Aviation
après le Déluge — June 2024

The Airline Industry has finally emerged from the severe recession caused by the impact of the Covid-19 pandemic. It has taken a long time. Previous severe downturns in traffic — caused respectively by the events of the 1990 Gulf War recession, the terrorist attacks on September 11th 2001, SARS epidemic in 2002, and the 2008 Global Financial Crisis — were relatively short-lived: it only took nine- to eighteen-months for traffic to recover to pre-crisis levels, and not long thereafter for growth to rebound to long term trends. This time it will have been over four years before industry-wide RPKs reach the level achieved in 2019.

IATA in its economic outlook issued for the organisation’s annual meeting in June raised its forecasts for profitability. In the depths of the pandemic in 2020 revenues halved. In 2021 and 2022 revenues only reached 61% and 88% respectively of the levels seen in 2019 — in large part helped by an explosion in cargo revenues as airlines capitalised on the use of empty aircraft to carry freight in hand with a squeeze on yields because of lack of belly-hold capacity and logistical problems in maritime freight (see graph).