Global aviation traffic to reach pre-pandemic levels by June
Avolon has revealed how travel is expected to recover in 2023
A paper entitled ‘2023 Outlook: Climb to Cruise’ published by aircraft leasing company Avolon,has revealed that global traffic will reach pre-pandemic levels by June.
After a 70 per cent recovery in passenger traffic last year led by Europe and North America, this year Asia will drive the recovery, especially due to the recent reopening of China.
The traffic recovery brought the sector on the verge of profitability in 2022, after combined sector losses of $180 billion in 2020 and 2021. The forecast for 2023 is expected to be approximately $4.7 billion as recovery continues.
The paper’s findings are:
- China drives global passenger traffic to 2019 levels by June. The reopening of the world’s second largest aviation market will drive a rapid increase in air travel
- Demand for travel is no longer the constraint to recovery, but airlines’ capacity to put planes in the air. Air traffic is still 25 per cent below 2019 levels, revenues are just 13 per cent lower as airlines flex their pricing power and raise fares
- Delivery delays have become endemic and an aircraft shortage is emerging given the lost production of 2,400 planes that had been planned but were not built due to the pandemic
- Airlines have shrunk their owned fleets by 3% since 2019, whereas lessors have grown theirs by 17% and now manage 53% of the global passenger fleet by value
- Sustainable Aviation Fuel (SAF) production tripled in 2022 but still represents only one per cent of the amount hoped to be produced in 2030.
Andy Cronin, CEO of Avolon, said: “The rebound in 2022 is set to continue in 2023, with China’s reopening helping to drive global traffic levels to pre-pandemic levels by June. Airlines are enjoying higher fares and load factors, and manufacturers are under pressure to ramp up production quicker.
“Whilst geopolitical and macroeconomic risks remain, this is a positive environment for lessors as supply constraints drive higher lease rates and increase the value of order books.”
Air travel recovery has continued month-on-month, according to IATA figures.