Prospects for Long Haul Travel: When Family Ties Count and Predicting Which Markets Will Come Back First

14 April 2021 / by Becca Rowland

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.

VFR Trips as a Proportion of all Air Travel to the UK, 2019

Origin Country

VFR trips, arriving by air

Source: VisitBritain

Air passengers to UK

Source: OAG

VFR estimated share of air passengers

ALL

9,992,172

121,677,595

8.2%

USA

980,007

6,661,842

14.7%

Ireland

908,304

5,012,106

18.1%

Spain

775,175

18,041,495

4.3%

Germany

692,279

6,108,806

11.3%

France

590,300

5,268,433

11.2%

Poland

569,190

4,094,107

13.9%

Italy

531,043

7,503,294

7.1%

Australia

456,869

1,023,379

44.6%

Netherlands

344,268

3,775,168

9.1%

Canada

332,918

1,243,762

26.8%

Switzerland

308,281

3,073,365

10.0%

Sweden

275,742

1,264,958

21.8%

Portugal

256,109

4,058,570

6.3%

India

228,459

1,614,177

14.2%

Romania

213,252

1,557,862

13.7%

UAE

212,745

1,268,423

16.8%

Denmark

186,249

1,649,083

11.3%

Norway

121,171

1,408,593

8.6%

Turkey

118,174

2,290,290

5.2%

Hungary

114,870

1,293,522

8.9%

China

111,710

1,197,065

9.3%

Greece

111,273

2,932,171

3.8%

Czech Republic

109,785

1,093,983

10.0%

Hong Kong

106,800

598,695

17.8%

New Zealand

99,439

218,207

45.6%

South Africa

96,964

567,696

17.1%

Nigeria

86,847

315,698

27.5%

Bulgaria

81,981

817,962

10.0%

Lithuania

80,807

601,284

13.4%

Malta

78,323

800,009

9.8%

Singapore

78,080

405,932

19.2%

Austria

77,158

967,721

8.0%

Israel

71,550

582,341

12.3%

Qatar

65,422

227,139

28.8%

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.

Bilateral Estimates of Migrant Stocks in 2017

Source: World Bank

Source Country

Destination Country

Value

Mexico

United States

11,573,680

India

United Arab Emirates

3,310,419

Russian Federation

Ukraine

3,309,525

Ukraine

Russian Federation

3,272,304

Syrian Arab Republic

Turkey

3,271,533

Bangladesh

India

3,139,311

Kazakhstan

Russian Federation

2,562,079

India

United States

2,434,524

Russian Federation

Kazakhstan

2,411,227

Other South

United States

2,353,166

China

Hong Kong SAR, China

2,343,868

Afghanistan

Iran, Islamic Rep.

2,324,884

India

Saudi Arabia

2,266,216

China

United States

2,130,352

West Bank and Gaza

Jordan

2,046,650

Philippines

United States

1,941,665

Puerto Rico

United States

1,903,730

Myanmar

Thailand

1,835,106

Indonesia

Saudi Arabia

1,548,032

Afghanistan

Pakistan

1,515,738

Turkey

Germany

1,492,580

Algeria

France

1,455,780

India

Pakistan

1,395,854

El Salvador

United States

1,387,022

Vietnam

United States

1,352,760

Pakistan

Saudi Arabia

1,343,737

Poland

Germany

1,334,000

Burkina Faso

Cote d'Ivoire

1,307,265

Cuba

United States

1,271,618

Syrian Arab Republic

Lebanon

1,209,286

India

Oman

1,201,995

United Kingdom

Australia

1,195,150

Malaysia

Singapore

1,158,890

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.

Largest Long Haul Migrant Connections: Bilateral Estimates of Migrant Stocks in 2017

Source: World Bank

Source Country

Destination Country

Value

India

United States

2,434,524

China

United States

2,130,352

Philippines

United States

1,941,665

Indonesia

Saudi Arabia

1,548,032

Vietnam

United States

1,352,760

United Kingdom

Australia

1,195,150

South Korea

United States

1,041,727

India

United Kingdom

809,000

China

Canada

711,555

United Kingdom

United States

696,896

United Kingdom

Canada

624,411

India

Canada

602,146

Philippines

Saudi Arabia

583,985

Germany

United States

563,985

Philippines

United Arab Emirates

538,590

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.

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Topics: Airports, Airlines, Coronavirus

Becca Rowland

Written by Becca Rowland

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