Demand for Flights to China from Hong Kong Increases as Restrictions are Lifted

As soon as residents of Hong Kong heard that China would no longer require inbound travelers to quarantine as of early next year, they flooded the internet in search of flights to key mainland cities.

Searches for flights from Hong Kong to the mainland on Trip.com and Ctrip, the two sub-brands of Trip.com Group Ltd., jumped by around 521% late on Monday evening compared to the same time a week ago on Dec. 19.

The most popular destinations were Shanghai, Beijing, Hangzhou, Chengdu, and Nanjing, with search traffic up significantly for all five cities. Shanghai saw the biggest increase, with searches up 1,039%, followed by Beijing with 718%. Hangzhou, Chengdu, and Nanjing also saw significant increases, with searches up 662%, 399%, and 411% respectively.

The National Health Commission of China has announced that, as of January 8, people arriving in China will no longer be required to quarantine for 14 days. Instead, they will only need to obtain a negative Covid test result within 48 hours of departure. This change eliminates one of the last remaining pandemic prevention measures.

"The number of people travelling from abroad to China is expected to increase," said Mike Arnot, an airline industry commentator and spokesman for aviation analytics company Cirium. "Flights to China by the world's major airlines are down more than 92% in December compared to December 2019, but this is likely to change in the coming months."

Carriers including British Airways Plc, United Airlines Holdings Inc. and Qantas Airways Ltd. stopped flying to China entirely during the pandemic, but are now beginning to rebuild their schedules. Those airlines that have restarted services to Hong Kong should benefit from higher load factors on their existing flights to the city, which is a major hub for connections to China.

Currently, travelers entering China are required to isolate themselves for eight days - five days at a designated quarantine hotel or central facility, followed by three days at home.

Tourism-related stocks surged today, with South Korea’s Lotte Tour Development Co. climbing as much as 7.7% and Japan Airport Terminal Co. gaining as much as 4.3%. These gains come as good news for the tourism industry in Asia, which has been hard hit by the Covid pandemic. South Korea and Japan were some of the biggest markets in Asia for outbound tourism from China pre-Covid, and hopefully the recent surge in stock prices is a sign that the industry is beginning to recover.

Shares of some Chinese airlines rose on Wednesday, with China Southern Airlines Co. up 1.2% and China Eastern Airlines Co. up 0.2%. Air China Ltd. slipped 1.8% in Shanghai.

The Civil Aviation Administration of China has said that it expects daily flight departures to increase to 70% of 2019 levels by as early as Jan. 6, and then to as high as 88% by the end of January. This comes after the quarantine measures were scrapped last week.

According to BloombergNEF, the global electric vehicle market is expected to grow significantly in the coming years. Sales of electric vehicles are projected to reach 21 million by 2030, up from 2 million in 2018. This growth is being driven by a number of factors, including falling battery prices, government incentives, and increasing consumer awareness of the benefits of electric vehicles.

Air China, China Eastern, and China Southern, dubbed China's "Big Three" carriers, will each ramp up weekly domestic flights by 23%, 5%, and 8%, respectively, between the last weeks of December and March 2023, totaling 40,960 flights in the week starting March 28, based on BNEF estimates. Increased operations may prove beneficial for these carriers, who have together lost $21.8 billion since the start of 2020.