At OAG we’ve spent a year trying to understand how air travel will evolve post-COVID. One of the early observations was that large domestic markets would prove a lifeline for some airlines, and that regional air services would follow. Last to return would be long haul air services in part based on passenger concerns about travelling far from home and becoming stranded as countries changed rules and restrictions.

While the pandemic is far from over, there is light at the end of the tunnel for air travel, with some countries making significant progress in vaccinating their populations. Pent-up demand for long haul travel may well be there, but it’s hard to tell if it will actually materialise until travel restrictions are eased. When it does return, which markets may be the ones to show initial strength?

We’ve been looking at data on Visiting Friends and Relatives (VFR) as well as diaspora data to see if insights on these market segments can highlight where the first long haul traffic flows might return.

Reasons to Travel

Key to understanding demand for air travel is understanding why people travel in the first place. There are four core reasons: for leisure purpose such as family holidays and short breaks; for work, which might include business meetings, conferences and events; to stay in touch with family and friends living somewhere else in the world; and to migrate either temporarily or permanently. Leisure travel is the largest market segment and business travel may be the most lucrative. As a result, we typically spend far less time looking at VFR and migration data than leisure and corporate travel data. As we look forward, long haul leisure travel feels like it may be more discretionary than ever for some time, while a portion of business travel may simply never return as digital meetings replace face-to-face meetings.

In contrast, the experience of the global pandemic may leave friends and families with more reasons than ever to come together, and the economic uncertainties that drive migration will continue. So, can the patterns of family ties associated with migration, diaspora communities, and overseas study – in other words, the drivers for VFR - tell us anything about which long haul markets might be in a better position to return sooner than others?

Counting Family Ties

The UK is a country that researches the extent of VFR travel to the UK through its regular international passenger survey and makes that data available publicly. VisitBritain data for VFR travel is available by country of origin, year and quarter, mode of transport, age grouping, type of travel package, length of stay and nationality. In 2019, this data shows there were just under 10 million VFR trips to the UK made by air. The UK is also one of the countries with the highest levels of COVID-19 vaccination which could potentially mean it feels a relatively safe place to travel to as and when air travel is possible.

Comparing the number of VFR trips to the UK with the volume of international air passengers arriving in the UK over the same time period, shows that about 8% of all visitors were travelling to see friends and family, though to some extent their trips may have included a large element of the same activities that would take place on a typical leisure trip.

A number of these origin countries stand out as both requiring long-haul flights and having a relatively high share of VFR traffic. Around 45% of all trips made to the UK from Australia and New Zealand appear to involve visiting friends and relatives and while travel isn’t possible just now, it seems likely that there will be pent-up demand for travel when it is permitted.

Although smaller as a proportion of total travel, at 15%, VFR travel from the US to the UK has been twice the size of the Australia market. With both countries making headway in vaccinating their populations, this is another long haul market that may see travel return sooner rather than later.

Other long haul markets from the UK with strong VFR components are the UAE, Hong Kong, Nigeria, Singapore and Qatar.

Diaspora Communities and Air Travel

Another measure of underlying demand for air travel can be found in patterns of migration between countries, either for long term residence or for temporary work or study. The World Bank has a database with estimates of bilateral migration flows (or stocks) between countries. Where migrant communities, or diaspora, are sizeable and the links to their country of origin are current or recent, both money – in the form of remittances - and people flow back and forth. Where the links are strong it should be expected that VFR traffic will also be strong.

As the list of the largest migrant stocks by country of origin and destination country shows, many migrant populations reside in neighbouring countries or within the same region. At the top of the list are Mexicans living in the US, and while some of the strength of the travel market between the US and Mexico over the past months can be attributed to a lack of restrictions on air travel as well as Americans holidaying in Mexico, it may well be that the familial ties have contributed to the market strength.

The second largest migrant population is Indians living in the UAE, and there are sizeable population in Saudi Arabia, Oman, Kuwait and Qatar. While these are not long haul markets, travel flows between India and these countries have in the past supported the overall business model for the Middle East hub airports such as Dubai, Abu Dhabi and Doha, and will do so once again.

Currently the Middle East hubs are operating only 50% of the capacity that they were two years ago (DXB -50%, AUH -57%, DOH -43%). Interestingly, capacity from Dubai in April 2021 to South Asia, which includes India, is currently only 14% below where it was in April 2019 while capacity to destinations within the Middle East is 56% below where it was. Is this another indication of how migrant workers and the need to travel home is able to support air travel markets in these difficult times?

India’s second largest migrant community is located in the US where the diaspora numbers almost 2.5 million. As and when these communities are able to fly again they will provide a boost to the Middle East hubs, as will the largest migrant population on the list originating in Europe which is Brits living in Australia.

Although not a long haul route, ranked 21st on the list of diaspora communities are the Turks living in Germany. While capacity is currently 60% below where it was in April 2019, the current schedule shows that by July this will improve to be just 1% below July 2019 capacity. Much of this anticipated traffic will, no doubt, be Germans taking vacations in Turkey, but given that the capacity proposed will be almost double that of any other European market to Turkey, it is possible that the presence of a VFR market adds weight to network planning decisions.

Support for Long Haul Markets

So, if size of diaspora community were to be a factor in anticipating where long haul routes might generate traffic volumes soonest, then of the Top 15 which should be considered, 10 involve the US or Canada, 3 are transatlantic, 3 involve travel from the Philippines, and a number do or could include a Middle East airport.

With the US and UK performing well in terms of vaccinations and the likes of China, Australia and Vietnam having the coronavirus largely under control, the prospects look good for at least some of the routes to re-open for mass travel before too long.