The global aviation industry in 2022 charted a flight path to recovery from the Covid-19 pandemic, the worst crisis in its history, with a boom in air travel demand and sky-high airfares as restrictions eased.

Airlines, airports and aerospace companies started hiring at record rates, adding capacity, resuming routes, repairing balance sheets and — for some ? returning to the black after nearly three years of withered earnings.

But the industry now faces tough macroeconomic and geopolitical headwinds that are raising questions on the longevity of the travel boom and the strength of the industry’s recovery.

Multidecade record inflation in Western economies, rising interest rates, unfavourable currency swings, higher jet fuel prices and supply chain woes delaying aircraft deliveries are among the challenges facing airlines as they emerge from the pandemic.

The uncertainty of the Russia-Ukraine war and China’s continued isolation amid strict Covid policies are additional risks to the outlook.

However, the strong, albeit uneven, recovery is set to continue into 2023 with varying degrees across different world regions, despite these headwinds as travel demand continues to grow and capacity remains constrained, according to industry executives and analysts.

“Broadly, I’m optimistic that seat loads and demand for international travel will hold strong going into 2023. There’s still pent-up travel demand, and capacity isn’t back to pre-pandemic levels yet,” Tim Clark, Emirates airline’s president, told The National.

“Plus, there are signs that China, the last major consumer market, is finally reopening. That will also drive demand. For aviation, the theme of recovery will continue in 2023.”

Factors such as inflationary pressures, high energy prices and a strong US dollar do impact the cost of business and could potentially dampen consumer confidence and travel spending, Mr Clark said.

“Like everyone else, Emirates is keeping a close eye on costs and working closely with our suppliers. We’re also ensuring that we continue to attract and retain customers, by offering value for money and great travel experiences,” he said.

While economists predict an economic recession in 2023, or at least tough times for businesses, economies and consumers, Mr Clark says there is still reason for optimism next year.

“No matter what, there will always be bright spots and opportunities somewhere … The highs and lows of currencies, interest rates, and energy prices will hurt some, and will benefit some,” he said.

Emirates’ global network and agile business model will help the airline reach the “the right markets with the right product mix and offer”, while tapping into the advantages of being based in Dubai, Mr Clark said.

“Dubai and the UAE’s progressive policies, investments, and overall stability are a potent force which will continue attracting businesses, tourists, and trade flows in 2023 and beyond,” he said.

Emirates is preparing to introduce the Airbus A350, a new aircraft type to its fleet mix, with preparation ongoing to take the first delivery of the wide-body jet in mid-2024.

“Preparations are well under way to ensure a smooth entry into service, from training to product development,” Mr Clark said.

“We’ve already completed the cabin design work, with the first Emirates A350 aircraft expected to go into production in early 2023. More details will be unveiled as we get closer to our A350 service launch,” he added.

The airline is “working hard” to return all of its aircraft into service next year, bringing back capacity and the route network to pre-pandemic levels in 2023, he said.

Under a massive $2 billion cabin refresh and retrofit programme for 120 of its existing aircraft that began in November, the first of these newly refurbished jets will roll out of the Emirates Engineering Centre and enter service in January.

Source: Civil Aviation Authority-Qatar