Ease of China travel ban a welcome relief for East African tourism

China’s decision to simultaneously lower restrictions for Covid-19 and resume regular international travel is being seen as a possible silver lining in East Africa’s quest to revamp its tourism industry.

Traditionally reliant on the West and each other, East African countries were specifically hurt during the Covid-19 pandemic as travel restrictions slowed down visits. The pandemic also hurt the region’s desire to expand tourism markets beyond the traditional sources, and China had been one of the identified new market.

Beijing announced it will be permitting overseas group tours beginning February 6, selecting Kenya for a trial phase.

Such group tours will be the first in three years of closed borders under China’s strict “zero-Covid” policy, which ended in December.

Group tours

Successful group tours could benefit Kenya and beyond.

In the East African Community, Kenya, Uganda and Rwanda already offer a single tourism visa, which would allow the Chinese visitors to tour these countries without additional immigration requirements.

Before the pandemic, some 155 million Chinese travel outside the country, signalling the importance of the Asian country as the biggest source market for tourists, accounting for nearly 10 percent of global tourists. The numbers have been paltry for the East African region, however, averaging 30,000.

According to the Tourism Sector Performance Report January-August 2022 by the Kenyan Ministry of Tourism and Wildlife, the country received six percent of the total 924,812 to visitors from China for the period, representing only 55,488 visitors.

Open outbound travel

Beijing had suspended overseas group tours in January 2020 amid the spread of Covid-19. Last week, Chinese authorities said in a notice that a pilot programme will allow travel agencies to open outbound group travel for Chinese citizens to 20 nations, including Kenya, Egypt and South Africa.

Other countries include Thailand, Indonesia, Cambodia, Maldives, Sri Lanka, the Philippines, Malaysia, Singapore, Laos, the United Arab Emirates, Russia, Switzerland, Hungary, New Zealand, Fiji, Cuba and Argentina.

Wang Wenbin, the Chinese Foreign Ministry spokesman, said last week that many countries have “extended a warm welcome” to Chinese tourists, and many Chinese are looking forward to traveling overseas.

Chinese visitors

“In 2019, Kenya received approximately 84,000 Chinese visitors, a small proportion compared to the millions of outbound Chinese tourists which resulted to development of a strategy to woo more visitors.

“I was among tour operators who were to implement it but Covid struck,” said Jonathan Mwangecho, a Kenyan tour operator.

A 2021 report by the World Tourism Organisation showed Chinese tourists were the biggest spenders in the world, with each tourist spending more than $1,250 per trip, which was almost 35 per cent higher than European tourists.

No marketing efforts

Kenya says it has not benefited from the outbound Chinese tourism boom due to a lack of marketing efforts in the Asian nation despite the country being granted Approved Destination Status for outbound Chinese tourist groups in 2004.

In the region, China was Tanzania’s lead market for tourists before the pandemic.

The notice asks local authorities to understand the trial programmer’s importance in rejuvenating the country’s tourism industry and how they must take good care of tourists.

In January, Kenya Tourism Cabinet Secretary Peninah Malonza and Chinese counsellor at the Chinese Embassy in Kenya Tang Jianjun launched a new Club of Sino-Africa Culture and Tourism to promote cross-cultural understanding, co-operation and people-to-people interactions.

Source: The East African

Ways to reduce air travel costs in East Africa

Arusha. Industry players have suggested how the prohibitive air fares in East Africa can be lowered.

These have to include total unification of air transport service or deliberate preference to local airlines registered rather than the international carriers.

A single air transport services agreement binding all seven East African Community (EAC) partner states is seen as a solution to the exorbitant costs and related challenges.

“It will lower the cost of air tickets for both passengers and cargo in the region,” said the East African Business Council (EABC) executive director, John Bosco Kalisa.

He made the appeal on Wednesday during a validation webinar for the recently concluded study on air transport services Liberalisation in the EAC bloc.

He challenged the EAC partner states to give “favourable treatment” to the EAC airlines in order to lower the fares through proximity and economies of scale.

The study commissioned by EABC, an apex body of private sector associations in the region, aimed to seek ways to bring down air transport fares in the region.

Also incorporated in the study is TradeMark East Africa (TMEA), an organization funded by a range of development agencies with the aim of growing prosperity in East Africa through trade.

