Asia travel recovery with AY.4.2 coronavirus variant on the door!! What it means for Economy and Airlines!

The Great Wall of China Source: Britannica

As Asia-Pacific tentatively starts opening to international air travel, Beijing’s tough ‘Zero-Covid’ approach means an air travel recovery will be anything but complete for airlines. IATA’s travel regulation map shows, China imposes tough requirements for those entering the country, including two weeks of quarantine. This is in contrast to regional peers, which are cautiously doing away with quarantines, replacing them with vaccine mandates for passengers and Covid-19 testing regimes. 

Fun travel to china is basically out of question and there are even considerable restrictions on visa holders. Moreover, the restrictions will discourage Chinese residents from travelling abroad, let alone support the legions of package tours that fueled so much Chinese air traffic growth before the coronavirus pandemic.
Beijing’s commitment to Zero-Covid is underlined by its rapid development of “health stations,” where arrivals will serve their two weeks of quarantine. 
In the year through September 2019, before the emergence of Covid-19, airlines operated 344,148 flights from Southeast Asia to Mainland China, this collapsed to just 8,710 in the year through September 2021.

One industry observer feels that China is basically irreplaceable, but that it is impossible to distribute former China capacity to other markets given that there is so much uncertainty around how the recovery will unfold. This, however, is mitigated by airlines having so many aircraft in storage. Moreover, China has traditionally been a tough market, characterised by overcapacity and low yields.

2022 is a critical year for China. In February Beijing hosts the 2022 Winter Olympics, an event it will not like to see marred by a Covid-19 outbreak. It has already banned overseas spectators from the event.

Then, in October 2022, it will hold the 20th Congress of the Chinese Communist Party (CCP). This event is expected to give Xi Jinping a third term as China’s president. Given the political sensitivity of this occasion, Beijing could end up sticking with Zero-Covid until late 2022 or even beyond. 

Hopefully we will see the airlines make a come back in the Asian markets !!
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source: flightglobal