Global commercial air travel demand reached 90% of pre-Covid levels in May 2023, according to Bain & Company's Air Traffic Demand Forecast Model. A complete rebound is anticipated in the first half of 2024, primarily driven by the resumption of Chinese air travel. However, current recovery trends may be dampened by the evolving macroeconomic environment. A potential recession and rising inflationary pressure could adversely affect leisure travellers' disposable income in the next two years and delay full air travel recovery.
The outlook for the business travel segment is less optimistic, with full recovery unlikely to happen before 2027. International business travel was hit the hardest by the pandemic and is expected to take longer to recover, as many companies significantly reduced business travel and shifted to online meetings to optimise costs and efficiency. According to a recent Bain & Company survey, a majority of airline executives believe video calls will reduce business travel by at least 11% to 20% in the next decade. Furthermore, the rising importance of the environmental, social, and governance (ESG) agenda has intensified companies' efforts to reduce their carbon footprint, adding another headwind for business travel recovery.
In Asia, overall traffic recovery is lagging slightly behind global averages. Air travel within the region is expected to recover closer to the end of 2024, while international traffic flows are generally expected to take longer to rebound. For example, traffic from Asia to Europe is forecasted to recover only in 2025.
