July 9, 2024

Jet demand is about to close the post-pandemic gap in WoS

US daily air passenger throughput made notable strides over the last couple of weeks, now settling at an all-time high of 2.82 million daily travelers, exceeding, both, pre-pandemic and 2023 levels by some 170k daily travelers (or +6.5%, based on a 7DMA, see chart). We estimate that June has been the first month of US jet/kero demand exceeding 2019 levels (by roughly 20 kbd), thus staging a full post-pandemic recovery.

US: Daily Air Traveler Throughput 7DMA (‘000 Passengers)


Source: TSA

US: Jet Yields (%)


Source: EIA

Meanwhile in Europe, flight volumes have been slow to make further gains vs 2019 levels, coming short vs this metric in late June by some 6.8% (see chart), with NWE still struggling to close the gap (NWE is at -8.8%, whereas the Med came in at +6.1% in the latest data, highlighting the different stages of recovery for the 2 regions). However, Europe is only now heating up to its seasonal peak with holiday season commencing in many key regions. This dynamic should provide another boost to European jet/kero demand over July and August, likely coming close to 2019 levels, while having been still short these levels by some 100 kbd in June (Kpler estimates). A progressively tighter European jet/kero balance over the summer months should then help the European regrade turn positive in the near term.

Flight Volumes vs 2019 for Selected Countries (%, 7DMA)


Source: Kpler based on Eurocontrol Data

Passenger metrics in Asia have been far from stellar lately, most notably China, which had air passenger kilometres trending lower and towards 2019 levels per the latest April data (domestic travel has rebounded a lot more strongly than international travel in Asia). We are now in the midst of low demand season across Asia, with jet/kero demand expected to be almost converging with 2023 levels over the summer months, after having exceeded this metric by some 500 kbd back in January. Another seasonal boost is unlikely to transpire before September, with the gap vs 2019 levels expected to remain steady at roughly 350 kbd in the foreseeable future. This paints a rather lackluster picture for the Asian regrade, which should keep it in negative dollar per barrel territory for the time being (unlike its global peers).

Asia: Jet/Kero Demand (kbd)


Source: Kpler (Data from May 2024 onwards are forecasts)

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