Mr Kalisa regretted that foreign airlines that connect to the region often enjoyed more “favourable treatment” than EAC airlines. “The region can start offering preferential and national treatment to EAC cargo planes to boost exports,” he pointed out.

Mr Kalisa further called on the EAC bloc to consider replacing the existing Bilateral Air Services Agreements (BASAs) with a single air transport services agreement “so as to lower the cost of air transport in the region.”

The study proposed a raft of proposals to lower the cost of air transport in the EAC through a review of the current taxes, levies, and related charges.

Limited liberalisation of air transport contributes to high flight ticket rates, and visa restrictions limit the movement of non-residents into the EAC region.

Other factors impacting the aviation sector in the region are limited infrastructure and a lack of standardized regulations.

Despite the challenges, air transport costs were described as an enabler of tourism and exports of horticulture, which are among the leading sectors in foreign exchange earnings for the EAC.

Charles Omusana, the principal economist with the EAC secretariat, said liberalisation of air transport services will contribute “to our greatest desire of growing intra-EAC trade.”

The preliminary findings also reveal cargo volumes have largely stagnated in the EAC region due to the high cost of air cargo and the lengthy bureaucracy involved in obtaining clearance.

This has led to some airlines’ scheduling delays and inadequate infrastructure at the EA airports, like cold rooms and route restrictions, making it difficult to access new markets.

The webinar expounded that the EAC partner states should fast-track the finalization and implementation of EAC regulations on the liberalization of air transport services in line with the EAC Common Market Protocol.

The preliminary findings of the study on air transport liberalization in the EAC show a percentage increase in passenger traffic leads to a 0.166 percent increase in tourism receipts.

Similarly, a percentage increase in freight carrier departures leads to a 0.299 percent increase in tourism receipts.

At the same time, preliminary findings of the study show the percentage increase in air passenger traffic leads to a 0.05 percent increase in Gross Domestic Product (GDP).

This is achieved through an increase in trade, tourism, inbound investment, production, and employment.

In the meantime, air transport liberalisation in the EAC countries could result in an additional 46,320 jobs and $ 202.1 Million per annum in GDP.

Skyrocketing air transport costs have been a matter of concern in the EAC bloc for years.

The EABC has agitated countless times for a review of aviation taxes, levies, and charges so as to make the mode of transport affordable.

High air transport costs in the EAC are blamed for frustrating aviation-dependent sectors such as tourism and the export of fresh produce.

At the regional level, the domestic air transport sector remains protected in contravention of the EAC Common Market Protocol.

The air transport market in the EAC was also still under what is described as “tight regulation and control” by the governments.

This is believed to have denied fair competition among the operators within the bloc, now with seven partner states.

Expensive air tickets in the EAC have emerged at the plenary sittings of the East African Legislative Assembly (Eala).

Source: The Citizen

Nairobi to end state support for Kenya Airways in 4Q23

The Kenyan government is developing a financing strategy for Kenya Airways (KQ, Nairobi Jomo Kenyatta) that will end its reliance on state support by the end of December 2023, according to a brief note in its draft 2023 Budget Policy Statement.

“To support the aviation industry, the government will develop a turnaround strategy for Kenya Airways. A critical plank of this strategy will be a financing plan that does not depend on operational support from the exchequer beyond December 2023,” the statement reads.

Meanwhile, the technically insolvent flag carrier will receive state support of KES34.9 billion shillings (USD283.2 million) this year after the government earlier pledged continued financial aid in FY2022/23 to prevent defaults for the settlement of lessors’ arrears and working capital support. Since June 2022, Kenya Airways has been undergoing restructuring – financed with state loans that will have to be repaid – focusing on fleet and network simplification, staff rationalisation, cost management, labour agreement overhauls, ancillary business and strategic partnerships.

In May 2022, the government approved a state loan of KES20 billion shilling (USD173.9 million), and the airline borrowed another KES11.3 billion (about USD95 million) in the half-year ending June 30, 2022. This followed loans of KES11 billion (USD95.2 million) in 2020 and KES14 billion (USD121.1 million) in 2021.

The Kenyan government, in the meantime, is looking for a cash-rich foreign airline to take Kenya Airways off its hands. President William Ruto reportedly pitched a plan to Delta Air Lines (DL, Atlanta Hartsfield Jackson) during a visit to the United States recently.

