Excluding the deeper impact of the ongoing Russia-Ukraine conflict, the passenger number is expected to exceed the pre-COVID-19 levels in the next two years
Two years ago, the novel coronavirus took over the entire world and was declared as a pandemic. The travel landscape has not been the same ever since. Multiple waves of the virus taking over the world, various travel restrictions, and additional hassles changed the passengers’ behaviours, travel frequency, and just how the world moves. However, the restrictions are gradually easing, and passengers are starting to move again following the successful vaccination drives and the lowered rate of the disease’s spread.
While the US and Russian domestic markets have recovered, the same is not true for the other major domestic markets of China, Canada, Japan and Australia
Noting this rising sun over the travel industry, the International Air Transport Association (IATA) stated that the passenger number is expected to exceed the pre-COVID-19 levels by 2024. IATA expects overall traveller numbers to reach 4.0 billion in 2024 (counting multi-sector connecting trips as one passenger). According to IATA’s long-term forecast, in 2021, overall traveler numbers were 47 per cent of 2019 levels. This is expected to improve to 83 per cent in 2022, 94 per cent in 2023, 103 per cent in 2024 and 111 per cent in 2025. Additionally international traveler numbers in 2021 were 27 per cent of 2019 levels. This is expected to improve to 69 per cent in 2022, 82 per cent in 2023, 92 per cent in 2024 and 101 per cent in 2025. The expectations for the shape of the near-term recovery have somewhat shifted, given the evolution of government-imposed travel restrictions in some markets. Yet, the overall picture presented in the February update to the forecast, remains unchanged from what was expected in November, prior to the Omicron variant.
Towards the end of 2021 and the beginning of 2022, the Omicron variant made headlines but the impact was not felt in equal severity as it was during the Delta variant. IATA’s Director General, Willie Walsh, said, “The trajectory for the recovery in passenger numbers from COVID-19 was not changed by the Omicron variant. People want to travel. And when travel restrictions are lifted, they return to the skies. There is still a long way to go to reach a normal state of affairs, but the forecast for the evolution in passenger numbers gives good reason to be optimistic”.
IATA has been constantly emphasising on the following:
In 2021, overall traveler numbers were 47 per cent of 2019 levels. This is expected to improve to 83 per cent in 2022, 94 per cent in 2023, 103 per cent in 2024 and 111 per cent in 2025
“The biggest and most immediate drivers of passenger numbers are the restrictions that governments place on travel. Fortunately, more governments have understood that travel restrictions have little to no long-term impact on the spread of a virus. And the economic and social hardship caused for very limited benefit is simply no longer acceptable in a growing number of markets. As a result, the progressive removal of restrictions is giving a much-needed boost to the prospects for travel,” said Walsh.
Based on the progressive relaxation or elimination of travel restrictions in many markets, the data mentioned in the forecast is a slightly more optimistic nearterm international recovery scenario compared to November 2021. This has seen improvements in the major North Atlantic and intra-European markets, strengthening the baseline for recovery. Asia-Pacific is expected to continue to lag the recovery with the region’s largest market, China, not showing any signs of relaxing its severe border control measures in the near future. While the US and Russian domestic markets have recovered, the same is not true for the other major domestic markets of China, Canada, Japan and Australia. Also, the outlook for the evolution of domestic traveler numbers is slightly more pessimistic than in November. The forecast added that in 2021, domestic traveler numbers were 61 per cent of 2019 levels. This is expected to improve to 93 per cent in 2022, 103 per cent in 2023, 111 per cent in 2024 and 118 per cent in 2025. Hence, the international association noted that not all markets or market sectors are recovering at the same pace.
“In general, we are moving in the right direction, but there are some concerns. Asia-Pacific is the laggard of the recovery. While Australia and New Zealand have announced measures to reconnect with the world, China is showing no signs of relaxing its zero-COVID strategy. The resulting localised lock-downs in its domestic market are depressing global passenger numbers even as other major markets like the US are largely back to normal,” said Walsh.
“People want to travel. And when travel restrictions are lifted, they return to the skies. There is still a long way to go to reach a normal state of affairs, but the forecast for the evolution in passenger numbers gives good reason to be optimistic,” said IATA’s Director General, Willie Walsh
Asia-Pacific: Owing to the slow removal of international travel restrictions, and the likelihood of renewed domestic restrictions during COVID outbreaks, IATA expects that traffic to/from/within Asia Pacific will only reach 68 per cent of 2019 levels in 2022, the weakest outcome of the main regions. 2019 levels should be recovered in 2025 (109 per cent) due to a slow recovery on international traffic in the region.
Europe: As confidence rebuilds, passenger preferences for short-haul travel is expected to benefit the intra-Europe market during the next few years. This will be facilitated by increasingly harmonised and restriction-free movement within the EU. Total passenger numbers to/from/within Europe are expected to reach 86 per cent of 2019 values in 2022, before making a full recovery in 2024 (105 per cent).
North America: After a resilient 2021, traffic to/from/within North America will continue to perform strongly in 2022 as the US domestic market returns to pre-crisis trends, and with ongoing improvements in international travel. In 2022, passenger numbers will reach 94 per cent of 2019 levels, and full recovery is expected in 2023 (102 per cent), ahead of other regions.
Africa: Given its slow progress in vaccinating the population, and the impact of the crisis on developing economies, Africa’s passenger traffic prospects are somewhat weaker in the near-term. Passenger numbers to/from/within Africa will recover more gradually than in other regions, reaching 76 per cent of 2019 levels in 2022, surpassing pre-crisis levels only in 2025 (101 per cent).
Middle East: With limited short-haul markets, the Middle East focus on long-haul connectivity through its hubs is expected to result in slower recovery. Passenger numbers to/from/within the Middle East are expected to reach 81 per cent of 2019 levels in 2022, 98 per cent in 2024 and 105 per cent in 2025.
Latin America: Traffic to/from/within Latin America has been relatively resilient during the pandemic and is forecast to see a strong 2022, with limited travel restrictions and dynamic passenger flows within the region and to/from North America. 2019 passenger numbers are forecast to be surpassed in 2023 for Central America (102 per cent), followed by South America in 2024 (103 per cent) and the Caribbean in 2025 (101 per cent).
It is important to take note that the forecast does not calculate the impact of the Russia-Ukraine conflict. In general, air transport was resilient against shocks at the time of the forecast and the association had anticipated then that the conflict is unlikely to impact the long-term growth of air transport. However, it is too early to estimate what the near-term consequences will be for aviation, but it is clear that there are downside risks, in particular in markets with exposure to the conflict. IATA noted the sensitivity factors would include the geographic extent, severity, and time-period for sanctions and/or airspace closures.
“These impacts would be felt most severely in Russia, Ukraine and neighboring areas. Pre-COVID-19, Russia was the 11th largest market for air transport services in terms of passenger numbers, including its large domestic market. Ukraine ranked 48. The impact on airline costs as a result of fluctuations in energy prices or rerouting to avoid Russian airspace could have broader implications. Consumer confidence and economic activity are also likely to be impacted even outside of Eastern Europe,” IATA stated.