The World Economic Forum has set a bleak precedent for world economies in its Global Risks Report for 2024. The negative outlook in the short term is also expected to continue to worsen over time with 30% of global experts predicting an elevated chance of global catastrophes within the next two years. Meanwhile, 63% of experts see a turbulent outlook for the next decade.
The Global Risk Network was established in 2004, tracking risks in the five areas of economics, environment, geopolitics, society and technology. Thus, the network has been drawing upon nearly two decades of data and paints a concerning forecast for global sectors, including the aviation industry.
Marsh McLennan chief commercial officer for Europe Carolina Klint said: “companies are having to negotiate supply chains made more complex by geopolitics and climate change and cyber threats from a growing number of malicious actors.”
The report found that 66% of experts agree that climate change is the top risk globally, with environmental risks potentially reaching a tipping point where irreversible global damage will occur as a result. It added: “the impacts of extreme weather may deplete available resources to mitigate and adapt to climate change.”
The report concurs with IATA’s report that examined the key risks facing the global economy and aviation industry in 2024, agreeing that climate change impact is already severe in the short-term with premature deaths due to rising temperatures and mass migrations due to natural disasters. The aviation industry can expect more operational disruptions with large hubs disrupted by weather events, according to the IATA report.
Interestingly, 53% of experts agreed that AI-generated misinformation and disinformation presented a material threat. Particularly, with 2024 seeing elections in the EU, Taiwan, the UK, and the US, the relevancy of this threat will be more present than ever. Taiwan’s January 13 election could determine China’s geopolitical stance in the world. The IATA report concurred with this, stating that the results of these elections could lead to an impediment in trade and oil-price volatility. Meanwhile, the World Economic Forum had found cyberattacks to be its fifth risk at 39% of experts agreeing. Furthermore, with the global governance gap growing through economic hardship, climate change, and conflict, markets are becoming more vulnerable to cyberattacks.
With the Ukraine-Russia and Israel-Gaza conflict continuing, fears of conflicts spreading, airspace restrictions, cancelled flights, and fuel shortages could put further pressure on the aviation industry. This was seen on January 10, when airBaltic announced it was cancelling flights to and from Tel Aviv until March 31 as tensions within Israel continued to mount.
The report found listed the cost-of-living crisis as its fourth issue to most likely create a material global crisis, at 42%. However, the rise to almost pre-pandemic levels of air traffic in 2023 along with ATOL’s research finding that 51% of UK citizens planning to travel abroad twice in 2024 perhaps bodes well for the aviation industry. However, if the economic pressures fail to alleviate or worsen, perhaps the trend of 'revenge travel' will taper off in an effort to manage monetary burdens.
The World Economic Forum report calls on greater international cooperation to resolve and maintain these risks. However, the IATA report stated the growing climate change is provoking social unrest and adds pressure to an already fraught geopolitical system, thus destabilising international collaboration to effectively and globally address climate change. The Global Risks Report also argues in favour of individual and state training of digital literacy against the rise of AI misinformation. It also calls upon the public and private sectors to collaborate in order to develop effective climate modelling and technologies to speed up the energy transition.
Klint said: “it will take a relentless focus to build resilience at organisational, country and international levels – and greater cooperation between the public and private sectors – to navigate this rapidly evolving risk landscape.”