Omicron dampens passenger traffic recovery in January, reports IATA

INTERNATIONAL. The International Air Transport Association (IATA) has highlighted the impact of travel restrictions enforced in response to the COVID-19 variant Omicron. Its latest flight data shows that recovery slowed significantly between December 2021 and the first month of this year.

Total demand for air travel in January 2022 (measured in revenue passenger kilometres or RPKs) was up +82.3% compared to the very low traffic base of January 2021. However, it was down -4.9% compared to the previous month (December 2021) on a seasonally adjusted basis.

IATA also revealed that January domestic air travel was up +41.5% compared to the year-ago period but fell -7.2% compared to December 2021 on a seasonally adjusted basis.

Strong traffic growth was recorded in January 2022 compared to a year ago, but passenger demand remains far below pre-COVID-19 levels (Image: Gatwick Airport)

Encouragingly, international RPKs rose +165.6% versus January 2021 but fell by -2.2% month-on-month between December 2021 and January 2022 on a seasonally adjusted basis.

IATA Director General Willie Walsh said: “The recovery in air travel continued in January, despite hitting a speed bump called Omicron. Strengthened border controls did not stop the spread of the variant. But where population immunity was strong, the public health systems were not overwhelmed.”

He added: “Many governments are now adjusting COVID-19 polices to align with those for other endemic viruses. This includes lifting travel restrictions that have had such a devastating impact on lives, economies and the freedom to travel.”

International passenger markets

European carriers’ January international traffic rose +225.1% versus January 2021, which was up slightly compared to a +223.3% increase in December 2021 versus the same month in 2020. Capacity rose +129.9% and load factor climbed +19.4 percentage points to 66.4%.

Asia Pacific airlines saw their January international traffic climb +124.4% compared to January 2021, down significantly from the +138.5% gain registered in December 2021 versus December 2020. Capacity rose +54.4% and the load factor was up +14.7 percentage points to 47.0%, still the lowest among regions.

Middle East airlines saw their recovery rate fall in January with increased restrictions due to the COVID-19 Omicron variant

Middle East airlines had a +145.0% demand rise in January compared to January 2021, well down compared to the +178.2% increase in December 2021, versus the same month in 2020. January capacity rose +71.7% versus the year-ago period, and load factor climbed +17.5 percentage points to 58.6%.

North American carriers experienced a +148.8% traffic rise in January versus the 2021 period, significantly decreased versus the +185.4% rise in December 2021 compared to December 2020. Capacity rose +78.0%, and load factor climbed +17 percentage points to 59.9%.

Latin American airlines saw a +157.0% rise in January traffic, compared to the same month in 2021, an upturn over the +150.8% rise in December 2021 compared to December 2020. January capacity rose +91.2% and load factor increased +19.4 percentage points to 75.7%, which was easily the highest load factor among the regions for the 16th consecutive month.

African airlines’ traffic rose +17.9% in January 2022 versus a year ago, a slowdown compared to the +26.3% year-over-year increase recorded in December 2021. January 2022 capacity was up +6.3% and load factor climbed +6 percentage points to 60.5%.

Domestic Passenger Markets

Japan’s domestic demand was +107%, which was the fastest year-on-year growth recorded among domestic flight markets, although on a seasonally adjusted basis, January 2022 traffic slipped -4.1% from December.

India’s domestic RPKs fell by -18% year-on-year in January, which was the biggest decline recorded for any of the domestic markets tracked by IATA. On a month-on-month basis, seasonally adjusted RPKs dropped by nearly -45% between December and January. 

2022 vs 2019 – the big picture

Despite the strong traffic growth recorded in January 2022 compared to a year ago, passenger demand remains far below pre-COVID-19 levels. Total RPKs in January were down -49.6% compared to January 2019. International traffic was down -62.4%, with domestic traffic trailing by -26.5%.

Russia-Ukraine conflict analysis

The figures release for January by IATA do not include any impact from the Russia-Ukraine conflict which began at the end of February. The resulting sanctions and airspace closures are expected to have a negative impact on travel, it said, primarily among neighbouring countries.

IATA observed that the Ukraine market accounted for 3.3% of European passenger traffic and 0.8% of global traffic in 2021.

The Russian international market, meanwhile, represented 5.7% of European traffic (excluding Russia domestic market) and 1.3% of global traffic in 2021.

Airspace closures have led to rerouting or cancellations of flights on some routes, mostly in the Europe-Asia but also in Asia-North America market, IATA noted. This impact, it said, is mitigated owing to greatly diminished flight activity since borders in Asia were largely closed owing to COVID-19. In 2021, RPKs flown between Asia-North America and Asia-Europe accounted for 3.0%, and 4.5%, respectively, of global international RPKs.

Willie Walsh warned that soaring jet fuel prices will be another significant barrier to airline industry recovery

In addition to these disruptions, the sudden spike in fuel prices is putting pressure on airline costs, IATA warned.

Walsh said: “When we made our most recent industry financial forecast last autumn, we expected the airline industry to lose US$11.6 billion in 2022 with jet fuel at US$78/barrel and fuel accounting for 20% of costs. As of 4 March, jet fuel is trading at over US$140/barrel.

“Absorbing such a massive hit on costs just as the industry is struggling to cut losses as it emerges from the two-year COVID-19 crisis is a huge challenge. If the jet fuel price stays that high, then over time, it is reasonable to expect that it will be reflected in airline yields.”

Turning his attention to the global air travel market, Walsh commented: “The past few weeks have seen a dramatic shift by many governments around the world to ease or remove COVID-19-related travel restrictions and requirements as the disease enters its endemic phase.

“It’s vital that this process continue and even accelerate, to more quickly restore damaged global supply chains and enable people to resume their lives.

“One step to encourage a return to normality is to remove mask mandates for air travel. It makes no sense to continue to require masks on airplanes when they are no longer being required in shopping malls, theatres or offices.

“Aircraft are equipped with highly sophisticated hospital quality filtration systems and have much higher air flow and air exchange rates than most other indoor environments where mask mandates already have been removed.”

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