China-overseas flights still 70pct below 2019: Fitch

Apr 20, 2023 Newsdesk Latest News, Rest of Asia, Singapore, Top of the deck  

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As of early April, reinstatement of overseas long-haul and regional flights out of mainland China is being outpaced by the comeback for domestic air travel, suggests Fitch Ratings Inc.

The comeback pace of mainland flights linking respectively to Macau, Hong Kong, and Taiwan also lags that for the internal mainland routes.

“Daily international flights only recovered to 28 percent of pre-pandemic levels as of early April, hobbled by the slow recovery in routes to North America, Japan, South Korea and Europe, due to travel restrictions and extended reviews and negotiations of traffic,” wrote Flora Zhu and Jenny Huang in a report issued on Tuesday, citing proprietary research and other data.

Management at Las Vegas Sands Corp, parent of Macau casino operator Sands China Ltd, and also developer and promoter of the Marina Bay Sands casino resort in Singapore, mentioned on the group’s first-quarter earnings call on Wednesday, that despite the easing in China of Covid-19 countermeasures in early January, there had not in the first three months of the year been a big uplift in business volume to Singapore from that market.

Fitch noted in its report: “The recovery in outbound travel remains muted despite strong demand as international flights were still about 70 percent below the pre-pandemic levels in early April and airfares were expensive.”

But the credit ratings house added that flights to Southeast Asia from China were “ramping up quickly”, led by services to Singapore and Thailand.

As of March this year, flights from Beijing Capital Airport to Singapore and Thailand reached 38 percent and 20 percent respectively of 2019 levels; while services from Shanghai Pudong Airport to Singapore and Thailand reached 60 percent and 40 percent, respectively, of 2019 levels, said the institution.

It also stated that while mainland China saw domestic flight traffic fully recover to 2019-levels as of early April, flights to Macau, Hong Kong, and Taiwan had in combination returned to only about 60 percent of pre-pandemic level.

Fitch further observed: “Flights to Japan and South Korea are likely to ramp up at an accelerated pace amid easing controls on travellers from China, while the Russian overflight restrictions will continue to affect the review of North American and some European routes.”

Maybank Investment Bank Bhd said in a memo last week, that within ASEAN – a club of Southeast Asia nations – the China to Singapore air route was recovering “the fastest” relative to 2019 volume.

“Singapore has emerged as a preferred outbound destination for high-net-worth Chinese and single Chinese women,” wrote Maybank analyst Samuel Yin Shao Yang, citing market research. He suggested that Genting Singapore Ltd, operator of Resorts World Sentosa, the Singapore market rival of Marina Bay Sands, would be one of the likely beneficiaries within the city-state’s  hospitality sector.

Thailand tops “the mind” of most Chinese tourists” as an ASEAN tourism destination, the Maybank memo also suggested, citing findings from Dragon Trail International, a marketing agency focusing on mainland consumers.

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