Chinese Air Travel Remains Well Supported

China’s air passenger traffic hit a record high in July with the total trips made reaching 62.4 million, according to the latest data from the Civil Aviation Administration of China.

• International air passenger traffic is still slower to recover in July as it stood 51% lower than in the same month of 2019, according to CAAC data.
• China recently lifted a ban on group tours to countries including the US, UK and Australia, and a planned increase in US-China routes from September 1 is expected to boost flight capacity before further increases.
• Chinese airlines will be allowed to fly up to 24 flights to the US each week from October 29th, while US carriers will be permitted to operate the same number of flights to China. This remains well below pre-pandemic levels of ~350 flights a week. The current permitted level is 12.
• Chinese and US officials this week said they are working on opening up further flight schedules between the countries from next year.
• Many industry forecasts such as from the IEA, S&P Global and Vitol have forecast China will drive half of global jet fuel demand growth this year, which in turn is primed to account for around half of overall oil demand.
• BNEF expects China’s jet fuel consumption from domestic flights to hover around 0.72m b/d throughout September and October, before ramping up to 0.85m b/d in November.
• International flights are on an increasing trajectory and likely to break the 0.13m b/d mark by November. This is likely due to the anticipated increase in international flights and the addition of winter schedules.
• The latest airportia figures show overall China flight miles narrowly below that of 2019 levels. (see chart)