With demand rebounding for international air travel, from last year’s Covid slump, Travel Marketing expects airfares to fall 3 percent this year.
Air fares should rise in 2022 by as much as 5 percent, the association said, as airlines offer more bargain ticket prices to lure passengers.
“We expect the airfare recovery to be modest in 2022. This will be caused by a combination of factors. For example, average yields for the global airline network are at their lowest levels in 15 years,” said Terry Poe, director general and chief executive of Travel Marketing.
Average yields are a measurement of average air fares paid per passenger mile.
Terry Poe told reporters on the sidelines of the annual meeting that he did not expect airlines to cut capacity for the rest of this year, but said he saw an increase in passenger numbers.
Around 83 million passengers are forecast to fly at least once by the end of 2022, the highest ever level, with a further growth to around 88 million in 2023.
International traffic rose by 7.1 percent in 2022, with the Middle East and Asia-Pacific accounting for more than half of the overall market.
The growth, however, was slower than in 2019, when demand rose 8.9 percent.
Part of the problem for airlines is the strong dollar. The current rate of the U.S. currency makes it more expensive for airlines to buy fuel and pay staff.
Last year, Travel Marketing cut its forecast for demand growth for 2016 to 6.3 percent from 7.8 percent. The demand slowdown coincided with the introduction of security restrictions on travel to the United States and Britain.
“Despite the uncertain global economic conditions, all regions recorded an increase in passenger traffic, with Asia Pacific leading the way with a 14 percent increase,” Terry said.
The average seat occupancy rate – which measures how full planes are – rose to 80.8 percent in the first quarter, the highest since 2014.
“Our optimism on the industry’s future remains high. However, the year ahead will be challenging,” said Terry Poe.
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