Laura Sanicola and Ahmad Ghaddar, Koustav Samanta

(Reuters] – Jet fuel has been slow to recover to the pre-pandemic demand levels. However, more governments are making air travel simpler.

Analysts estimate that global jet fuel demand remains at 15-20% below its 2019 level, however, rising vaccine levels have led to an increase in passenger flight bookings over the past few weeks.

“The rate of vaccination continues to rise. A Singapore-based trader in jet fuel said that he doesn’t see any reason why the aviation market won’t grow.

I believe airlines would love to be able to meet the festive year-end travel demand, with blessings from their governments. VTL (vaccinated travel path) flight setup can pose logistical challenges.

Air travel in Europe has increased over the past months. As COVID restrictions become less restrictive, more Europeans book flights to destinations beyond Europe.

Beginning Nov. 8, fully-vaccinated travelers will be allowed to fly from 26 European countries, which include France, Germany and Spain.

Other than the United States of America, other countries have also announced plans to remove extraordinary restrictions from international flight. These include Thailand and Singapore which are major tourism destinations.

European jet fuel consumption is nearly 72% higher than pre-COVID levels. It has grown for a third consecutive weekly, when it would typically experience seasonal declines in pre-COVID periods, data from Rystad Energie.

According to Reuters assessment, Northwest European spot cargo jetfuel prices have risen 30% from mid-August. They were at $734.50 per tonne as of Nov. 4. Crack spreads The price of a barrel has more than doubled, to approximately $12.7 during the same period.

In mid-October, the European jet fuel industry profit margins reached $13.50 per barrel for 2021. The crack spread is also called the margin. It traded at around $12 per barrel in November 3, which was a fourfold increase over the year before, but remains below the level of the crack spread.

(GRAPHIC: Jet fuel margins – https://fingfx.thomsonreuters.com/gfx/ce/egpbkayywvq/Pasted%20image%201636090701361.png)

Traders are looking for signs that the demand is really taking off. They were watching airlines’ filling rates and adding flights to international routes.

A senior U.S. refine products trader said that there is currently only one nonstop flight between Houston and London. He added, “Right now, there’s only one direct flight…we’re not currently planning for an enormous spike in jet demand yet.”

The United States is seeing a rise in domestic travel as consumers book more flights and their bookings are increasing due to the vaccination rollout for children 5-11 years old.

Bank of America (NYSE ) reported that consumer spending in the U.S. on airline companies surpassed levels seen two years ago. It was the highest level since July. According to Bank of America, this could reflect parents becoming more relaxed about flying during the holiday season because their children are vaccinated.

According to OAG, the global seat capacity for scheduled airlines is currently 27% lower than it was two years ago. It is forecast to increase through March according to aviation data firm OAG.

Lufthansa reported that new bookings currently exceed 80% for 2019. This is due to recovering business bookings as well as rising demand in long-haul flight, particularly to the United States. The United States is the most profitable and important market for German airlines.

The majority of international flights to Asia are still grounded despite the recovery in Europe and the reopening of the United States. Many East Asian countries require international travellers to be quarantined at the destination, which can limit their ability to travel.

Spot oil prices in Singapore rose 21% during the last 3 months and were $93.05/barrel on Wednesday. However, Asian fuel crack spreads increased more than 89% over that time to nearly $13 per barrel.

According to the Singapore-base trader, crack spreads are also supported by tight supply.

China is the second largest economy in the world and authorities are imposing tighter restrictions. Beijing officials have instructed residents not to leave the city and postpone any weddings. They also advised them to cut down on non-essential events.

As of Wednesday morning, 60% of flights to Beijing Daxing Airport had been cancelled, while half of those at Beijing Capital International Airport had also been canceled.