Source: Ch-aviation

Reprieve for Kenyans as UK Reduces Visa Application Wait Time

The United Kingdom on Wednesday, January 25, announced developments in visa application for Kenyans wishing to travel to the Great Britain. 

The United Kingdom explained that the waiting period for visa applicants was reduced from months to three weeks. 

“Six months ago, I promised we would get our visa service for Kenyans travelling to the UK back on track.

“I’m pleased we’re now at normal customer service standards – a decision should take just three weeks, with faster priority services available,” explained British High Commissioner to Kenya, Jane Marriott. 

On July 2, 2022, Marriott apologised to Kenyans for the UK visa processing delay. 

In a video, Marriott explained that there was a backlog of visas since the pandemic time and that the situation contributed to the delays.

However, Kenyans willing to travel to the United Kingdom can now breathe a sigh of relief after Britain made a raft of changes to their Visa application process. 

You should get a decision within 3 weeks once you attend your appointment at the visa application centre, if you are applying for a visa to travel through the UK on your way to another country.

Ambassador Marriott noted that the process will be faster and more efficient for both student and child visa applicants. 

“You may be able to get your visa faster or access other services depending on what country you’re in – check with your visa application centre.

The qualification for a student visa is that one must be 16 years of age or older, and must have been offered a place on a course by a licensed student sponsor. 

The student visa applicant must have enough money to support themselves and pay for their course – the amount will vary depending on their circumstances. 

Additionally, student visa applicants should be able to speak, read, write and understand English.

“It costs £363 (Ksh56,000) to apply for a student visa from outside the UK and £490 (Ksh75,000) to extend or switch to a Student visa from inside the UK,” Britain explained. 

Nairobi and London enjoy strong bilateral ties since Kenya’s independence in 1963.

The UK and Kenya are members of the Commonwealth of Nations and engage with each other regularly on matters of military, economic and cultural importance.

Kenyan visa ranking considerably changed on the global stage, but a number of countries have authorised citizens to enter their countries without the visa requirement. 

Currently, Kenyans are allowed to visit South Africa without the visa requirements after Presidents William Ruto and Cyril Ramaphosa struck a deal.

Source: Kenyans

Dubai wins 232 bids for business events in 2022, almost twice as many as 2021

Set to be held over the coming years, the events will bring in an additional 135,000 visitors including scientists, thought-leaders and business executives to Dubai

Business events are poised to make a vital contribution to Dubai’s economic development and tourism growth, with another exceptional year of successful bids for international conferences, congresses, meetings and incentive travel programmes.

Dubai Business Events (DBE), the city’s official convention bureau, said it won 232 bids for business events in 2022, almost twice as many as the previous year.

Set to be held over the coming years, the events will bring in an additional 135,000 visitors including scientists, thought-leaders and business executives to Dubai, enhancing the value generated by the business events and tourism ecosystem.

Dubai’s business events and tourism

DBE collaborated with a range of stakeholders for the successful event bids, including Al Safeer Congress ambassadors and the public and private sector entities they represent, industry partners including Dubai World Trade Centre and Emirates, and hotels and professional congress organisers (PCOs) across the city.

Beyond their direct impact, the events, which include flagship conferences and congresses organised by international associations, as well as prestigious corporate meetings held by multinationals, will contribute to the emirate’s growth as a knowledge economy hub.

Dubai won bids for a record 57 association conferences in 2022, the highest achieved by DBE.

The strong performance in 2022 represented a 95 percent growth in the number of successful bids from 2021 and a 92 percent increase in the number of delegates added to the pipeline – all further accelerating the momentum of the emirate’s growth.

Ahmed Al Khaja, CEO of Dubai Festivals and Retail Establishment, said: “The remarkable growth in successful event bids contributes to the goal of the Dubai Economic Agenda D33 to make the city one of the top three global destinations for tourism and business.”

“Our goal has not only been to grow the business events sector and drive further visitation to the city, but also to ensure it can feed into the development of key sectors and professions,” Al Khaja said.

The major association events captured in 2022 included the International Federation of Clinical Chemistry and Laboratory Medicine WorldLab Congress 2024, International Congress of Endocrinology 2024, World Sports Medicine Congress 2024, World Congress of the International Society of Radiographers and Radiological Technologies 2026, and International Symposium on Dental Hygiene 2028.

