We have been tracking some key air travel markets and recoveries have been spotty.  This reflects public health policies and vaccine rates.  None of the curves in the chart should come as a surprise to anyone in commercial aviation.

To enable market comparisons we have set January 2019 at 100 (base) for these markets.  2019 was a great year across the board for these markets, although India saw some disruption from the collapse of Jet Airways.

At the end of June 2021, we noted the US had recovered its leadership role as the largest domestic air travel market.  Here we are with July 2021 done and we can see China has turned back up, too.  The following chart illustrates the relative market sizes.

Canada
Canada’s severe lockdown has done tremendous damage to its travel industry. There is life as we see an upturn, but how long will it take to recover to its former self?  The Canadian air travel market is relatively small and, given the geographic size and spread-out population, protecting the domestic travel industry warranted more support.

India
India’s air travel market has seen significant growth over the past several years. Low fares and aggressive airlines have been pulling people from buses and trains. India has seen its airlines compete so vigorously that several ended in financial ruin.  The orange curves show a brief air travel recovery and then a decline as the pandemic swept across the country.  Our India runs later than other sources.

China
The pandemic hit China first and the market reaction was as dramatic as everywhere else. WE can see there was an attempt at a V-recovery, but that ran out of steam over the 2020 winter.  Another attempt at a V-recovery came early in 2021 but in May it too ran out of steam. In June 2021 a third V-recovery was attempted and that remains in force.  China, as a centrally-planned economy, is run differently from market-driven markets.  These V-recoveries were likely driven by government policies encouraging air travel.   But with the pandemic coming in waves, travelers showed reluctance.  Reluctance to travel in China could also reflect confidence levels in their vaccines. 

United States
The US air travel market is arguably the world’s most competitive (even after consolidation) and air travel is entirely market-driven. We have demonstrated that US domestic air travel closely follows the nation’s vaccination rate. While the US domestic air travel recovery has been wobbly at times in 2020, from February 2021 it has seen a steady rise.  The upper chart has the US domestic air travel passenger base volume at 107.9 compared to January 2019’s 100. It was a paltry 9.1 on July 1, 2020!  On July 1, 2019, it stood at 129.8.  If the “Delta” variant of Covid is a threat, the CDC doesn’t seem to think more lockdowns are helpful.

Summary
There are very few markets where domestic air travel can sustain a domestic travel industry. That means that for most economies a return to international air travel is crucial. But because nation-states are reacting to the pandemic differently, and policies are often conflicting, opening markets will continue to be on a case-by-case basis.  And almost certainly too slow for many!

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Addison Schonland
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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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