Chinese airlines and the country's economy will lead the recovery of the aviation sector from the impact of the Covid-19 pandemic, the International Air Transport Association (IATA) said yesterday in its revised outlook for this and next year.
China's large domestic market will allow a return to profitability by the end of this year, Iata said. Passenger demand has been steadily rising over the past few months, with flights — mostly domestic — carrying 50.323mn passengers last month, 4.97pc higher than September and 11.7pc less than the year-earlier period, according to data from China's civil aviation administration. But a number of Covid-19 outbreaks in different cities have also caused flight cancellations.
Air passenger demand in Asia-Pacific in 2021 is also expected to have the second-highest increase compared with this year among the regions at 50pc, just behind North America at 60.5pc, supported by the recovery in China and India's large domestic markets, Iata said. But demand next year is still predicted to be 43pc less than 2019 levels. Asia-Pacific being a manufacturing hub also allows it to benefit from the strength of cargo revenues.
But the dependence of Middle East airlines on connecting international flights and a lack of large domestic markets will delay the recovery in this region, Iata said, But airlines having grown their cargo business will lend some support to this market.
Global passenger volumes are unlikely to return to 2019 levels until 2024 at the earliest, Iata said.
Asia-Pacific jet fuel refining margins, or fob Singapore jet fuel swaps against Dubai crude values, rose to about a 4½-month high of $3.59/bl on 11 November but eased to $3/bl yesterday. While this is firmer from record lows of -$4.58/bl in early May, it is still much lower than the pre-pandemic average of $12.12/bl in January.
