The recovery in passenger travel is continuing to gain momentum, driven by growth in domestic and international trips, but high jet fuel prices will remain a challenge for the airline industry, the head of the International Air Transport Association (Iata) said.
Overall global passenger traffic in July reached 75 per cent of pre-pandemic levels in 2019, with domestic travel at 86.9 per cent of the July 2019 level, as Chinese demand showed strong improvement, the airline industry's largest trade body said on Wednesday.
International traffic reached 67.9 per cent of July 2019 levels, with Asia-Pacific lagging significantly behind other markets.
The industry is "making a solid recovery as we go through the summer season in the Northern Hemisphere", Willie Walsh, Iata's director general, said during an online press conference.
Global airlines have recorded strong forward bookings, with domestic bookings steadying and international bookings accelerating, giving a positive outlook for the industry.
"The recovery is gaining some momentum, we've seen good traffic figures through the peak summer of the Northern Hemisphere, domestic markets now recovering well with the increased activity in Chinese domestic market and we expect this to continue into the August and September figures, given the positive trends we're seeing in forward bookings," Mr Walsh said.
Middle Eastern airlines’ traffic climbed by 193.1 per cent in July compared with the same month in 2021. July capacity rose by 84.1 per cent year-on-year. Load factors, a measure of how well an airline fills available seats, climbed by 30.5 percentage points to 82 per cent.
The global airline industry is broadly expected to recover to pre-pandemic levels by 2024, although there are regional variations where the US is projected to recover by 2023 and China by 2025, said Marie Owens Thomsen, Iata's chief economist.
While Iata maintains a positive outlook for the industry currently, high fuel prices will remain a "challenge" for airlines, the Iata chief said.
Jet fuel prices are "still very elevated" and will continue to put pressure on airlines' cost base for the rest of the year, Mr Walsh said.
"We do see some hedging in the industry, I am aware of some airlines that have embarked on hedging in recent months where they hadn't been previously hedged just to provide themselves with some protection from the volatility that we're witnessing in jet oil prices at the moment," he said.
On the cargo side of the business, airlines recorded a strong performance in July, despite the Ukraine war removing capacity from the market and despite supply chain disruptions, Mr Walsh said.
Global cargo demand, measured in cargo tonne-kilometres, fell by 9.7 per cent in July compared with the same month in 2021, Iata's monthly report showed. Demand stood at 3.5 per cent below July 2019.
Freight capacity was 3.6 per cent above July 2021, but still 7.8 per cent below July 2019 levels, the report said.
Middle Eastern carriers recorded nearly 11 per cent year-on-year decrease in cargo volumes in July.
"Significant benefits from traffic being redirected to avoid flying over Russia failed to materialise and stagnant cargo volumes to and from Europe impacted the region’s performance," Iata said.
Capacity was up by 4.9 per cent compared with July 2021.