European air traffic takes a dive as travel curbs continue to crimp jet demand

London — European air traffic fell sharply in the week to Jan. 20, shrugging off signs of an uptick over the previous week, while economic mobility in Europe's biggest economies remains little changed as COVID-19 containment measures continue to curb regional oil demand.

Commercial air traffic within Europe averaged about 69% below 2019 levels in the third week of January -- down from 58% a week earlier -- according to tracking data from AirNav.

Commercial air traffic, which is closely correlated to jet demand, has suffered heavily in the region, which continues to suffer from COVID-19 spreading at near peak levels. Western Europe already has the highest percentage of lost airline capacity globally -- 65% below levels seen at the start of last year -- according to aviation data provider OAG. Capacity has shrunk by one-third in the last two weeks in the region and now stands at less than one-quarter of the capacity levels operated last year. OAG estimates.

"Every indication is that we will not see any improvement in global capacity before the end of March and that was always the case even before the new year began," OAG said in a note this week. "What has perhaps been surprising has been the depth of the capacity cuts that we have seen in recent weeks which in turn will probably lead to a longer recovery period than was expected."

S&P Global Platts Analytics estimates Europe's jet/kerosene demand to be 655,000 b/d lower year on year in December 2020, at around 500,000 b/d.

Mobility flatline

Overall economic mobility in Europe's five biggest economies, however, was little changed in the week to Jan. 17, according to Google data, as the latest wave of economic lockdowns remain in place even though infection rates are beginning to slip in continental Europe.

Based on activity at workplaces, retail and recreational sites, and transport hubs, average mobility indexes in France, Germany, Italy, Spain and the UK were 43% below pre-crisis levels in the week, according to Google data, compared with 45% below in the previous week.

Often used as a proxy for gasoline and diesel demand, Google measures mobility on the number of visits and length of stay at locations, such as offices, based on mobile phone location data.

Economic mobility increased on the week in all countries except the UK and France, the data showed. At the start of the year, average mobility in the region had slumped to the lowest level since mid-May 2020 due to new waves of curfews, lockdowns, and travel restrictions.

For December 2020, Platts Analytics estimates that gasoline and distillate demand in the region was down 570,000 b/d vs year-ago levels due to lockdowns and restrictions on movement.