Global travel demand continues to recover, despite economic and geopolitical uncertainties

Forward bookings indicate 'optimistic' outlook for international and domestic passenger traffic for the coming months, Iata says

Travellers queue at bag drop for Scandinavian Airlines at Copenhagen Airport in Denmark. Reuters

Global passenger demand for air travel remained strong in September, with both domestic and international traffic increasing, despite macroeconomic headwinds and geopolitical instability, the International Air Transport Association said.

Total traffic in September, measured in revenue passenger kilometres, grew 57 per cent compared to the same month in 2021, Iata's monthly report showed.

Globally, traffic is now at 73.8 per cent of September 2019 levels, before the Covid-19 pandemic, said the report, which was released on Monday.

“Even with economic and geopolitical uncertainties, the demand for air transport continues to recover ground,” said Willie Walsh, Iata's director general.

“The outlier is still China, with its pursuit of a zero-Covid strategy keeping borders largely closed.”

Airlines' domestic traffic for September was up 6.9 per cent compared to the year-ago period. Total September 2022 domestic traffic was at 81 per cent of pre-Covid levels.

International traffic climbed 122.2 per cent compared with September 2021, reaching 69.9 per cent of September 2019 levels. All markets reported strong growth, led by Asia-Pacific.

“Asia-Pacific, which, despite China’s dismal performance, posted a 464.8 per cent increase for international traffic compared to the year-ago period,” Mr Walsh said.

Airlines in the Middle East recorded a 149.7 per cent year-on-year rise in traffic in September. International traffic now sits 16.8 per cent below pre-Covid figures.

Capacity in September increased 63.5 per cent from the year-ago period. Load factors, a measure of how well airlines fill available seats, climbed 27.6 percentage points to 80 per cent.

“Seasonally adjusted traffic figures continue to suggest a strong upwards trend, while traffic between the Middle East and North America and Europe continue to outperform,” Iata said.

For airlines based in Africa, September was another month of steady recovery, with 90.5 per cent year-on-year growth in traffic, the report said.

Forward bookings are looking “resilient” globally, with a recovery in international bookings closing in on domestic levels, Iata said.

“Overall, forward bookings continue to give an optimistic outlook despite the macroeconomic pressures on the industry and passengers,” it said.

The lifting of travel restrictions in Asia-Pacific has been met positively by consumers, with international bookings to key tourist destinations in the region increasing as a result, Iata said.

However, domestic bookings in the region have not seen broad changes in September, apart from the renewed restrictions in China.

“While demand for domestic travel globally has been resilient, bookings have been largely trending sideways in recent months. As a result, international bookings closed in once again on domestic as demand for international travel is enabled by easier travel policies,” Iata said.

Strong demand is helping the industry cope with high fuel prices, but travellers want simpler and more convenient procedures after nearly three years of travel complexity due to the pandemic, Mr Walsh said.

On the other hand, global air cargo demand softened in September, with volumes below the “exceptional performance” of 2021 as major economies contract and new export orders drop, Iata said.

Global freight demand, measured in cargo tonne-kilometres, fell 10.6 per cent compared to September 2021 but continued to track at near pre-pandemic levels.

Capacity was 2.4 per cent above September 2021 but still 7.4 per cent below September 2019 levels.

“At the consumer level, with travel restrictions lifting post-pandemic, people are likely to spend more on vacation travel and less on e-commerce. And at the macro level, increasing recession warnings are likely to have a negative impact on the global flows of goods and services, balanced slightly by a stabilisation of oil prices,” Mr Walsh said.

“Against this backdrop, air cargo is bearing up well,” he added, noting that a slowdown in capacity growth shows the flexibility the industry has in adjusting to economic developments.