The upcoming Golden Week holiday in China is expected to generate record high airline traffic. Low ticket prices, pent-up travel demand, and the gradual easing of travel restrictions have all contributed to a favorable situation that is expected to result in what could be the busiest week for Chinese airlines.
According to data published by online travel booking company Qunar, domestic flights between October 1 and October 8 could potentially exceed 15 million. This is roughly a 10 percent increase when compared to the Golden Week holiday season last year. The company noted that travel volumes could be boosted by mainland tourists, who are still unable to travel overseas due to the pandemic.
In its report, Qunar revealed that average airfares based on pre-bookings have stayed around 10 percent lower when compared to the rates last year. This is the lowest average recorded in over five years. Analysts at Aviation Think Tank stated that ticket prices have remained at extremely low levels amid reduced demand, massive discounts, and oversupply.
"In previous years, it was full price or at most less than a 20 percent discount. The lower price stimulates travel demand but puts pressure on the balance sheets of airlines as overall revenue declines," Aviation Think Tank mentioned in its report.
Airlines are aware that offering steep discounts will hurt their bottom lines. However, most have chosen to go that route in an effort to spur demand and encourage tourists to travel more. Some Chinese airlines are even offering unlimited flights for a limited period to coax residents to resume their travel plans.
Over the past few weeks, Chinese airlines have engaged in fierce competition to entice travel to pre-book flights. The Institute of Aviation Research stated that the upcoming holiday will serve as a key indicator for the industry. If airlines managed to report growth in their average revenues collected per passenger-kilometer, it would indicate a clear rebound for the industry and a trend towards a full recovery.
As China slowly reopens its borders, domestic travel and tourism have managed to slightly rebound. Over the past quarter, domestic tourism managed to grow by around 11.7 percent year-on-year, generating estimated revenues of around 5.73 trillion yuan.
