ISTAT Jetrader - Winter 2021 - 41

FIGURE 1: PERCENT OF POPULATION FULLY VACCINATED
AS OF 8 AUGUST; NARROWBODY FLEETS
Source: One World in Data, Bernstein analysis
In Figure 1, we show narrowbodies because they will
be the first to recover. It has been common knowledge that
the widebody market would be hit much more severely than
the narrowbody market and that the widebody recovery
would take longer. Exacerbating the widebody issues
was the fact that widebody demand was already weak
prior to the pandemic. But what appeared to not be well
understood was that international traffic plays a large role in
narrowbody demand as well. It is not just about recovery in
U.S. domestic, China domestic or even intra-European travel
that matters. In fact, in 2019, 41% of narrowbody capacity
operated on routes outside of those three areas. Again, a
global recovery is what is needed.
We see countries falling into three categories. The first
category is basically North America and Europe. These
countries made strong early progress in vaccinations, which
moved above 50% penetration, plus added immunity from
infections. U.S. domestic travel is essentially open, and
intra-European traffic is opening rapidly. Traffic growth
has been highly correlated with vaccine penetration in both
regions. The next group includes countries where vaccine
penetration has been rising rapidly but without internal
lockdowns. India and Brazil fall into this category. Domestic
traffic is moving up rapidly after a pullback. The third
category has been the big problem. These are countries in
which COVID-19 has been controlled through zero-tolerance
type policies. These countries, which have enforced
lockdowns on a regular basis, include Australia, Vietnam, New
Zealand and China.
The good news right now is that vaccine penetration in
markets outside North America and Europe have been rising
rapidly, and we are finally seeing evidence that lockdowns
will end. Countries like Australia, Malaysia and Japan now
have higher vaccination rates than the United States, although
they are not benefiting from high levels of prior infection. We
now appear to be at a turning point as vaccinations move to
very high levels and lockdowns start to end. Australia finally
opened its borders to vaccinated travelers on 1 November.
Other countries are also finally opening up as well (e.g.,
Malaysia, New Zealand, Vietnam).
Figure 2 shows where these markets stand now in
terms of first doses. First-dose penetration indicates that
within three to four weeks, these numbers will translate to
fully vaccinated. Nearly all major markets have moved out
of the red-dashed circle and are already at 50%, although
a few areas lag (e.g., Russia, Philippines, much of Africa).
Many of the countries shown here have fewer reported
infections (likely some underreporting), but more authoritarian
governments can push through vaccination programs more
easily than, say, the U.S., where vaccination progress has
somewhat stagnated, although infection levels have continued
to rise.
We expect most important markets to be open by the spring
of 2022, as lockdowns make little sense with the delta variant.
Jetrader * WIN TER 2021 * 41
ISTAT Jetrader - Winter 2021

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