The corporate meetings and incentive travel programmes that Dubai won bids for include IBM India and Europe Incentives 2023, Terpel Convention 2023, Envista EMEA Summit 2023 and Mary Kay Mexico Incentive 2024.

Aside from the bidding activity, DBE kept Dubai top of mind among meeting planners and association executives through an intense, year-round calendar of almost 200 global sales activities, including study missions, roadshows and participation in major trade shows.

To build on its 2022 successes, DBE is once again embarking on year-round activities in Dubai to further raise the profile of the city’s strengths and capabilities as a business events destination.

These include sales missions to key target markets and participation in major trade shows including IBTM World and IMEX.

DBE will also join forces with industry stakeholders to host meeting planners in Dubai for a series of study missions that will allow them to see first-hand the emirate’s business events and tourism infrastructure and its rapidly-growing knowledge economy.

Source: Arabian Business

Kenya eying next-generation border security systems to curb cross-border crimes

The government plans to deploy advanced and emerging technologies at its points of entry and exit to curb cross-border crimes and improve clearance of persons across the 35 one-stop border posts and border control checkpoints.

Interior Principal Secretary Dr Raymond Omollo relayed the government’s commitment to the concept of smart border security systems as a surefire response to the illegal activities threatening national and regional security.

“We have been entrusted with the task of safeguarding our borders against the crimes and activities that drive the globalized illegal economy,” the PS said during a meeting with the Border Control and Operations Coordination Committee (BCOCC) in Kisumu.

“As you all know, the threat landscape is constantly evolving, and we must work jointly in the establishment and implementation of a robust entry and exit system,” he added.

One of the advanced-level monitoring and clearance technologies adopted by developed countries is the Internet of Things (IoT), which utilizes sensors and processing software for seamless and real-time data across a network of devices.

These include smart video monitoring, smart kiosks, surveillance drones, and even mobile apps, which have presented new opportunities in border management operations.

According to Omollo, Kenya’s plan to keep up with the pace of innovation in this sector will not only expand its border patrol security capabilities but also facilitate legitimate cross-border trade.

“Now, more than ever, we are obligated to perceive our entry and exit systems through a national security lens,” he said.

He lauded the support networks propagated through BCOCC, a joint team of representatives from various law enforcement agencies, established in 2014 to formulate policies and programs for the management of border control checkpoints.

So far, the committee has fostered collaboration among the various law enforcement agencies and minimized the use of forged travel documents, illegal migration, human trafficking, smuggling of weapons, trafficking of narcotics and laundering of money among other crimes across the country’s borders.

Source: The Star

Kenya Eyes a Larger Piece of the Indian Tourism Market

Nairobi — Kenya has unveiled a fresh bid to increase the number of tourists visiting from India as the Kenya Tourism Board (KTB) leads travel trade members to this year’s Outbound Travel Mart (OTM) tourism fair in the country.

The expo to be held at the Jio World Convention Centre, in Mumbai from February 2-4, will bring together exhibitors from over 60 countries as destinations globally smart out of the impact of Covid-19 pandemic.

Over 14 Kenyan travel trade partners will take part in the 3 -day exhibitions with the country seeking to reposition itself in the Indian market whose growth has picked up to about 90 per cent by the close of last year compared to 2021.

Kenya Tourism Board (KTB) acting CEO John Chirchir says OTM is giving Kenya an opportunity for re-entry into the Indian market that was severely affected with travel because of Covid-19 pandemic.

“India is one of the markets whose travel was negatively impacted with the Covid-19, we are now making a physical presence in the market after about 2 years of absence, and we hope to reap big from the fair,” said Chirchir.

The OTM tourism fair is the largest gathering of travel trade buyers and professionals in India with over 1300 exhibitors from over 60 countries attending.

Kenya’s participation in this event will allow it to tap into the growing Indian tourism market and promote its offerings to Indian travelers.

In 2022, the arrivals into Kenya from the Indian source market recorded a growth of 93.2 per cent from 42,159 in 2021 to 81,458 in 2022.

This is a recovery of 67 per cent compared to the 2019 performance of 120,893.

Chirchir says the growth is a positive indication that the tourism business in India is on the right track to recovery even as KTB rolls out key promotional and marketing campaigns in the market.

Ahead of the expo, KTB will also participate in roadshows in the three Indian cities of Ahmedabad, Bangalore and New Delhi between January 30 and February 6.

