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Examining the brushstrokes in the big picture
A key session at the World Air Transport Summit examined the factors influencing the future of air transport.
Marie Owens Thomsen, IATA’s SVP Sustainability and Chief Economist, noted that 2023’s anticipated GDP growth of 2.8% was “not great, but not bad,” a sentiment that ran through much of the discussion with positive and negative factors well balanced.
Passenger numbers are expected to double from 4.4 billion in 2023 to 9.2 billion in 2040 with the biggest growth in Asia-Pacific. The foundation for this increase is the rapid recovery of aviation following the pandemic. In the short term, airlines will make a net profit of $9.8 billion in 2023, equating to a 1.2% margin or $2.25 per passenger. And although cargo declined compared with previous few years, it is still well in advance of 2019 levels in terms of revenues and yield.
There are risks, however, including a rise in jet fuel prices, blocked funds, global inflation, the war in Europe, and foreign exchange rates.
Sustainability could be the main inhibitor of growth. Fatih Borel, Executive Director International Energy Agency, said net zero carbon emissions by 2050 is a “very ambitious target.” Aviation emissions are the hardest to abate compared with other transportation modes. Electrification of road transport is here and growing rapidly, for example.
The panel, which also included Ralph Ossa, Chief Economist, World Trade Organization and Alan Beattie, Senior Trade Writer, Financial Times agreed that the right policies are needed to promote sustainable aviation fuel production.
