Air travel could return to pre-pandemic levels next year despite 10 per cent fare hike – Willie Walsh

IATA Director-General Willie Walsh said on Monday that the passenger traffic recovery is accelerating and that the industry could now return to pre-pandemic figures on average in 2023, a year earlier than its previous forecast.

The continued easing of Covid-19-related restrictions by governments around the world is releasing demand that has been pent-up over the past two years as countries closed their borders.

The head of IATA, the world’s largest trade organization for airlines, told Reuters that overall passenger traffic is growing faster than expected despite the war in Ukraine and ongoing restrictions in China’s big aviation market.

“We are seeing very strong bookings. Certainly all the airline CEOs I speak to not only see good demand for year-end travel, but they continue to see demand when looking year-round,” he said at a conference in Riyadh.

Walsh said high oil prices and travel disruptions due to labor shortages have not deterred travelers so far, although oil prices likely pushed fares up 10 percent.

“I don’t think we should be distracted by the fact that we are seeing a strong recovery, and I think the recovery will gain momentum later this year into 2023.”

Overall, the industry is now on track to recover to pre-pandemic passenger transport in 2023, helped by an expected strong summer this year, Walsh said.

However, he warned that passenger traffic could remain lower than before the pandemic in some individual seasons next year, while the Asia-Pacific region continues to lag behind due to the ongoing Covid-19 restrictions in the major aviation market of China.

Henrik Hololei, the EU Commission’s director-general for mobility and transport, told Reuters that if the pace of the recovery continues, passenger transport in Europe could return to pre-pandemic levels in 2023.

Jozsef Varadi, chief executive of Wizz Air, said separately that he was quite confident about a good peak summer season, in which the European low-cost airline will operate more flights than in the year before the Covid-19 pandemic.

“It’s going to be a very interesting mix for the summer,” he said in Riyadh, forecasting plenty of customers but also potential challenges like supply chain issues and higher costs.

Wizz Air has hedged around 60 percent of its fuel needs over the next six months, Varadi said, arguing that the airline is in a better position to deal with inflationary pressures and high fuel prices, partly because of its access to $1.5 billion in cash.

“We are an investment grade company with continued access to low cost capital and we are a liquid company.” Air travel could return to pre-pandemic levels next year despite 10 per cent fare hike – Willie Walsh

Fry Electronics Team

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