The growth in air travel demand is continuing, reports The International Air Transport Association (IATA), sharing its May 2023 traffic data.
Total traffic in May (measured in revenue passenger kilometers or RPKs) rose 39.1 per cent compared to May of last year (which, in some parts of the world, was a period still marred by travel restrictions).
Globally, traffic is now at 96.1 per cent of May 2019 levels. As well, domestic traffic for May rose 36.4 per cent compared to the year-ago period, IATA says.
Total May 2023 domestic traffic was 5.3 per cent above the May 2019 level.
“This is the second month in a row domestic traffic has exceeded pre-pandemic levels,” IATA notes.
International traffic climbed 40.9 per cent versus May 2022 with all markets recording strong growth, led once again by carriers in the Asia-Pacific region, the association says.
International RPKs reached 90.8% of May 2019 levels, with Middle East and North American airlines exceeding pre-pandemic levels.
The total industry load factor rose to 81.8 per cent, led by North American carriers at 86.3 per cent.
“We saw more good news in May. Planes were full, with the average load factors reaching 81.8 per cent,” said Willie Walsh, IATA’s Director General. “Domestic markets reported growth on pre-pandemic levels. And, heading into the busy northern summer travel season, international demand reached 90.8 per cent of pre-pandemic levels.”
The bottom line
The bottom line of it all is that “people need and love to fly,” Walsh said.
“The strong demand for travel is one element supporting a return to profitability by airlines,” he said. “In 2023, we expect airlines globally to post a $9.8 billion net profit. It’s an impressive number, particularly after huge pandemic losses. But a 1.2 per cent average net profit margin is just $2.25 per departing passenger. As a return, that is not sustainable in the long-term.”
It also appears that while the pandemic has changed many things in aviation, it has not righted aviation’s “famously unbalanced value chain,” the director added.
“The latest indication came last week as European airports announced a EUR 6.4 billion ($7 billion) collective profit in 2022,” he said. “In comparison, IATA estimates that European airlines made a $4.1 billion profit for the same year.”
“We don’t begrudge any business hard-earned profits. But this does raise an interesting question. Is airport economic regulation effectively defending the public interest when a monopoly supplier (airports) can generate seemingly much healthier returns than the competitive businesses (airlines) they supply?”
“Governments should at least take a look.”