Airlines keep capacity tight despite China demand boom

Bloomberg

The world’s airlines are taking a cautious approach to China’s reopening, reluctant to immediately change up schedules and divert planes from other routes despite the internal pent-up demand for international travel.
Scheduled flights into China during January, February and March are up no more than 2.9% this week compared to last week, according to aviation data provider Cirium. That’s fewer than 100 more flights each month. Planned inbound services for the remainder of the year are little changed — a sign China’s relaxation of quarantine restrictions from January 8 are yet to convince airlines to make significant changes to their timetables.
Carriers’ lukewarm reaction to China’s border reopening amid a Covid surge doesn’t chime with the intense desire for overseas travel from people living in Asia’s biggest economy. Curbs on travellers from China are also limiting any immediate ramp-up in flights as major markets, including the US, mandate negative Covid-19 tests from arriving passengers.
“I don’t think airlines will shift capacity from what they’re doing now in China,” Subhas Menon, director general of the Association for Asia Pacific Airlines, said. Most will rather wait to assess the situation, with Hong Kong, which also recently did away with many Covid restrictions, being a useful testbed, he said.
Prior to the pandemic, China had a massive outbound travel market.
Mainland residents reacted swiftly to the news with bookings for outbound flights surging by 254% versus the same period the day prior, Trip.com Group Ltd data show. The top five destinations were Singapore, South Korea, Hong Kong, Japan and Thailand.
Flight bookings to Singapore jumped 600%, while bookings to the remaining four destinations soared around 400%. Airlines in those countries however weren’t rushing to add capacity.
Singapore Airlines Ltd said in a statement that it will “continue to monitor the demand for air travel and adjust capacity accordingly.” Cathay Pacific Airways Ltd welcomed the announcement and said it will “continue to communicate with relevant authorities and increase our passenger capacity to and from the Chinese mainland as much as possible.”
Korean Air Lines Co said it plans to increase flights to China after the two nations mutually agreed to boost connectivity. Even though China has lifted quarantine rules, there’s still a travel ban on group tours to South Korea that has been in place since 2017 — retaliation from China in response to a US-led deployment of an anti-missile shield in Korea.
Korean Air currently operates nine flights a week to seven cities in mainland China and will boost that to 15 flights to nine cities starting from next month, with the two additional cities being Shenzhen and Xiamen on top of Shenyang, Shanghai, Guangzhou, Dalian, Qingdao, Tianjin and Nanjing. Japan said it will require a negative Covid-19 test result for travelers coming from China after infections there exploded, and asked airlines not to increase the current number of flights.
Qantas Airways Ltd in Australia, another popular destination for Chinese tourists, said it would “keep customers updated about any plans we have to recommence flights into China.”
Other foreign carriers meanwhile remain limited by lingering pandemic curbs in terms of what capacity they can add back to China.