For some months now we have been tracking the air travel recoveries in selected markets. The chart below is our work in progress (we want to add the EU). The August drop-off is eye-popping. Especially in China. Our AirSavvi colleagues explained it this way: "new cases increased in Nanjing then spread nationally". Clearly, air travel remains highly sensitive and positively correlated with Covid waves. In China's case, their vaccines are apparently not as reliable as others. Besides the obvious impact on the travel industry economies for the countries listed in the chart, consider the downstream impacts on the economies as a whole. This is not reassuring, is it? To get another view of the above chart, here is the traffic in raw numbers as opposed to using base numbers. Here you see the relative size of these markets. The US August decline could even be seen as post-summer seasonality. Surprisingly, Canada looks like it is managing reasonably. This is no doubt because its relatively small population is now largely vaccinated. Bear in mind these two charts are tracking domestic traffic. The international situation is far worse. This is why the US opening up the North Atlantic market has been so welcomed by the EU and airlines on both sides. Everyone is desperate to start seeing revenues grow, never mind profits for now. Lessors and power-by-the-hour vendors will see some benefits, too.
