purchasing and booking data in China following the easing of border controls last December. Saber found that whenever announcements were made that travel restrictions were being eased, there was a corresponding increase in travel inquiries and requests, particularly for outbound tourism.

High prices are not a problem for travelers

The analysis revealed that despite airfares peaking at double their pre-pandemic levels, there was strong demand among Chinese travelers, with demand outstripping supply. As of February 6, international flight capacity on routes to and from China, including Hong Kong and Macau, had recovered to only about 27% compared to the first quarter of 2019.

With capacity expected to remain limited until April, it is Chinese airlines that are stepping up to seize the opportunity. Chinese carriers provide more than 65% of total international route capacity to and from the country, compared to 60% in 2019.

In another sign of the poor shape of Southeast Asian aviation, airlines from that region have only 12% of international capacity for China, compared to 16% pre-pandemic. Saber also points out that major (non-Chinese) carriers have yet to add significant capacity to China. Saber senior vice president of Airline Global Sales, Darren Rickey, said:

“The speed at which Chinese tourism began to increase as soon as the announcements that restrictions were to be lifted shows how high travel demand is for both inbound and outbound.”

The most significant breakthrough came on 20 January when China announced that the ban on group travel would end on 6 February. Saber saw an immediate increase in bookings, especially between January 30 and February 5, which rose 60% from the average of the previous two weeks.

sichuan airlines

Photo: Sichuan Airlines

Perhaps in line with the lack of non-Chinese capacity, outbound travel has increased faster than travel to China. The Saber data shows that outbound bookings made up 43.5% of 2023’s total travel through February 9, compared to 37% for the same period in 2019.

Chinese are looking for places to visit

This year, the most popular destinations for Chinese travelers are Japan, Thailand and South Korea. Bookings to the UK, Thailand and the Philippines have recovered fastest, while Indonesia, a top outbound destination in 2019, lost its Top 10 spot to the Philippines. Australia has also dropped, falling to ninth place, possibly due to their COVID testing measures for travelers from China.

Conversely, the largest inbound travelers come from Taiwan, the USA, Thailand, South Korea, Great Britain and Canada. The report said population figures for 2021 showed that countries with the largest number of overseas nationals were based in Thailand, Canada and the UK, suggesting that many inbound trips were long-awaited family reunions.

Air China Boeing 787-9 at Frankfurt Airport

Photo: Vytautas Kielaitis/Shutterstock.

Saber also pointed out that booking windows can be an important gauge of traveler confidence “often happier to book further out if they feel confident in their plans.” As of February 5, 33% of all inbound and 43% of all outbound reservations were made more than two months in advance. In comparison, only 21% of outbound and 14% of inbound bookings were made within two weeks of travel, compared to 37% and 30% in the same period in 2019.

The fact that Thailand and the Philippines are the places Chinese travelers want to visit is a promising sign of airline recovery in Southeast Asia. Hopefully carriers such as Thai Airways, AirAsia, Cebu Pacific and Philippine Airlines can add capacity and build their presence to and from China.

Is this the start of a full recovery for aviation? Tell us in the comments.

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