London Heathrow Airport
The global aviation industry is recovering after a three-year stumble due to the fallout from the coronavirus pandemic and record fuel price increases due to the closure of borders between countries and the war in Ukraine.
Economists and travel experts have confirmed that, despite high airfares, bookings for flights this summer appear to be full for most airlines, particularly European carriers, as people place a greater emphasis on travel, painting a picture of the industry’s transition to profitability. A hopeful picture was created in those days.
The aviation industry is one of the sectors of the economy hardest hit by the coronavirus, accounting for roughly 10% of the total global economic loss due to the pandemic, which is estimated to be worth more than $21 trillion.
The airline industry will return to profitability in 2023, the International Air Transport Association (IATA) said, with air traffic continuing to recover after more than two years of Covid 19-related restrictions, with a projected net profit of $4.7 billion and more than 400 million passengers recorded .
Global air travel data for February 2023 reinforces these expectations, confirming the industry’s continued recovery and increased travel rates this year, as IATA announced that February’s total air travel (measured by revenue per kilometer) compared to February 2022. Compared with the month, it increased by 55.5%.
Globally, total passenger traffic reached 84.9% compared to levels recorded before the Covid-19 pandemic in 2019.
The end of summer shows the power of recovery
Economist Ali Hammoudi confirmed in an interview with Sky News Arab Economics that “the entire airline industry is estimated to have lost more than $370 billion in global revenue due to the pandemic, and this year’s indicators paint a hopeful picture. With The recovery of air travel, the aviation sector turned profitable.” Starting from the bottom, but air passenger traffic has not yet fully recovered to pre-epidemic levels, airlines are expected to record a small net profit of US$4.7 billion in 2023. Net profit margin is 0.6 % for the first time since 2019, but we’ll have to wait until the end of the summer to see how strong the recovery is. “
What the pandemic has taught people how to be flexible when traveling
Another important point that must be mentioned is that the epidemic has taught people how to be flexible in travel, just like before, once a person made a travel plan, he would stick to it because the epidemic prompted them to travel. Exploring new outdoor activities, driving while traveling, making more flexible plans, and taking short trips all help them become more active travelers, Hammoudi said, and he expects airlines to benefit from the pattern of tourists returning , as travel demand continued to rise in the wake of the pandemic and in light of the Ukraine crisis last January, supported by China easing restrictions on flights.
Economist Hamoudi added: “On the other hand, the aviation industry is very sensitive to any rise in fuel costs, a downturn in the overall economy, and a decline in consumer purchasing power, as many economies around the world are going through crises related to the cost of living, Given these factors, the industry’s performance is expected to remain strong and challenging in the second half of 2023.
Flights return to pre-pandemic levels
As far as travel and tourism consultant Riyad Al-Faisal is concerned, he said: “There are some signs that the aviation industry is starting to recover in many parts of the world, with significant increases in travel, particularly in countries in Asia, Europe and the Middle East. Travel activity in 2019 increased significantly and increased during the summer.” Flights are back to pre-pandemic levels of normal and passengers on their lines after most airlines took strict measures to ensure crew safety, but it must be remembered , these indicators are not permanent, as in some regions the situation may change at any time due to the epidemic or political and security conditions”.
However, we cannot fully judge the recovery of the global aviation industry, because the epidemic is still affecting some countries in the world and reducing travel, and the forced closure has restricted movement and freedom of travel in some areas, which are relatively few , such as some cities and regions in China, especially Hubei Province, which were the epicenter of the virus outbreak at the beginning of the crisis, and some regions in Italy, especially Lombardy, which was the region of the world with a large virus outbreak in the early crisis , and some cities in Spain, notably Madrid, have the highest number of cases. Al-Faisal said some areas in Iran, notably Qom province, which was the first region in Iran to experience an outbreak of the virus, and New York state, the epicenter of the virus outbreak in the United States of America.
Travel and tourism consultant Al-Faisal underestimated the significant impact of the war in Ukraine on the aviation industry as a whole.
People pay more attention to travel
In turn, travel expert Walid Al-Awa explained that with the pandemic receding and the war in Ukraine more than a year past, people’s desire to travel has become more important, so much so that the global airline and hotel industries are witnessing high demand, This is evidenced by the high growth of tourism from China to all over the world, but on the other hand, Al-Awa pointed out that not all countries are safe, as the countries with growing demand for tourism are only countries with strong economies, such as European countries and some Asian countries.
According to Awa, with the onset of the war in Ukraine, there was a marked increase in travel from Eastern Europe, and contrary to expectations, they traveled to or lived in safe countries.
Need to book flights to avoid price hikes
Travel expert Al-Awa continued: “It is clear that the global tourism industry is recovering, especially during the summer months, as most airlines are witnessing full bookings, even those looking to travel for the upcoming holidays from IATA (IATA) predicts that air ticket bookings will be faster during the epidemic to avoid high prices, while some famous tourist countries such as Spain and Italy will have strong demand for air ticket and hotel booking. By 2023, the number of global inbound tourists will increase by 30%.
European aviation industry recovers to 83% of pre-coronavirus levels