“These are part of our many initiatives to bring the market back to its performance recorded before the Covid-19 pandemic. Attributes such as ease of access and connectivity, all-weather season as well as tourism offerings that cut across all the segments have continued to pull Indian travelers to Kenya,” said the CEO.

Last year, KTB hosted a familiarization trip in Nairobi for India’s leading travel companies, launched joint promotional campaigns with marketing companies such as FCM Travel Solutions India and Yatra to build traveler confidence.

Source: Capital Business

Firms fight for exclusive rights at Zanzibar airport terminal

The saga involving exclusive rights for access to a new terminal granted by the Zanzibar Airports Authority (ZAA) to Dubai National Air Travel Agency (Dnata) took a new twist Tuesday after another company filed a case at the High Court of Tanzania.

Transworld Aviation Limited submitted a petition at the High Court of Tanzania challenging the granting of exclusive rights to Dnata.

However, a legal wrangle ensued as soon as the case came up Tuesday, compelling Judge Sekela Moshi to prematurely recuse herself from handling the matter.

On September 14, 2022, ZAA issued a directive which gave the Dubai-based company exclusive access to the new terminal which was constructed at a cost of $120 million.

Order to vacate terminal

The order by ZAA gave ground handling firms that used to operate at Zanzibar’s Abeid Amani Karume International Airport until December 1, 2022 to vacate the newly constructed Terminal III, and instructed airlines to plan to work with Dnata.

Speaking shortly after filing the lawsuit, Transworld Aviation’s legal and investment director Peter Madeleka said that the Tanzania Civil Aviation Authority (TCAA) and the Attorney-General are the first and second respondents respectively.

“The Transworld Aviation, the applicant in this matter, has brought an application at the High Court of Tanzania’s main registry for the purpose of seeking court orders of mandamus, sociale and prohibition,” he explained.

According to Madeleka, they were taken by surprise as the respondents came with an objection saying the matter was a waste of the court’s precious time.

“We were of the view that it was improper for any issue which is to be determined by the court to be brought at this very early stage of mentioning,” Mdekela urged.

No confidence in judge

Through lawyer Mdekela, Transworld Aviation expressed lack of confidence with Judge Moshi who was presiding over the application.

“We asked the presiding judge to recuse herself because the applicant had no confidence in her, and we thank God that the judge has disqualified herself from determination of that particular application,” he noted.

With the exclusive rights granted to Dnata on September 14, 2022, it is reported that airlines that ply the Zanzibar route have already started withdrawing from the existing ground handlers as directed by ZAA.

Details that The Citizen has seen indicated that Transworld was the first victim of the directive after two airlines it was serving gave notices of stopping using its services.

In November 2021, Dnata signed a contract with authorities in Zanzibar to provide ground handling services at newly built Terminal 3 at the airport.

As part of the contract, two other Emirates’ subsidiaries, Emirates Leisure Retail and MMI, will operate all 13 retailers and two lounges in the terminal. These include restaurants, duty free and commercial outlets.

Source: The East African

Social Media’s Rising Influence on the Travel Industry

Social media has been around for over a decade now, but its influence over our decision making and buying preferences continues to grow. As travel is an inherently social activity, this influence is particularly present for our industry.

Consumers are constantly inspired by stunning landscapes, compelling food, and adventurous experiences online, presenting an opportunity for brands to connect and amplify their messages to reach a larger audience. As new social platforms emerge, the importance of engaging with travelers in the areas they are looking for inspiration only grows.

Social media as a source of inspiration

While family, friends, and travel providers are the most popular sources of travel inspiration, our 2023 Traveler Value Index showed that social media is right behind them, with 35% of consumers saying they use social for travel inspiration. The use of social media as travel inspiration surpassed more traditional outlets, such as travel agents (29%), media publications such as newspapers or magazines (26%), and entertainment, like TV shows and movies (25%).

But the influence of social media is much more present when you look at younger generations. For consumers under the age of 40, 50% of them say they use social media as a source for inspiration, a very close second to family (52%). For Gen Z, social media is the number one most popular source of inspiration, with 53% saying they turn to social for inspiration, meaning a strong social presence is essential for connecting with younger travelers.

Taking a regional look, consumers from South Africa and Mexico are particularly influenced by social. In South Africa, 59% of consumers look to social for inspiration and 54% in Mexico.

