Air Passenger Volumes Expected to Continue to Close Gap on Pre-Pandemic Levels in 2023 Supported by Improving International Travel
This commentary reviews the recovery in air passenger volumes in 2022 and our expectations for 2023.Key highlights include:
• Despite slowing global economic growth, air passenger volumes continue to recover supported by a sustainable recovery in domestic volumes, and a strengthening recovery in international travel.
• Demand for aircraft has improved as airlines continue to restore their networks to meet rising travel volumes. This is a positive for aircraft values and lease rates, especially for the newer, more efficient narrowbody aircraft, and benefit aircraft lessors.
• In 2023, we expect that the recovery in domestic passenger volumes will continue to close the gap to pre-pandemic levels, but downside risks remain. Domestic leisure travel will continue to lead the rebound, while the anticipated restoration of business travel that began in 2022 is expected to improve gradually throughout 2023. Meanwhile, long-haul international travel will continue to recover in 2023 as most borders have reopened and travel restrictions have been lifted.
“Given the recent significant virus outbreak in China following the loosening of restrictions, the expected lift to the recovery in domestic and international travel from the lifting of travel restrictions will not be evident until later in 2023,” said David Laterza, Senior Vice President, Head of Non-Bank FIG – Global FIG.
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