Air travel is expected to fully recover to pre-pandemic volumes by June of this year, on the back of China finally reopening its borders.
Irish-founded/Chinese-owned aircraft leasing company Avolon has predicted global passenger traffic to be back to pre-Covid levels by the middle of the year, with the aviation sector “set to thrive” driven by rising demand in Asia.
The company said supply side constraints have been the limiting factor for airlines, as opposed to passenger demand.
Demand in Europe and North America drove a 70% recovery in global passenger numbers last year.
Global traffic is currently around 75% of pre-pandemic levels, but has been steadily rising on a monthly basis for some time. A re-opened Asian market is now fully expected to push that recovery even higher.
Avolon also expects the global aviation industry to be back in the black this year, with a combined profit of around $4.7bn expected. This would be a bounce-back from combined sector losses of $180bn in the leanest of the Covid years – 2020 and 2021.
“Aviation has demonstrated its resilience and is ready to thrive having come through a pandemic-driven two-thirds drop in traffic,” according to Avolon chief executive Andy Cronin.
“Airlines, manufacturers, and lessors share an ecosystem that creates opportunities for all but requires collaboration to overcome key challenges including a higher interest rate environment, limited aircraft availability and the need to make further progress on decarbonisation goals.”
“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,” Mr Cronin said.
