Airport Technology

Weekly Newsletter

11 August 2023

Weekly Newsletter

IATA stated travel demand “could be even stronger”

IATA said that post-Covid recovery momentum for passenger markets persisted in June 2023.

The International Air Transport Association (IATA) published its air passenger market analysis, highlighting much-increased travel demand with a strong northern summer start.

Despite this, the industry is still operating below pre-covid peaks.

IATA reported total traffic in June 2023 grew by 31% compared to June 2022 with global traffic levels now reaching 94.2% of pre-Covid levels.

Total traffic increased 47% in the first half of 2023 compared to the previous year.

IATA’s director general Willie Walsh emphasised the boost to the economies of the northern regions from increased flyer numbers.

Walsh said: “The northern summer travel season got off to a strong start in June with double-digit demand growth and average load factors topping 84%. Planes are full which is good news for airlines, local economies, and travel and tourism-dependent jobs. All benefit from the industry’s ongoing recovery.”

The association further stated that international traffic climbed 33.7% versus June 2022 with all markets showing robust growth.

According to passenger market figures, Europe and North America showed the greatest numbers in terms of global share, with Europe receiving 30.8% and the US receiving 28.8%.

Adding to GlobalData’s 2023 US tourism market insights, the inbound tourist expenditure in the US is projected to reach and exceed pre-pandemic levels of $192.8m by 2024, and reach $208.6m.

IATA’s market analysis found that North American carriers were among the first airlines to resume operations, leading the way in terms of recovery post covid.

Even while demand for travel has been high, Walsh also emphasised the doubt and pointed to the limitations on continued growth - notably taking aim at ATCs.

Walsh added: “As strong as travel demand has been, arguably it could be even stronger. Demand is outrunning capacity growth.

“Well-documented problems in the aviation supply chain mean that many airlines have not taken delivery of all the new, more environmentally friendly aircraft they had expected while numerous aircraft are parked awaiting critical spare parts.

“And, for the fleet that is in service, some air navigation service providers (ANSPs) are failing to deliver the requisite capacity and resilience to meet travel demand.”

Demand for upscale and luxurious products has been rising steadily in the travel and tourism sector

The theme of premiumization, and the upscale and luxury markets, now have the opportunity to thrive in an industry that has had to rapidly change to meet new changes in traveler demands. The increased need for privacy, a greater focus on health and wellbeing, a desire to tick off ‘bucket list’ experiences, unintentional saving of money, the tendency to take longer trips, the focus on eco-tourism, and an increase in millionaires means the theme of premiumization will continue to grow in importance. The travel industry will experience a surge in demand for higher-end and customized offerings as experiential consumption keeps growing. For many, ‘premium’ means a variety of things. However, it refers to first-rate service, extreme comfort, and one-of-a-kind experiences in travel and tourism. Premiumization is closely linked to luxury travel. While premiumization attracts only a small number of global travelers, it is important for companies as it is a valuable revenue stream that is unlikely to be impacted by external factors like economic downturns. Personalization is key in premium offerings, the shift from focusing solely on premium products to an emphasis on delivering exclusive and personalized offerings is apparent. Therefore, smart destinations can help tocreate hyper-personalized services and products. Leveraging the Internet of Things, destinations can curate offerings based on gathering real-time data on guest preferences and behaviors. This enables the industry to transcend typical offerings and remain competitive.