Flight Bookings Are Climbing, Governments Need to Get Ready

28 May 2021

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The International Air Transport Association (IATA) is forecasting that global passenger levels will exceed pre-Covid levels in 2023, after climbing through the 52% mark this year and 88% level in 2022.

The International Air Transport Association (IATA) and Tourism Economics released a long-term view for post-Covid-19 passenger demand recovery, which demonstrates that people remain eager to travel in the short and long-term. To ensure that aviation can sustainably deliver its social and economic benefits as it meets this long-term demand, it is critical that governments step-up their support for more efficient operations and foster an effective energy transition.

By 2030, global passenger numbers are expected to have grown to 5.6 billion. That would be 7% below the pre-Covid-19 forecast and an estimated loss of 2-3 years of growth due to Covid-19.

“This should be a clarion call to governments to get ready,” said Willie Walsh, IATA’s Director General. “The travel and tourism sector is a major contributor to GDP. People’s livelihoods are at stake. To avoid greater long-term economic and social damage, restart must not be delayed. Governments can facilitate a safe restart with policies that enable restriction-free travel for vaccinated people, and testing alternatives for those unable to be vaccinated. Governments must also be ready with processes to digitally manage the vaccine or test certificates - ensuring that a safe restart is also efficient”, said Walsh.

Beyond 2030, air travel is expected to slow, due to weaker demographics and a baseline assumption of limited market liberalisation, giving average annual growth between 2019 and 2039 of 3.2%. IATA’s pre-Covid-19 growth forecast for this period was 3.8%.

The recovery in passenger numbers is slightly stronger than the recovery in demand measured in revenue passenger kilometres (RPKs), which is expected to grow by an annual average of 3% between 2019 and 2039. This is owing to the expected strength of domestic markets like China with large passenger numbers and shorter distances.

During the Great Recession a dozen years ago, smaller communities in the US lost aircraft departures at a rate five times greater than losses at larger airports. How does Covid-19 compare? Find out in  What’s Next for US Regionals?

“I am always optimistic about aviation", said Walsh. "We are in the deepest and gravest crisis in our history. But the rapidly growing vaccinated population and advancements in testing will return the freedom to fly in the months ahead. And when that happens, people are going to want to travel".

"The immediate challenge is to reopen borders, eliminate quarantine measures and digitally manage vaccination/testing certificates. At the same time, we must assure the world that aviation’s long-term growth prospects are supported with an unwavering commitment to sustainability. Both challenges require governments and industry to work in partnership. Aviation is ready. But I don’t see governments moving fast enough”.

The damage of the Covid-19 crisis will be felt for years to come, but all indications are that people have retained their need and desire to travel. The economy is strong and can fuel growth in travel. This February, industrial production levels stood at 2% above February 2019 levels. Consumers have accumulated savings in the lockdowns, in some cases exceeding 10% of GDP. In addition, vaccination rates in developed countries (with the notable exception of Japan) should exceed 50% of the population by the third quarter of 2021.

Any possibility for borders to re-open is met with an instant surge in bookings. The most recent example is the 100-percentage point spike in bookings from the UK to Portugal when the UK’s “Green List” was announced in early May.

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