Lifting of China’s Covid-19 travel restrictions to boost air traffic recovery at US airports
The lifting of China’s Covid-19 travel restrictions will boost international air travel and accelerate the recovery of air traffic, according to Fitch Ratings.
The move will also bolster revenues at select major-hub international gateway airports in the US, including Los Angeles, San Francisco and New York, which have established operations across Asian markets.
China’s reopening to international travel, which was announced at the end of December and came into effect in January, represents a sharp policy reversal and ends the last Covid-related restriction on a major global travel market.
Prior to the pandemic, China travel represented just a low to mid-single-digit percentage of total passenger levels for gateway airports. However, the growth potential is strong given the building economic ties and leisure-oriented demand.
The underlying travel demand in China is diverse, and the reopening is expected to benefit both business and leisure travel.
This combined demand should be a growth catalyst to large hub airports with sizable business and international travel segments and whose air traffic recovery has previously lagged domestic-focused, regional airports reliant on leisure travel.
Increased China travel will add to airports’ operating revenue base through greater gate and landing fee revenue and concession spending, solidifying international gateway airports’ finances and supporting credit at current rating levels.
Full China air traffic recovery to the US is expected to take one to two years before the resumption of normal organic growth, consistent with recovery timeframes for other global regions when travel restrictions were eased following Covid-19 lockdowns.
In most cases, international markets that reopened in early 2021 have nearly recovered to pre-pandemic levels heading into 2023.
China, along with other Asian countries such as Japan, South Korea and Taiwan, are key sources of international traffic for several US international gateway airports, particularly Los Angeles International, San Francisco International and John F. Kennedy’s privately operated international terminals, which have the largest share of Asia traffic of all US airports.
