Post-Pandemic Air Travel

Post-Pandemic Air Travel

What is the state of post-pandemic air travel?

Policy reaction to the pandemic, which entailed lockdowns and only allowing people out to buy their necessities had a devastating impact on many industries. However, some industries were worse impacted than others. Hospitality and air travel experienced the worst downturn in their history. 

The aviation industry, as a whole, suffered an estimated $370 billion loss in global revenue because of policy reaction to COVID-19. 

Fast forward, and what is the state of post-pandemic air travel?

Post-pandemic air travel has gradually recovered from the trough, but flight passenger traffic has yet to bounce back fully. 

After an incredibly difficult 2020, the airline industry saw significant improvements in travel frequency. But compared to pre-pandemic levels, there is still a lot of ground to cover.

For example, in 2021, overall passenger numbers only reached 47% of 2019 levels. 

Domestic air travel recovered quicker in the post-pandemic air travel era.

The pickup in passenger numbers was primarily driven by domestic travel, with international passenger numbers only reaching 27% of pre-COVID levels.

From a regional perspective, Central America experienced one of the fastest recoveries. In 2021, overall passenger numbers in the region had reached 72% of 2019 levels, and they are projected to reach 96% at the end of 2022.

The Americas was the region that bounced back the quickest in the post-pandemic air travel era

The Americas as a whole have seen a quick recovery. North America and South America reached above 50% of 2019 ridership in 2021, and are projected to reach 94% and 88% of ridership in 2022, respectively.

Asia was the region which is lagging in the post-pandemic air travel era

The Asia Pacific has experienced the slowest recovery. Perhaps the reason for this is due to stricter lockdowns and travel restrictions put into effect in this region. Moreover, Asia was the worst affected during the SARS in 2003), especially in China Shanghai. China’s zero covid policy, which was later ditched in December, hit Asian air travel the worst. 

What does post-pandemic air travel look like for 2023 and beyond?

Air travel recovery is different for each region, but airlines are largely expected to see a full recovery to their ridership levels by 2025.

China’s decision to abandon the zero covid policy could positively impact air travel in Asia. 

So the future for post-pandemic air travel appears promising. 

However, investors need to take into consideration other factors.

Geopolitics, the ongoing Russia-Ukraine war, is one such concern, which could have a far-reaching impact on the global economy and the future of air travel. 

As I write this piece an FAA system outage has caused thousands of flight cancellations across the US.

FlightAware, which tracks delays and cancellations, showed more than 9,500 flights to, from, and within the US as being delayed and more than 1,300 flights cancelled.

There is always a wildcard to disrupt post-pandemic air travel. Investors beware.