Global aviation traffic will return to pre-pandemic levels by June, according to an analysis by Dublin-based aircraft leasing firm Avolon.
Following a 70% recovery in passenger traffic last year led by recovery in Europe and North America, Asia will drive growth this year, helped by the recent reopening in China, the report states. For every two seats of airline capacity added in the world today, one is in Asia.
Avolon said that airlines’ financial recovery is ahead of their capacity recovery. The report states: “While air traffic is still 25% below 2019 levels, revenues are just 13% lower as airlines flex their pricing power and raise fares.
Demand for travel is no longer the constraint to recovery, but airlines’ capacity to put planes in the air.
The company also said that while airlines shrunk their owned fleets by 3% since 2019, aircraft leasing firms, the majority of which are based in Ireland, have grown theirs by 17%, and now manage 53% of the global passenger fleet by value.
“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,” said Avolon CEO Andy Cronin.
“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.”
The forecast is backed up by PWC’s analysis in its aviation review and outlook report. PWC said the reopening of China will create a travel surge that will substantially offset the economic headwinds faced in other parts of the world.
A 21% increase in revenue this year, followed by a 17% rise in 2024, will take traffic levels above 2019 levels, they said, which brings forward the recovery horizon by 12 months compared to earlier expectations.
The two reports coincide with two major aviation finance conferences taking place in Dublin this week that will be attended by chief executives from major aircraft lessors Aercap, SMBC, Avolon, and Air Lease, alongside executives from Boeing, Airbus, Ryanair, Air France, and Wizz Air.
Source: Civil Aviation Authority-Qatar