Global air travel will finally surpass pre-Covid levels in 2024, experts say

SINGAPORE – Global air travel volume is expected to finally exceed pre-Covid levels in 2024 as the Asia-Pacific region makes a full recovery, said industry observers. Driven by sustained demand, this could make 2024 a banner year for airline profits.

The industry made a dramatic recovery in 2022 and 2023, bouncing back from record Covid-era losses to near-2019 levels.

However, persistent supply issues and thin profit margins are among the obstacles to aviation’s strong showing.

Full global recovery

“In 2024, air travel recovery will be complete,” said Subhas Menon, director-general of the Association of Asia Pacific Airlines (Aapa).

The International Air Transport Association (Iata) forecasts that in 2024, airlines will make US$25.7 billion (S$34 billion) in profits, on the back of a record US$964 billion in revenue.

It expects all regions to hit pre-pandemic passenger levels by end-2023 – except for Asia-Pacific, where full recovery is anticipated in early 2024.

For 2023, global revenue passenger kilometres (RPK) are expected to be 38.4 per cent higher than 2022, but still 4.8 per cent short compared to 2019.

Defined as kilometres travelled by paying passengers, this is a key indicator of passenger demand and airline performance. Iata expects RPK to grow 9.8 per cent in 2024, rising to 4.5 per cent above 2019 levels.

All this is based on a projected 4.7 billion air passengers in 2024, 9 per cent more than the 4.5 billion in 2019.

Promising demand

The strong performance in 2023 bodes well for the coming year, said observers.

Manfred Seah, chief financial officer at aviation gateway services provider Sats, said: “The global passenger travel recovery is encouraging, despite the continuing macroeconomic uncertainties and current geopolitical situation.”

Aapa’s Mr Menon highlighted a trend of discretionary spending going to services such as food and beverage, entertainment and tourism, rather than material goods. He believes that this will continue in 2024.

Bertrand Saillet, managing director for travel management company FCM Travel Asia, noted that rising demand has pushed up airfares in Asia. For the year to date, economy-class fares in the region are up 21 per cent, while business-class fares are 17 per cent higher compared to 2019.

FCM Travel Asia also saw more bookings for corporate travel in November 2023 compared to a year ago, and expects travel demand to continue to grow in 2024.

Economic resilience, too, should continue. Andrew Matters, Iata’s director for policy and economics, highlighted the International Monetary Fund’s projections for global gross domestic product growth of 3 per cent in 2024 and “robust” labour markets, with unemployment rates in many countries at or near record lows.

“I think it’s very clear that there’s pent-up demand, people want to travel,” he said. Strong labour markets mean that “not only do people want to fly, they have also got the means to fly”.

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