Global aviation continues its recovery to pre-pandemic levels, but Asia-Pacifc is lagging due to travel restrictions in China.
Yesterday, the International Air Transport Association (IATA) released its Air Passenger Market Analysis for August. Looked at globally, the analysis shows an industry bouncing back solidly from the disastrous pandemic years, except for the Asia-Pacific region. The year-on-year numbers are impressive, but by now, it’s more instructive to look at comparisons to 2019 or earlier rather than get carried away with 100%+ growth rates from the same month last year.
IATA’s analysis shows that global revenue passenger kilometers (RPKs) have recovered to 73.7% of pre-pandemic levels, although that did drop 1.6% from July. August global domestic traffic was at 85.4% of 2019 levels, while international traffic lagged, recovering to 67.4%.
Another mention for China’s restrictions
ATA Director General Willie Walsh, formerly the CEO of the International Airlines Group, said that the northern hemisphere peak summer season “finished on a high note” and that considering the “prevailing economic uncertainties,” travel demand is progressing well. He also signaled out Asia for a specific mention, adding,
“The removal or easing of travel restrictions at some key Asian destinations, including Japan, will certainly accelerate the recovery in Asia. The mainland of China is the last major market retaining severe COVID-19 entry restrictions.”
Before the pandemic ravaged global aviation, the Asia-Pacific was making its mark as the industry’s epi-center of growth. Today, it ranks last of six regions in the recovery from COVID-19, based on IATA’s three key metrics; RPKs, available passenger kilometers (ASKs) and passenger load factor (PLF).
Latin America is leading the way on RPKs, having recovered to 89.8% of August 2019 levels, closely followed by North America at 88.1%. Europe is next (81.8%), then the Middle East (75.8%), Africa (73.3%) and Asia-Pacific at 53.3% of 2019 RPKs. The table for ASKs runs North America (90.8%), Latin America (90.7%), Europe (84.5%), the Middle East (78.2%), Africa (73.1%) and Asia-Pacific (60.5%).
Passenger load factors are all within 3% of 2019, except for Asia-Pacific, which is 10% down. Globally the August 2022 PLF was 81.8%, compared to 77.9% in August 2019. Europe had an August 2022 PLF of 86.2%, North America 85.6%, Latin America 82.4%, the Middle East 79.6%, Africa 75.7% and Asia-Pacific 74%.
Brazil is ahead of 2019 capacity
Global capacity (ASKs) is climbing, jumping by 43.6% compared to August last year and now at 77.2% of pre-pandemic levels. Domestically, China and Australia are the two laggards, with China 19.1% and Australia 14.1%, down on August 2019 ASKs. On IATA’s table, the standout is Brazil, which is 2.1% ahead of pre-pandemic levels for domestic capacity. Looking at international capacity, North America has recovered to be operating at 86.5%, well ahead of its nearest rival Europe at 81.9%, with Asia-Pacifc bringing up the rear at 40.1%.
One of aviation’s global barometers is forward bookings, which rose in August after stalling in July. IATA says that in the (northern) spring, domestic and international traffic had around the same shares of global traffic as in 2019. Since then, international bookings have fallen behind domestic, primarily due to the partial reopening of China’s domestic market. IATA’s analysis shows that the introduction and removal of travel restrictions have dictated how the international/domestic gap has fluctuated, with the gap shrinking in August as international booking accelerated.
The report concludes that “forward bookings continue to give a positive outlook and confirm that the willingness to travel is resilient for both domestic and international globally.”
Until China returns to the global aviation scene, total recovery to 2019 levels will not happen, but perhaps the industry will find a new level to measure itself against.
