The news that China removed quarantine requirements for inbound travelers and was reopening to all international travel from 8th January 2023 was a surprise, as nearly every global demand forecast for 2023 assumed nothing much would change before the second half of the year; what do the experts know after all?.
In 2019, China was the fifth largest international market in the world with over 102 million seats per annum of which Chinese carriers accounted for 53.8 million, or a 52% share of the market.
As the table below shows in 2022 China had slipped to 51st spot in the global rankings with just 7.4 million international seats - just ahead of Ethiopia but behind Cyprus - by any measurement a staggering collapse of position.
The current international market from China is just 7% of its pre-pandemic levels. Although the locally based airlines flipped a considerable amount of their capacity from 2020 to domestic services, the simple truth is that the financial results have been crippling for many airlines.
While the rest of the airline industry was reporting record revenues for the third quarter of 2022, China’s major airlines were reporting eye-watering losses:
- Air China lost US$ 1.2 billion - a cumulative year-to-date loss of US$ 4.6 billion
- China Southern reported year-to-date losses of US$ 2.4 billion
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Written by John Grant
