ANALYSIS: New year, new normal

Hang Zhao, senior consultant at ASM, looks at travel demand during Chinese New Year, the country’s most profitable season for air transport.

Hang Zhao joined ASM from Shanghai Juneyao Airlines where he had been a senior network manager. With a wealth of airline experience, Hang has analytical capabilities in flight routes and project management, as well as a sound knowledge of international flight application process and systems.

Chinese New Year, also known as Lunar New Year, is China's most important festival. This year’s Spring Festival travel season started on Jan. 28, 2021 and will run until March 8, with the Chinese New Year of the Ox holiday week taking place from Feb. 11-17.

Much like last year—when the COVID-19 outbreak hit weeks before millions of people were expected to travel for the Chinese New Year—the ongoing impact of the virus is disrupting China’s most profitable season for transport. 

Chart New year

Chart ny2

Monthly capacity in the Chinese market during February has dropped 29%, compared with the same holiday season in January 2020. The weekly seats comparison between the Spring Festival seasons of 2021 and 2020 shows a slightly weak starting performance in this year, with a 9% drop in domestic seats during the Chinese New Year week in 2021 from 2020.

According to statistics provided by the China Ministry of Transportation, on Jan. 28—the first day of Spring Festival travel season 2021—total passenger numbers for civil aviation only reached 523,000, a year-on-year reduction of 72.1%.

Early in January 2021, cities including Beijing and Shanghai, as well as provinces in North and Northeast regions, experienced small-scale COVID-19 outbreaks. Despite the efficient control of the virus, the Chinese health authorities are encouraging people not to travel during the holiday period to prevent COVID-19 cases from rising further.

Travelers must hold PCR negative test result within seven days to make the trip during Spring Festival travel season. The slogan of “Stay for Chinese New Year” has been adopted by multiple local governments in China and is starting to impact airlines’ expectations of revenue driven during the holiday season.

Obviously, the beginning of the most profitable season in China’s air travel market has not been ideal. However, while there are signs that the number of daily passengers is slowly increasing, demand under the "new normal" will remain uncertain for some time to come.

Photo credit: China Southern Airlines via Twitter