Travel has experienced a tumultuous time in the last two years and the latest airline statistics and airport data reflect this. In a nutshell:
- The number of air passengers worldwide is now a billion
- Revenue from air passenger traffic after the Covid outbreak is an estimated $189 billion
- $370bn was the estimated revenue loss of airlines worldwide due to Covid
- Despite a rise of 27% in 2021 airline revenues remained 44% lower than 2019 levels
- Freight forwarders and cargo airlines retained profits of $5 billion, on average from 2012 to 2019 when their profit margins were around 3%
- Catering and ground service company’s losses amounted to $2.4 billion and $3.2 billion – these were the lowest losses in the sector
While there is no doubt that the airline industry took a gargantuan knock following the advent of the pandemic, experts and industry analysts are cautiously optimistic for a slow and gradual recovery.
The International Air Transport Association (IATA) gauges that while global airlines’ revenue increased by 27% in 2021 compared to 2020, revenues remained 44% lower than 2019 levels.
The global airline industry remains exposed to external factors beyond its control. These factors include ever-rising fuel and maintenance costs and fallout from geo-political conflicts and the financial markets. Many carriers have been operating at a loss since the 2008 financial crisis.
Airport Data and ANSPs Stats
Airports and air navigation service providers (ANSPs) have perennially been profitable. Globally, airports generated annual aggregate economic profits of $5 billion, on average, from 2012 to 2019, when their profit margins were around 3%.
Asia-Pacific airports performed well during this time due to favourable regulatory frameworks and high demand thanks to larger populations.
As the air navigation service providers that manage safe air traffic at airports are often government-run, they have fixed high costs such as the infrastructure they use and highly trained staff demanding high salaries.
Airports and ANSPs did manage to retain small profits during the pandemic, but revenues are linked to aircraft movements. Airline data shows that big losses were incurred during the hard lock-downs of 2020/21.
Freight Forwarders And Cargo Airlines Held Their Ground
Other sub-sectors in the aviation industry such as cargo and freight carriers and the private aviation industry weathered the pandemic restriction, not without difficulty, but weathered it they did.
Operations remained stable with annual profits averaging $2 billion from 2012 to 2019. The bigger companies such as Expeditors and Kuehne+Nagel, showed fairly impressive profit margins. The revenue generated by cargo airlines grew substantially during the pandemic to $175 billion in 2021.
Many benefited from the humanitarian need of moving protective personal equipment (PPE) and medications around the globe. But with the pandemic receding as vaccination spreads, analysts are expecting cargo yields to decrease.
Catering, Ground Services, And MRO Providers
This sub-sector fared better because they have lower fixed costs and their workers are often contracted rather than full time. These companies offset the losses during the pandemic.
It is estimated that catering and ground service losses amounted to $2.4 billion and $3.2 billion, respectively, the lowest losses in the sector.
So what of the future outlook for the airline industry?
Flying Stats Forecast A Steady Global Recovery
Government-owned carriers are placing all their eggs in the Covid-19 vaccinations basket in 2022. Flight cancellations due to virus variants such as Omicron are decreasing. This has led to cautious optimism by industry analysts with many believing a recovery to pre-pandemic levels of global traffic by 2023-24 just may be achievable.
Regionally the North Atlantic and internal flights around Europe are on an upward curve. But demand in Asia remained hobbled by strict health restrictions in China due to a resurgence in Coronavirus infections.
Since February 2022, geopolitical factors such as the Russian invasion of Ukraine have entered the world aviation arena. Russia leases a lot of commercial planes. Sanctions targeting the Russian aviation sector dictate that Western aircraft leases be terminated by 28 March 2022. Several Russian airlines, including Aeroflot and S7, have stopped international flights to avoid the seizure of their aeroplanes.
Pent-up demand in Europe has seen a jump in levels of air traffic in 2022. For example, Ryanair flew more passengers in March 2022 than in pre-pandemic times. Data from IATA shows that Europe’s recovery continues to grow steadily but industry watchers have warned that air carriers remain vulnerable to new virus variants detected in populations.
But the outlook for long-haul flights to Asia looks constrained and will continue to follow this trend, possibly for the rest of 2022.
The Ukraine war and its consequence of a worldwide energy crisis remain a concern and an unstable factor.
Outlook For 2022 And The Future Of Flight Statistics
In an interview with Flightglobal.com Willie Walsh who headed Aer Lingus, British Airways and IAG, (the eventual amalgamation of the two), admitted they never anticipated governments would shut borders.
Following his joining of the IATA, he stated the only way to start recovery was being able to fly internationally, as the scenario at the time showed that closing borders did not impact the pandemic’s spread.
As he predicts there will be other future viruses, but Walsh maintains that as capacity is back at 85%, he is confident for the future.
While China is not always guaranteed, given the authoritarian nature of the government, the war in Ukraine is still a worry but the big worry, in his view, is around higher fuel costs.
But all eyes are on the IATA AGM in June 2022, which has been moved from China to Doha.
Airline Industry And Climate Change Concerns Affect Airport Passengers
As climate change concerns and the carbon footprint of air passenger flights are on everyone’s agenda, Walsh stated regulators have to demonstrate real action by achieving net zero CO2 emissions by 2050, and not just by paying lip service to these demands.
But achieving net-zero, though, will not come without a cost, he argued. Achieving net zero CO2 emissions in 2050 will cost money, be it in the form of new aircraft, sustainable aviation fuels or carbon offsetting, he said.
Airport Data Under Review – Where To For Airlines?
All in all, like our world since the advent of Covid-19, change is afoot. We no longer view anything in the same light as we did in 2019.
Airlines are adopting reshaped fleets, in which aircraft have 15% better fuel burn than older less efficient aircraft from before. According to Airlineratings.com, some 9,600 new generation single-aisle and 1,600 new generation twin-aisle aircraft are due for delivery from 2022 to the 2030s.
With the opening up of the world, business travel will ramp up with the reintroduction of business meetings, conferences and events.
This all bodes well for the airline industry to make a slow but steady recovery from 2022 onwards.