7 Air Passenger Outlook: China Reopening
Recovery in China’s international air transport demand
Airlines ultimately plan their capacity in consideration of passenger demand, which in turn is determined by a number of
factors, including the price of air travel. As airline capacity recovered on the back of the reopening of China’s aviation markets,
average airline yields on inbound air travel to China in Q1 2023 have remained elevated at more than double the level seen in
Q1 2019. In comparison, global average inbound yields (excluding markets bound for China) in Q1 2023 were only 30% higher
than the pre-Covid levels. As more capacity is added to international markets, yields are expected to moderate, contributing
to an improvement in passenger demand recovery.
Indicators of demand recovery
Following China’s reopening, international inbound passenger demand increased from 11% of the 2019 level in January to
23% in March. Passenger load factors on relevant markets, measuring the proportion of passengers compared to the
available airline seating capacity, maintained their upward trend albeit at a slower pace since January 2023. As airlines
restored their capacity in response to the growing passenger traffic, the average load factor in Q1 2023 recovered to within
13 percentage points of the average in Q1 2019. Assuming the current load factors are maintained and based on the
scheduled capacity for the upcoming months, inbound air passenger demand to China could reach 40% of pre-pandemic
levels by the end of July, compared to the 53% of recovery in inbound capacity (Figure 5). Consequently, an average of 2.3
million inbound passengers would be added to this market per month between April and July. As international travel resumes,
airline schedules will become more consistent, and yields are expected to moderate. Under these conditions, changes in
airline scheduled capacity and passenger demand will be aligned. It is therefore unlikely that the current 3-month lag in the
recovery in passenger traffic compared to that in scheduled capacity will hold in the later stages of the recovery. Instead, this
lag is expected to diminish as airlines moderate their capacity growth in order to support healthy load factors.
Ticket sales data also provides valuable insights regarding the demand recovery profile. Flight bookings and travel surveys
indicate that the outbound demand for air travel has been strong for Chinese travelers (McKinsey). Demand for inbound
travelers to China can also be assessed by the change in bookings or ticket sales for the upcoming summer travel period
(May – September 2023).
5,6
Table 2 outlines the change in ticket purchases in 2023 compared to 2022, and to the pre-
pandemic 2019 levels. The recovery in inbound passengers from the Asia Pacific region (excluding China), which accounted
for 27% of all inbound tickets sold in 2019, is a primary driver of the recovery. The region’s passenger traffic could recover
to 37% of 2019 levels over the upcoming summer travel period, similar to the 36% recovery estimated across all regions.
This lags the anticipated recovery in inbound flights, which is expected to reach 53% of 2019 levels in July, based on the
scheduled capacity for that month.
Purchased tickets also indicated that travelers from Europe may return to around 45% of their 2019 levels, while travelers
from North America may reach approximately 32% of their 2019 levels during the upcoming summer period. In 2019, Europe
accounted for nearly 10% of purchased tickets for flights to China, while North America’s share was around 9%. Although the
recovery profile of other regions of origin is promising, their collective contribution to China’s inbound international ticket
sales in 2019 was less than 2%.
Table 2: % Change in ticket sales for flights to China for May-September travel period
Comparison years Africa
Europe
Source: IATA Sustainability and Economics, using data from DDS for tickets purchased in January-April of each year.
5
For the May to September 2023 travel period, we estimated the change in ticket purchases against ticket sales for the same travel period
in 2019. Consistent purchase periods, January – April, in 2019, 2022, and 2023 were used for the comparison.
6
These estimates could be viewed as conservative given that recent booking trends suggest that, since the pandemic, more travelers
purchase their tickets closer to their date of travel.