Long-haul air travel to rebound strongly this year, says Avolon

Aircraft lessor cautions that recovery will be uneven

Long-haul air travel could recover strongly this year, hitting 70 per cent of pre-Covid levels, Irish aircraft lessor Avolon predicts.

Domestic or short-haul travel recovered to within 12 per cent of 2019’s totals last year as vaccination programmes took hold, aided by initiatives including the EU’s Covid certificates.

Avolon says in its 2022 outlook that international, or long-haul travel, which lagged pre-pandemic levels by 60 per cent last year, could begin its recovery in earnest in coming months.

"North America and Latin America lead the recovery, with around 80 per cent of airline capacity flying again while Asia Pacific trails at less than half," says Avolon.

“Europe’s digital certificate provided a framework to reopen borders in time for peak summer. The transatlantic reopening in the fourth quarter led to an immediate bump in passenger bookings.”

Losses halved

Official figures show that European air travel had reached more than 85 per cent of 2019 levels before the Omicron strain’s emergence prompted governments to impose fresh restrictions in December.

However, flights from Europe to North America and other long-haul destinations trailed as ongoing restrictions in countries including the US and Canada deterred travellers.

Avolon forecasts that Europe and the Americas are poised to rebound again once the Omicron wave subsides.

“Continued gradual recovery is expected in 2022, varied region by region. Each wave of infections results in a smaller impact on air travel demand,” the aircraft lessor argues.

Jim Morrison, Avolon's head of portfolio management, calculated on Tuesday that airline losses halved in 2021 to $54 billion (€47 billion) .

“Looking ahead, the strong economic growth forecast for 2022 will drive a further recovery in demand for air travel,” he added. Mr Morrison cautioned that the recovery would be uneven and vary from region to region.

Rosemarie O’Leary, Avolon’s head of counterparty risk, predicted that aircraft lessors would be integral to the recovery.

“Beyond the recovery, environmental considerations will remain central to the aviation agenda for the period ahead,” she said.