China’s air travel recovery shows power of vast home market

China’s biggest airlines could provide some much-needed encouragement for an aviation industry starved of good news when they report earnings later this week. While the coronavirus will still likely saddle Air China, China Eastern Airlines and China Southern with losses for the latest quarter, financial statements from the so-called Big 3 may point to a nascent recovery in air travel thanks to demand in their vast domestic market. July traffic figures were promising, with passenger numbers for the three airlines rising about 25% from June as travel within China picked up. The trio flew a total of 22m passengers domestically last month, more than 500 times as many flown at all by Hong Kong-based Cathay Pacific Airways, which has no home market to fall back on. Revenue passenger kilometers also jumped, though the numbers remain far below a year ago, pre-pandemic. After being the first hit by Covid-19, China is emerging from the crisis; it’s the only major economy on track to expand this year. Businesses have reopened and people are traveling again after the government eased restrictions on movement, including for inter-provincial group tours. Popular Chinese destinations include Jiuzhaigou, famous for its colorful lakes, and Yangshuo and cities such as Chengdu, Shanghai and Beijing. Some places are receiving almost three times the number of visitors than last quarter, HSBC Holdings analysts led by Parash Jain wrote in a note dated Aug. 17, citing Trip.com data. Hotels have also become busier after the curbs were lifted. <br/>