China’s return is thought to be the final missing piece in the global air travel recovery. Domestic travel has led the rebound in Asia’s top aviation market, and now international travel is set to take off after the lifting of a ban on group tours to popular destinations.
While aviation fuel prices are nowhere near the highs of last year, they’ve jumped about 30% this month compared with the start of July, trading above $116 a barrel in Singapore, according to Bloomberg Fair Value data. A big question mark for the outlook on oil and the global economy has been China’s uneven recovery. While overall growth in the nation has been weaker than expected, various data on flight bookings are an encouraging sign.On the domestic side, China weekly flights surged 13% above pre-Covid levels in the week ending Aug. 20, according to travel platform Flight Master.
China’s jet fuel demand is poised to accelerate from August, and could return to pre-Covid levels by the fourth quarter, Energy Aspects said in a note. On a global level, while demand is set to rise by an average of 200,000 barrels a day in the latter half of the year from the first six months, a return to pre-pandemic levels will only take place as soon as mid-2024, said Mukesh Sahdev, head of oil trading/downstream solution at Rystad Energy.