The passenger volume of civil aviation increased by 5.5% year-on-year, the freight volume increased by 8.2% year-on-year, and the new aviation population was 35.63 million – this is the civil aviation report card of 2021 released on the 10th. In the past year, civil aviation has shown some resilience under the fluctuation and “beating” of the epidemic in some areas, but it will continue to face the huge losses of the industry. When the real recovery will come is still difficult to predict.
According to the data of Civil Aviation Administration of China, in 2021, the total transportation turnover, passenger transportation and cargo and mail transportation completed by civil aviation of China were 85.7 billion ton kilometers, 440 million person times and 7.32 million tons, an increase of 7.3, 5.5 and 8.2 percentage points respectively year-on-year, and recovered to 66.3%, 66.8% and 97.2% respectively in 2019.
A group of data just released by Ctrip also shows that in terms of price reflecting supply and demand, the average ticket price in 2021 is about 678 yuan (including engine construction fuel), a year-on-year increase of 13%, higher than the average ticket price in 2020 of 598 yuan, but still lower than the average ticket price in 2019 of 758 yuan.
Looking back on 2021, the civil aviation market recovered tortuously in the impact of the epidemic. From January to February, the epidemic situation in some areas led to strict travel control and the interruption of the recovery progress of the Chinese market; After the Spring Festival, China’s market demand recovered rapidly; In the first three weeks of July, the Chinese market performed very well, but the epidemic in Nanjing ended the summer peak season ahead of schedule, and the demand dropped to the bottom. In August, the number of tourists was less than 40% of that in the same period in 2019; In late August, the market recovered gradually again, and the number of passengers recovered to nearly 70% in the same period in 2019 in October; However, since winter, several local outbreaks and the impact of the traditional off-season have made the Chinese market continue to operate at a low level.
It is worth mentioning that from March to may, when the epidemic situation was well controlled in 2021, the recovery speed of civil aviation was very rapid, and the monthly passenger volume once recovered to the level close to that in 2019. During the May Day holiday, the passenger volume of Hainan Airlines even increased by 20% compared with the same period in 2019, and the outbound flights of some ten million airports also increased positively compared with 2019. This phenomenon shows that once the epidemic situation is substantially improved, the demand of civil aviation market will return quickly, or even “blowout”.
According to the report of China Merchants Securities Co.Ltd(600999) , generally speaking, the recovery progress of the civil aviation industry in 2021 is less than expected and the recovery time is longer. However, from the demand recovery speed after each trip control, China’s demand is resilient.
Under the shadow of the epidemic, a short-term market rebound is difficult to pull civil aviation out of the quagmire of loss.
In the first three quarters of 2021, Air China Limited(601111) , China Southern Airlines Company Limited(600029) , China Eastern Airlines Corporation Limited(600115) , Hainan Airlines, Spring Airlines Co.Ltd(601021) , Juneyao Airlines Co.Ltd(603885) six listed airlines suffered a total loss of more than 27.9 billion yuan. Among them, the loss in the first quarter was 17.182 billion yuan, the loss in the second quarter was significantly reduced to 268 million yuan, and the loss in the third quarter was 10.486 billion yuan. Only Spring Airlines Co.Ltd(601021) made a profit.
How will the aviation market go in 2022? The Civil Aviation Administration said that in 2022, it will strive to complete the total transportation turnover of 104 billion ton kilometers, 570 million passengers and 7.8 million tons of cargo and mail, which will generally return to the level of about 85% before the epidemic; Under the condition that the epidemic situation does not fluctuate repeatedly, we will strive to turn losses and increase profits in the industry as a whole.
The recently issued civil aviation development plan for the 14th five year plan also puts forward that the passenger transport volume is expected to reach 930 million person times in 2025, that is, the six-year compound growth rate of 5.9% from 2019.
“It is very possible to achieve the goals in the 14th five year plan.” Chen Xin, China tourism, accommodation, leisure and airport industry analyst at UBS Securities, told reporters, but he also pointed out that the recovery of the aviation market will still be blocked in the short term.
Chen Xin said that the recovery of China’s passenger volume will still be dragged down by the recent epidemic, such as the epidemic in Xi’an; Some regions advocate the local new year policy or further affect the recovery of passenger volume during the Spring Festival holiday; In addition, the travel policy may be further tightened due to the Winter Olympics and the two sessions. For the whole tourism and airport sector, the performance pressure in the first quarter was great.
From the whole year of 2022, due to the uncertainty caused by covid-19 virus variant, experts and research institutions are generally cautious.
“There may be more optimistic expectations in 2022. It is due to two factors: one is that the vaccination rate is rising, which has exceeded 85% in China; the other is that there are new variants of the virus, which spread rapidly, but the severe disease rate and mortality rate seem to have decreased. However, the major premise of optimistic expectations is that there are no new variants.” Zou Jianjun, Professor of China Civil Aviation Management Cadre College, said.
According to the work objectives set by the Civil Aviation Administration, in order to achieve an annual growth of 5.7% in passenger traffic volume and turn around the industry’s losses and profits in 2022, the restoration of international routes is of great significance, because a large number of idle international flight capacity flows into the Chinese market, resulting in excess supply in the Chinese market, making it more difficult to further repair the seating rate and ticket price.
Only when the international market is reopened and idle transport capacity is digested, can the recovery of civil aviation industry reach a new level. However, when the international market “reconnects” is the most difficult thing to determine in the current stage when vaccine variants continue to appear, raising doubts about the protection of the vaccine and the emergence of specific drugs.
Chen Xin said that the optimistic expectation is that assuming that it is possible to open up internationally in the second quarter of this year, China International may realize linkage, and the growth rate of passenger flow will be very fast, with an increase of dozens of percent. It is not even necessary to open up the European and American lines. Only opening up key markets such as Japan, South Korea, Thailand and Singapore in Asia can achieve considerable growth. The pessimistic expectation is that the international market will not be opened by the end of 2022.
Industry insiders said that from the demand side, the worst period of the epidemic has basically passed. What the civil aviation industry can do is to fully tap the potential of China’s market, accumulate development momentum, and wait for the substantial regression of the epidemic in the fluctuation of the bottom of the market.
According to the analysis of Anxin securities, with the promotion of vaccination and specific drugs, the suppressed travel demand is expected to recover explosively at any time. In addition, the market-oriented reform of civil aviation fares opens up the space for price elasticity. The inflection point of supply and demand certainty is superimposed on the upward fare, and aviation is expected to usher in a growth cycle.
(source: Xinhua Finance and Economics)
