The State of Aviation — Worldwide Travel Outlook

Despite turbulent times, the aviation industry is positioned to take off in 2022. As countries around the globe transition from total border closures to measures that focus on vaccinations and testing, the travel industry is experiencing a revival.

According to IATA, the worldwide domestic travel recovery will reach 100% of 2019 in the fourth quarter of 2022. However, the International recovery will only reach about 50%. Overall industry recovery will achieve 70% by the fourth quarter of 2022. However, recent developments in the Ukraine might slow some of this anticipated recovery due to restrictions over air space.

Based on these trends, our updated air travel outlook for 2022 includes:

• Global airline revenues for cargo and passenger forecasts will climb back to 79% of 2019 levels, when the global airline industry generated a net profit of $25.9 billion.

• The North Atlantic to and from the UK, European Union and much of the Middle East should return to 2019 levels in the summer of 2022, driven by strong leisure (vacation) demand.

• While the omicron variant outbreak in the United States initially reduced demand for travel from the United States to India, airlines are indicating that future demand is strong and are adding service.

• Travel between the Americas should also return to 2019 levels in the summer of 2022. While vaccination rates continue to increase, countries in Central and South America do not have highly restrictive border controls and are not expected to impose them.

• Travel across the Pacific will take longer to return. Important markets such as China, Japan and South Korea limit travel to “essential reasons”. China and Japan limit travel to returning nationals, foreigners with residency permits and diplomats.

• Travel to countries with low vaccination rates will not likely return until 2023. While the worldwide vaccination rate continues to climb, distribution of vaccines continues to be uneven. This status applies to the entire continent of Africa and many countries in Southeast Asia, such as Pakistan, Bangladesh, Indonesia and the Philippines.

• The return of business travel may be slower as some business interactions, such as internal company meetings, will remain on-line. By summer of 2022, most airlines will have worked through their staff shortages and should be able to operate their entire aircraft fleets.

• Air cargo volumes are expected to keep this higher volume of cargo through 2022 and beyond.

• The chaotic situation in Ukraine and its subsequent effects on the world economy is evolving rapidly. Making predictions about an end state of new economic relationships and airspace restrictions remains difficult. However, many of the scenarios under consideration show a new air travel environment that looks much like what existed during the Cold War (1945-1989).