US at Risk of Lagging in the Recovery

We track scheduled flights (what’s planned) and tracked flights (what took off) from a sample of the largest airports across the world.

Looking at data up to 27 June, we find the following: 

• Global flights are at 85% of 2019 levels, with 105k departures per day, an increase of 8k since the start of June (Chart 1).
• China’s reopening is stumbling. The positive news is that there are less stringent entry conditions, kids have returned to class in Beijing, and Shanghai will gradually resume indoor dining. The offset is that Shenzhen has shut down the city district of Futian. But the positives are outweighing the negatives. Departures continue to increase from Beijing (+15.8% WoW) and Shanghai (+5.1% WoW) while they have more than doubled from recent lows (Chart 4). Elsewhere in Asia, Thailand will only require travellers to show proof of full vaccine or a negative PCR test from 1 July, while there has been a significant easing in entry rules for Malaysia, Singapore, South Korea, and Cambodia.
• Easing restrictions are helping Greece boom, there has been an 884% increase in tourists over the past year. In fact, Europe has led the recovery in flights this year (Chart 2). However, the rapid return to normality brings risks with it. Germany is expecting a surge in cases in H2, and as such are said to be set to restore mandatory mask rules for indoor areas this autumn.
• In the US, cases are stabilising, but flights aren’t moving much higher. Surprisingly, departures have decreased 0.3% since the US dropped negative test requirements for foreign visitors, for the airports we track.
• For more information on recent changes in COVID cases, please see our weekend report by Henry.

Information on long-term movements in flight data is available below.

US

UK

Italy

Spain

Germany

France

Canada

China

Japan

Hong Kong

South Korea

Singapore

Thailand

Bilal Hafeez is the CEO and Head of Research at Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

Ben Ford is a Researcher at Macro Hive. Ben studied BSc Financial Mathematics at Cardiff University and MSc Finance at Cass Business School, his dissertations were on the tails of GARCH volatility models, and foreign exchange investment strategies during crises, respectively.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)