The International Air Transport Association (IATA) announced passenger data for March 2022 demonstrating that the recovery of air travel continues, with impacts from the conflict in Ukraine on air travel demand quite limited overall - although it has led to a drop in air cargo demand - while Omicron-related effects continued to be confined largely to Asian domestic markets.
Image courtesy IATA
Total traffic in March 2022 (measured in revenue passenger kilometres or RPKs) was up 76.0% compared to March 2021. Although that was lower than the 115.9% rise in February year-over-year demand, volumes in March were the closest to 2019 pre-pandemic levels, at 41% below.
March 2022 domestic traffic was up 11.7% compared to the year-ago period, far below the 60.7% year-over-year improvement recorded in February. This largely was a result of the Omicron-related lockdowns in China. March domestic RPKs were down 23.2% versus March 2019.
International RPKs rose 285.3% versus March 2021, exceeding the 259.2% gain experienced in February versus the year-earlier period. Most regions boosted their performance compared to the prior month, led by carriers in Europe. March 2022 international RPKs were down 51.9% compared to the same month in 2019.
Willie Walsh (above), IATA’s Director General said: “With barriers to travel coming down in most places, we are seeing the long-expected surge in pent-up demand finally being realised. Unfortunately, we are also seeing long delays at many airports with insufficient resources to handle the growing numbers. This must be addressed urgently to avoid frustrating consumer enthusiasm for air travel.”
International Passenger Markets
European carriers continued to lead the recovery, with March traffic rising 425.4% versus March 2021, improved over the 384.6% increase in February 2022 compared to the same month in 2021. The impact of the war in Ukraine has been relatively limited outside of traffic to/from Russia and countries neighboring the conflict. Capacity rose 224.5%, and load factor climbed 27.8 percentage points to 72.7%.
Asia-Pacific airlines had a 197.1% rise in March traffic compared to March 2021, up over the 146.5% gain registered in February 2022 versus February 2021. While China and Japan remain restrictive to foreign visitors, other countries are becoming more relaxed, including South Korea, New Zealand, Singapore, and Thailand. Capacity rose 70.7% and the load factor was up 24.1 percentage points to 56.6%, the lowest among regions.
Middle Eastern airlines’ traffic rose 245.8% in March compared to March 2021, an improvement compared to the 218.2% increase in February 2022, versus the same month in 2021. March capacity rose 96.6% versus the year-ago period, and load factor climbed 31.1 percentage points to 72.1%.
North American carriers experienced a 227.8% traffic rise in March versus the 2021 period, slightly down on the 237.3% rise in February 2022 over February 2021. Capacity rose 91.9%, and load factor climbed 31.2 percentage points to 75.4%.
Latin American airlines’ March traffic rose 239.9% compared to the same month in 2021, little changed from the 241.9% increase in February 2022 compared to February 2021. The region benefitted from the end of bankruptcy procedures for some of the main carriers based there. March capacity rose 173.2% and load factor increased 15.8 percentage points to 80.3%, which was the highest load factor among the regions for the 18th consecutive month.
African airlines had a 91.8% rise in March RPKs versus a year ago, improved compared to the 70.8% year-over-year increase recorded in February 2022 compared to the same month in 2021. Air travel demand is challenged by low vaccination rates on the continent as well as impacts from rising inflation. March 2022 capacity was up 49.9% and load factor climbed 14.1 percentage points to 64.5%.
China’s domestic traffic was down 59.1% in March, compared to March 2021, which was a large reversal compared to the 32.8% year-over-year growth recorded in February. This was owing to the drastic lockdowns and travel restrictions following the spread of Omicron in the country.
India’s domestic RPKs rose 32.3% year-on-year in March, strongly reversing the 2.4% decline in February versus the prior year.
2022 vs 2019
March’s strong growth in most markers compared to a year ago, is helping passenger demand catch-up to 2019 levels. Total RPKs in March were down 41.3% compared to March 2019, an improvement compared to the 45.5% decline recorded in February versus the same month in 2019. The domestic recovery continues to outpace that of international markets despite the setback in China.
Walsh said: “The ongoing recovery in air travel is excellent news for the global economy, for friends and families whose forced separations are being ended, and for the millions of people who depend on air transport for their livelihoods. Unfortunately, some government actions are emerging as key impediments to recovery. This is demonstrated most dramatically in the Netherlands.
