Over 54,011 airline flights scheduled to, from, and within China between January 23 and February 4 were canceled, according to Cirium data cited by CNBC, creating a ripple effect for global oil demand.
The 50,000+ flights account for 28% of all scheduled flights to, from, and within China, and 14% of those flights that were canceled were international flights.
And more cancellations are coming.
And as much as China is hoping that airlines will not get too carried away by cancelling flights, even China’s state-run airlines are considering flight cancellations. Earlier this week, Air China announced that it was canceling some flights to Singapore, Vietnam, and Australia, and is considering limiting its China to US service to just two routes.
China has the second highest number of airline passengers in the world behind the United States, although it is expected to surpass the US in the number of passengers some time this decade.
The flight cancelations have cut into jet fuel sales, which slumped by 25% in the last week of January—a slump that will no doubt trickle down to its source—crude oil.
Jet fuel, a middle distillate, has been a mainstay of the crude oil industry. While crude oil has other, larger, applications, its demand growth is expected to outpace all other petroleum products in the next couple decades, according to the IEA, which sees jet fuel demand rising 50% by 2040.
And because demand for jet fuel has been secure with no viable alternative, the oil industry hasn’t been too worried about the world giving up on jet fuel. The rest of the transportation sector remains under threat by electric vehicles.
Airlines and world leaders are restricting travel in a mad dash to contain the coronavirus epidemic, which has so far claimed the lives of more than 560 people and infected 28,000.