Global air travel is anticipated to surpass pre-Covid levels by 2024, marking a significant recovery for the industry, according to experts. The Asia-Pacific region is expected to play a pivotal role in driving this recovery, with sustained demand potentially leading to a profitable year for airlines.
After experiencing record losses during the Covid-19 pandemic, the aviation industry witnessed a remarkable rebound in 2022 and 2023, nearly reaching 2019 levels. However, there are still obstacles to overcome, including persistent supply issues and slim profit margins.
Subhas Menon, director-general of the Association of Asia Pacific Airlines (Aapa), expressed confidence in a complete air travel recovery by 2024. The International Air Transport Association (Iata) projects that airlines will generate profits of $25.7 billion in 2024, supported by a record-breaking $964 billion in revenue.
While all regions are expected to reach pre-pandemic passenger levels by the end of 2023, the Asia-Pacific region is slated for full recovery in early 2024. In 2023, global revenue passenger kilometers (RPK) are projected to increase by 38.4% compared to 2022, still falling short by 4.8% compared to 2019. RPK is a key indicator of passenger demand and airline performance. Iata foresees a 9.8% growth in RPK in 2024, surpassing 2019 levels by 4.5%.
Based on these projections, it is anticipated that there will be approximately 4.7 billion air passengers in 2024, a 9% increase compared to 2019. Observers believe that the strong performance in 2023 sets a positive tone for the coming year.
Manfred Seah, chief financial officer at aviation gateway services provider Sats, expressed encouragement by the global passenger travel recovery despite macroeconomic uncertainties and the current geopolitical situation.
Subhas Menon of Aapa highlighted a growing trend of discretionary spending on services such as food and beverage, entertainment, and tourism rather than material goods. He believes this trend will continue in 2024.
Bertrand Saillet, managing director for travel management company FCM Travel Asia, noted that rising demand has led to increased airfares in Asia. Economy-class fares in the region have risen by 21% compared to 2019, while business-class fares have seen a 17% increase.
FCM Travel Asia also reported an increase in corporate travel bookings in November 2023 compared to the previous year and expects travel demand to continue growing in 2024.
In addition to increasing demand, the global economy is expected to display resilience. Andrew Matters, Iata’s director for policy and economics, highlighted the International Monetary Fund’s projection of a 3% global gross domestic product growth in 2024 and robust labor markets, with many countries experiencing record low unemployment rates.
Matters emphasized that pent-up demand and the ability of people to afford air travel contribute to the optimistic outlook for the industry.
The expected recovery of global air travel in 2024 represents a significant milestone for the aviation industry. With Asia-Pacific leading the way and sustained demand driving profits, the sector is poised for a strong comeback. Despite ongoing challenges, industry experts remain optimistic about the future and anticipate continued growth in the years to come.
