As part of the analyst’s report for 2021, Cirium’s CEO Jeremy Bowen has given his seven forecasts for the aviation industry for 2022.
He says that the recovery has had its challenges as we continued to tackle fluctuating cases of COVID-19, new variants, and varied vaccinations programs per country.
“International border closures meant that markets with strong domestic travel, such as the US and China, bounced back rapidly. Markets that rely on open borders and the airlines operating in those markets struggled.
“However, there are signs of recovery. international corridors are reopening, such as between the UK and US. While new variants put a damper on some of the pomp and circumstance, the airlines have responded by staying the course, Mr. Bowen said.
But he warns “we are far from being out of the woods, but we know that the global recovery will be moving in an upward direction this year. At Cirium, we look to what to expect this year and beyond—working closely with the industry to anticipate the future scenarios. Here are seven key things to consider for 2022.”
Here are Cirium’s seven things to look for in 2022
- Worldwide domestic passenger traffic will be back to pre-pandemic levels; international traffic will reach two-thirds
We are steadily seeing more passengers return to the skies as the number of fully vaccinated people increases across many countries and the subsequent easing of travel restrictions. By September 2021, domestic traffic (as measured in passenger numbers) had improved and was down only 36% compared to 2019, led by improvements in North America and Russia.
- Passenger fleet in-service will almost return to pre-pandemic levels
The Cirium consultancy team, Ascend by Cirium, project that the global passenger fleet in service will increase to 20,700 by the end of 2022. This is only a few hundred fewer than at the end of 2019. By the end of 2021, almost 17,000 passenger aircraft are projected to be in service. Airbus and Boeing are expected to deliver over 1,400 new aircraft in 2022 and almost 1,600 in 2023. The current parked fleet of some 4,800 surplus aircraft are expected to continue to decline to around 3,700 by the end of next year. This will reduce further to 2,400 by the end of 2023.
As most markets recover and global passenger traffic exceeds 2019 levels by mid-2023, the excess of passenger jets—which peaked at 14,000 in April 2020—is likely to be fully absorbed back into the fleet. Between 2022 and 2024, we expect roughly 550 aircraft to be retired annually as older, less fuel-efficient excess aircraft are scrapped.
Airlines are emerging from the crisis with a restructured fleet, with next-generation planes burning 15% less fuel than the older planes they replaced. This includes nearly 9,600 new generation single-aisle aircraft and 1,600 new generation twin-aisle aircraft scheduled for delivery through the 2020s and 2030s.
- Business travel will accelerate in 2022, steered by a rise in business events and meetings
As vaccines are being rolled out globally and economies recover, organizations have already increased their business travel spending. According to the Global Business Travel Association (GBTA), business travel spending is projected to have increased by 21% in 2021, on the back of the easing of restrictions on international travel. For example, in March 2021 there were 217,100 international flights tracked compared to 542,300 in October—1.5 times more international flights taking place
- Conversions of passenger jets to freighters will surpass previous highs
The air cargo market continues to grow and has had a strong year in 2021. Traffic (calculated by Freight Tonne Kilometers) are up over 8% for the first nine months of 2021, compared to 2019. Capacity however is down almost 12% for this year, which reflects the continuing lack of passenger belly capacity.
- We’ve reached the bottom of aircraft values, but some aircraft remain on watch
Aircraft values and lease rates took an unprecedented hit in the 12 months from April 2020 to March 2021. From April to September 2021, the values and lease rates for many types appear to have stabilized, and a few are improving
- Airlines will rely more on partnerships to carry passengers into partner home markets
We anticipate a shift in airlines flying secondary markets post-pandemic and instead see airlines taking advantage of their partners to transport passengers to secondary cities.
- CO2 emissions will increase as flights increasingly return to service—but airlines now have cleaner fleets
As fewer flights operated in 2021— flights tracked from January 1 to October 31, 2021, are 29% down versus 2019—the CO2 emissions from flights were 40% less than pre-pandemic. Although the trend seen in 2021 shows fuel burn increase as domestic flights started to return, it is lower because airlines are flying their aircraft far fewer hours and prioritizing more efficient aircraft.
The proportionally greater decline in emissions was also because of long- haul international markets taking longer to recover than domestic and intra- regional. This reduced the average aircraft size being flown and the flight distance, while airspace and airports were less congested, resulting in less time spent in take-off queues and holding patterns.
OEMs are already increasing manufacturing rates for the next generation of aircraft that will enter service. As markets recover, overall CO2 emissions are likely to rise; but, as more efficient aircraft are introduced, the fleet is expected to yield average per-seat efficiency gains of several percentage points when compared to pre-pandemic levels.
To meet the net-zero 2050 targets, the aviation sector will focus more on determining the real fuel use of flights, as well as Sustainable Aviation Fuels and offsets. We anticipate that talks on hydrogen and electric aircraft will continue, though these technologies will play a much smaller role in meeting these goals.
