China Slumps, Seasonal Slowdown Continues

We track scheduled flights (what’s planned) and tracked flights (what took off) from a sample of the largest airports across the world.

Looking at data up to 30 August:

• Global departures remain around 85% of 2019 levels, with the decline from the summer highscontinuing in line with historic seasonality (Chart 1).
• Asian departures dropped this week (-3.6%), with Chinesedepartures particularly badly hit. Shanghai (-12%), Beijing (-10%), and Hong Kong (-4%) constituted the three worst performers of the week out of the airports we consider (Chart 4).
• The decline comes as China sustains its zero-Covid policy. Recently, this has included banning 26 flights from the US due to outbreaks. This has, in turn, triggered a tit-for-tat response, with the US responding by blocking an equal number of flights to China (set for 5-28 September).
• Bert expects limited chance of China changing tack on zero-Covid rules until at least the critical CCP National Congress in November.
• By contrast, last week departures climbed in Europe (+1.9%) and the US (+1.3%). For Europe, it has been a summer of great disruption due to strikes and staff shortages. These frictions now appear to be fading, but there continue to be cuts to departures, while passenger caps have been extended at Schiphol and Heathrow.
• For more information on recent changes in COVID cases, please see our weekend report.

Information on long-term movements in-flight data is available below.

US

UK

Italy

Spain

Germany

France

Canada

China

Japan

Hong Kong

South Korea

Singapore

Thailand

Bilal Hafeez is the CEO and Head of Research at Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is a Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

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