Global passenger numbers will only recover to half of pre-pandemic numbers this year, but will exceed them by 2023, according to research released by the International Air Transport Association and Tourism Economics. The optimism for travel recovery is based largely on the “eagerness” of people to travel in both the short and long-term, and their increasing ability to do so because of vaccines, says IATA.
Written by the airline association’s chief economist Brian Pearce, “COVID-19: An Almost Full Recovery of Air Travel in Prospect” also maintains that to ensure that aviation can sustainably deliver its social and economic benefits as it meets this long-term demand, it is critical that governments step-up their support for more efficient operations and foster an effective energy transition.
Forecast highlights include:
• In 2021 global passenger numbers are expected to recover to 52% of pre-COVID-19 levels (2019).
• In 2022 global passenger numbers are expected to recover to 88% of pre-COVID-19 levels.
• In 2023 global passenger numbers are expected to surpass pre-COVID-19 levels (105%).
• By 2030 global passenger numbers are expected to have grown to 5.6 billion. That would be 7% below the pre-COVID-19 forecast and an estimated loss of 2-3 years of growth due to COVID-19.
• Beyond 2030 air travel is expected to slow, due to weaker demographics and a baseline assumption of limited market liberalisation, giving average annual growth between 2019 and 2039 of 3.2%. IATA’s pre-COVID-19 growth forecast for this period was 3.8%.
The recovery in passenger numbers is slightly stronger than the recovery in demand measured in revenue passenger kilometres (RPKs), which is expected to grow by an annual average of 3% between 2019 and 2039. This is owing to the expected strength of domestic markets like China with large passenger numbers and shorter distances.
“I am always optimistic about aviation,” says IATA’s Director General Willie Walsh. “We are in the deepest and gravest crisis in our history, but the rapidly growing vaccinated population and advancements in testing will return the freedom to fly in the months ahead. And when that happens, people are going to want to travel.”
Among the IATA insights:
The damage of the COVID-19 crisis will be felt for years to come, but all indications are that people have retained their need and desire to travel:
• Any possibility for borders to re-open is met with an instant surge in bookings. The most recent example is the 100-percentage point spike in bookings from the UK to Portugal when the UK’s “Green List” was announced in early May.
• The economy is strong and can fuel growth in travel. February 2021 industrial production levels stood at 2% above February 2019 levels.
• Consumers have accumulated savings in the lockdowns, in some cases exceeding 10% of GDP.
• Vaccination rates in developed countries (with the notable exception of Japan) should exceed 50% of the population by the third quarter of 2021.
Citing Oxford Economics data, IATA also points out that many consumers have savings accumulated during the pandemic to spend, with Canada ranked second among top “excess savings” nations at 18% of GDP, and just marginally behind No. 1 Australia.
IATA also forecasts that many top nations will boast 75% population vaccinations –thereby allowing the staged re-opening of air travel – sometime between July and October, with Canada likely to hit the target before August.
“This should be a clarion call to governments to get ready,” says Walsh. “Governments can facilitate a safe restart with policies that enable restriction-free travel for vaccinated people, and testing alternatives for those unable to be vaccinated. Governments must also be ready with processes to digitally manage the vaccine or test certificates—ensuring that a safe restart is also efficient.”