IATA predicts strong international air travel recovery despite China restrictions

The recovery in global air travel continues to support forecasts of a return to 2019 levels of traffic in 2024 at the aggregate level, against a backdrop of slow economic growth as per IATA.

Speaking at the World Financial Symposium, IATA Chief Economist Marie Owens Thomsen said: “The global GDP growth was expected to come in at around 3% this year, which is half the growth experienced in 2021. Emerging economies will bear the brunt of the challenges this creates. At the same time, spectacular job growth should help allay the impact of rising inflation and interest rates.”

Owens Thomsen also pointed out that high inflation translates into lower real interest rates even if nominal rates rise. High inflation also reduces the real value of debt, she added.

Going ahead she also stressed that forward bookings continue to be strong, with international bookings accelerating despite lingering COVID-19-related travel restrictions in Asia, and especially in China.

Turning to the long-term industry outlook, the forecast is for a 3.4% compound annual growth rate (CAGR) between 2019 and 2040. Such was the impact of COVID-19 and related travel restrictions; however, she estimated the lost traffic between 2020 and 2022 as equivalent to 1.8x 2019 RPKs. And in 2040, if the current forecast is realized, traffic will still be 6% below the pre-pandemic forecast, she said.