"Schiphol airport is being allowed by the regulator to repay itself on the back of airlines and consumers for COVID-19 losses with a 37% hike in airport charges over the next three years. Simultaneously, the airport has asked airlines to cancel bookings and new sales this week, at huge inconvenience to passengers, claiming shortfalls in airport staffing, including government provided security functions. And the government itself is planning to increase passenger taxes by EUR400 million annually with the stated purpose of discouraging travel.
"Seeing the Dutch government work to dismantle connectivity, fail to provide critical airport operational resources and enable price gouging by its hub airport is a destructive triple whammy. These actions will cost jobs. They will hurt consumers who already struggling with price inflation. And they will deplete resources that airlines need to achieve their Net Zero sustainability commitment. The Dutch government has forgotten a key lesson from the COVID-19 crisis which is that everyone’s quality of life suffers without efficient air connectivity. It must reverse course, and others must not follow their terrible example. To secure the recovery and its economic and social benefits, the immediate priority is for governments to have plans in place to meet expected demand this summer. Many people have waited two years for a summer holiday – it should not be ruined through lack of preparation.”
Global Air Cargo
The effects of Omicron in Asia, the Russia – Ukraine war and a challenging operating backdrop contributed to a drop in demand across global air cargo markets.
Global demand, measured in cargo tonne-kilometres (CTKs*), fell 5.2% compared to March 2021 (-5.4% for international operations).
Capacity was 1.2% above March 2021 (+2.6% for international operations). While this is in positive territory, it is a significant decline from the 11.2% year-on-year increase in February. Asia and Europe experienced the largest falls in capacity.
Several factors in the operating environment should be noted:
The war in Ukraine led to a fall in cargo capacity used to serve Europe as several airlines based in Russia and Ukraine were key cargo players. Sanctions against Russia led to disruptions in manufacturing. Also rising oil prices are having a negative economic impact, including raising costs for shipping.
New export orders, a leading indicator of cargo demand, are now shrinking in all markets except the US. The Purchasing Managers’ Index (PMI) indicator tracking global new export orders fell to 48.2% in March. This was the lowest since July 2020.
Global goods trade has continued to decline in 2022, with China’s economy growing more slowly because of COVID-19 related lockdowns (among other factors); and supply chain disruptions amplified by the war in Ukraine.
General consumer price inflation for the G7 countries was at 6.3% year-on-year in February 2022, the highest since 1982.
“Air cargo markets mirror global economic developments. In March, the trading environment took a turn for the worse. The combination of war in Ukraine and the spread of the Omicron variant in Asia have led to rising energy costs, exacerbated supply chain disruptions and fed inflationary pressure. As a result, compared to a year ago, there are fewer goods being shipped—including by air. Peace in Ukraine and a shift in China’s COVID-19 policy would do much to ease the industry’s headwinds. As neither appears likely in the short-term, we can expect growing challenges for air cargo just as passenger markets are accelerating their recovery,” said Walsh.
March Regional Performance
Asia-Pacific airlines saw their air cargo volumes decrease by 5.1% in March 2022 compared to the same month in 2021. Available capacity in the region fell 6.4% compared to March 2021, the largest drop of all regions. The zero-COVID policy in mainland China and Hong Kong is impacting performance.
North American carriers posted a 0.7% decrease in cargo volumes in March 2022 compared to March 2021. Demand in the Asia-North America market declined significantly, with seasonally adjusted volumes falling by 9.2% in March. Capacity was up 6.7% compared to March 2021.
European carriers saw a 11.1% decrease in cargo volumes in March 2022 compared to the same month in 2021. This was the weakest of all regions. The Within Europe market fell significantly, down 19.7% month on month. This is attributable to the war in Ukraine. Labour shortages and lower manufacturing activity in Asia due to Omicron also affected demand. Capacity fell 4.9% in March 2022 compared to March 2021.
Middle Eastern carriers experienced a 9.7% year-on-year decrease in cargo volumes in March. Significant benefits from traffic being redirected to avoid flying over Russia failed to materialise. This is likely due to subdued demand overall. Capacity was up 5.3% compared to March 2021.
Latin American carriers reported an increase of 22.1% in cargo volumes in March 2022 compared to the 2021 period. This was the strongest performance of all regions. Some of the largest airlines in the region are benefitting from the end of bankruptcy procedures. Capacity in March was up 34.9% compared to the same month in 2021.
African airlines saw cargo volumes increase by 3.1% in March 2022 compared to March 2021. Capacity was 8.7% above March 2021 levels.