Europe Air Traffic Reaches 50% of 2019 as Recovery Continues

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The recovery in Europe’s air traffic has hit a new milestone as people take to the skies again for summer vacations.

Aside from a brief pickup around Christmas, Europe’s air traffic is at its highest compared with pre-Covid levels since March last year, when the continent’s lockdowns really began to affect demand. On Sunday it rose just above 50% of 2019 levels based on a seven-day moving average, data from Eurocontrol show.

The revival offers some hope to the continent’s airlines, but also its oil refiners who’ve seen demand for aviation fuel collapse. The pandemic-driven slump in flying saw them divert production of normally valuable jet fuel into other oil products, like diesel and naphtha. Jet fuel’s price differential to diesel -- an important metric for traders -- has been slowly recovering from the lows of 2020.

Europe Air Traffic Reaches 50% of 2019 as Recovery Continues

In April, consumption of jet fuel and kerosene in OECD Europe was 690,000 barrels a day, according to the International Energy Agency. That’s an increase of 74% compared with a year earlier.

Europe’s air traffic has generally been on an upward trend since about mid-May, according to data from Eurocontrol. There could also be an influx of tourists from America in the coming months, with the EU lifting travel restrictions for U.S. residents.

Still, there’s a long way to go for Europe’s flight numbers. Even in Eurocontrol’s most-optimistic scenario, the continent’s air traffic is only set to reach 79% of 2019 levels by the end of this year. In the U.K. -- home to many travelers to mainland Europe -- the government’s decision to keep in place tight travel restrictions is widening a rift between airlines and health authorities.

“Demand is still well off pre-Covid highs and this is likely to be the case for years as international travel remains depressed,” said Jonathan Leitch, an oil market analyst at Turner, Mason & Co.

©2021 Bloomberg L.P.

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