European air traffic management body Eurocontrol has revised down its aviation recovery forecast with a return to 2019 levels of traffic now not expected until 2025.
The latest Eurocontrol forecast updates that in June when a full recovery by 2024 was expected.
Eurocontrol director general Eamonn Brennan said: “We’ve seen strong demand this summer, but this has been held back both by the capacity of the sector to handle rapid growth and by the impact of the war in Ukraine.
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“We expect to see 49% more flights this year than in 2021 but still 16% fewer than in 2019.
“We’re optimistic about traffic recovering to around 92% of 2019 levels next year. But there are significant downside risks that could affect the recovery.”
Eurocontrol forecasts are highly regarded and generally among the most accurate, with the latest suggesting most airlines will remain cautious on capacity through the current period of inflation and economic uncertainty.
The forecast sets out three scenarios – the most optimistic showing recovery to 2019 levels in 2023 and the most pessimistic a recovery after 2028.
However, the ‘baseline’ scenario of recovery by 2025 is deemed most likely.
The assumptions behind these make sobering reading.
All three scenarios assume increasing energy prices with a knock-on effect on consumers’ purchasing power which affects demand for travel. All three also assume some of the staff shortages this summer “might occur again in 2023”.
However, all three also assume a “full restoration” of long-haul traffic flows in 2023 and “very limited travel restrictions” due to Covid-19.
The baseline scenario assumes weak economic growth “for most European states” next year and continuing high inflation.
The lower growth scenario assumes a recession in “a significant number of European states” and a strong reduction in demand due to inflation.
The high-growth scenario is based on moderate economic growth in most of Europe next year – a prospect which appears unlikely – and inflation having a limited impact on demand.
Eurocontrol notes air traffic in the year to date reached 82% of 2019 levels by October and was at 87% early in the month. However, this remained below the June forecast of 90% by September-October and 92% by December.
It forecasts traffic in 2023 will reach 92% of the 2019 level, rising to 98% in 2024.
Yet Eurocontrol warns: “Uncertainty remains very high, with risks skewed to the downside.”
It reports fuel prices have risen 47% since the beginning of the year and air fares were up 15% on the 2019 level in July and notes: “It is uncertain how airlines will be able to pass on the fuel price spikes to travellers.”
Eurocontrol foresees “no return to ‘normal’ routing” in Ukrainian and Russian airspace “by the end of the seven-year horizon” and warns: “A longer conflict with bigger disruptions to energy markets would translate into a bigger hit to global economic expansion [and] a further deterioration of the economic situation.”
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