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IATA OPTIMISTIC FOR AIR TRAVEL RECOVERY IN 2022

The International Air Transport Association (IATA) is predicting that global airlines will experience improvements to business in 2022 as this year looks set to be a stronger year for air travel in comparison to 2021.

Airlines remain optimistic about the year ahead, but challenges such as new variants and high jet fuel prices remain.

IATA

The IATA confirmed that the global air travel recovery continued into the year-end as strong demand over the holiday season compensated for the Omicron related disruptions. The
industry-wide revenue passenger-kilometers (RPKs) was still below 45.1% in December 2021 versus December 2019. However, it was an improvement compared to a 47% decline in November 2021 versus November 2019.

Omicron travel restrictions, however, slowed the recovery in international demand by about two weeks in December. International demand has been recovering at a pace of about 4% a month compared to 2019. Without Omicron, the IATA said it would have expected international demand for the month of December to improve to around 56.5% below 2019 levels.

In 2021, global RPKs rose to 41.6% of 2019 levels compared with 34.2% in 2020 as more markets reopened following the success of global vaccination programs vaccination. Global passenger seat capacity (ASKs) recovered to 51.2% of pre-pandemic levels in 2021 and the global passenger load factor was at 67.2% – down 15.4 % compared with 2019.

IATA optimistic for 2022 as demand improves

However, the IATA is relatively optimistic for 2022 as more countries reopen their borders and start to lift or simplify entry rules. The IATA conducted its Business Confident Index in December 2021 and January 2022, asking airline CFOs and heads of cargo for their predictions.

The majority of survey participants reported improving passenger and cargo volumes in the fourth quarter of 2021 compared to the same period of 2020. They also indicated that they expect this trend to continue in the future – notably on the passenger side of the business. Eighty-three percent of respondents stated that their income increased (or losses diminished) compared with the same period a year ago. The improvement was driven by the gradual recovery in passenger traffic as travel restrictions were eased, and by strong cargo demand combined with elevated cargo yields.

Looking ahead, the survey suggests that the bottom-line figures will continue to improve, although the optimism is somewhat weaker compared with the previous quarter due to the rise of jet fuel and the impact of the Omicron variant. However, the share of respondents who expect higher incomes reached 59%. Prices would continue to be under pressure due to increased competition.

Increase in passengers and rise in recruitment

IATA OPTIMISTIC FOR AIR TRAVEL RECOVERY IN 2022
Reopening borders in 2022 will stimulate passengers demand says IATA (Photo: Jakarta International Airport- LC/Cleverdis)

Almost all respondents (96%) reported an increase in passenger numbers during Q4 compared with the same period a year ago – an improvement from 86% in October and 81% in July. The air travel recovery had been driven by the relaxation of cross-border travel restrictions in some key markets, including the reopening of transatlantic routes in early-November.

The vast majority of survey participants (91%) expect that the recovery in passenger traffic will continue over the next 12 months despite the Omicron outbreak. The remaining respondents assume no change in the current levels. The further relaxation of travel restrictions and more efficient pandemic containment were cited as the key drivers behind the predicted recovery of air travel.

Thanks to recovering passenger operations, the survey also revealed that 59% of respondents expect to see an increase in recruitment over the next twelve months.

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