Crafting successful social media campaigns

To connect with travelers finding inspiration on their social feeds, creating fresh, innovative, and authentic social media campaigns is key. This helps your brand not only get in front of travelers but stand out in a way that will be memorable. We’ve worked with many brands to develop social media campaigns and strategies that resonate and use social channels to amplify other creative elements of campaigns.

Destination Canada explores TikTok

Destination Canada, the NTO (National Tourism Organization) for Canada, worked with our team to leverage Expedia Group’s social media channels, including TikTok, in a summer social media campaign targeting travelers from key U.S. states.

The 15-second TikTok video featured the Top 5 Things Not to Miss in Canada, including the country’s most exciting sights and experiences such as its stunning lakes, lush rainforests, and iconic Toronto cityscape. The social video drove impressive results, reaching over 2 million users from key U.S. markets and generating over 3.5 million impressions, further proving bite-sized social content can create big impact for marketing campaigns.

Abu Dhabi creates an immersive experience, promoted through social

Our campaign with the Abu Dhabi Department of Culture and Tourism took a more immersive approach by following the adventures of social media influencer, Ellie, as she explored Abu Dhabi. Our in-house creative agency developed an original video episode for “The Next Turn” series. In the “City of Surprises” episode, travel shoppers can watch, explore, and book, all on the same page to effectively connect inspiration with a shoppable booking experience.

The video is amplified through social media, utilizing short trailers to hook viewers and entice them to learn more. Ellie is also sharing the content on her social channels, further expanding the message to her trusted audience and encouraging bookings.

Using social media marketing for travel inspiration and influence

By using our social media solutions for travel marketing, you can take advantage of a highly targeted audience of travelers across our brands like Expedia, Vrbo and Hotels.com. Some of the solutions we offer include:

  • Social integration packages to transform standard ads into a native social experience across traveler’s social feeds.
  • Instagram stories, which motivate travelers who are seeking inspiration and increase engagement with your brand.
  • Co-branded videos that capture traveler interest with compelling video content.
  • Custom social promotion across multiple platforms to create the most engaging social experience while telling your brand story.

These social media solutions are set up to help your brand stand out in our highly engaged travel community. As the popularity of social media continues to rise and travelers look to new platforms for

Source: Hospitality.net

IATA notes reasons to be optimistic in 2023 but says profits still ‘razor thin’

With airlines continuing to cut pandemic-related losses in 2022, the global airline industry is expected to finally return to profitability in 2023, a recent outlook released by the International Air Transport Association (IATA) suggests.  

How much will the airline industry lose in 2022?  

IATA estimates that airline net losses will stand at approximately $6.9 billion at the end of 2022 compared $42.0 billion and $137.7 billion recorded in 2021 and 2020 respectively, IATA noted in the outlook, which was released on December 6, 2022.  

The association also expects an 8.4% increase in passenger traffic compared to last year, leading to a significant increase in passenger revenues, reaching $438 billion compared to $239 billion in 2021.   

Overall revenues are expected to grow by 43.6% compared to 2021, reaching an estimated $727 billion, IATA added.  

According to IATA’s Director General Willie Walsh, despite facing rising operating costs, labor shortages, strikes, and other disruptions across the world’s key hubs during 2022, airlines still managed to cut losses due to an increased demand for air travel.  

Air cargo played a key role for air carriers in cutting losses, with IATA predicting that cargo-related revenues will almost double to a total of $201.4 billion compared to $100.8 billion in 2019.  

“We will end the year at about 70% of 2019 passenger volumes. But with yield improvement in both cargo and passenger businesses, airlines will reach the cusp of profitability,” Walsh said.  

Improvement despite growing economic uncertainties   

In 2023 airlines will witness the first financial recovery and will be able to gain their first profit since 2019, IATA’s analysts said.   

Air carriers are expected to record a net profit of around $4.7 billion in 2023. However, growth will remain a low improvement in comparison to an industry profit of $26.4 billion posted in 2019.  

“This expected improvement comes despite growing economic uncertainties as global GDP growth slows to 1.3% (from 2.9% in 2022),” the report added.   

However, according to Walsh, the expected profits for 2023 are “razor thin”.  

“Despite the economic uncertainties, there are plenty of reasons to be optimistic about 2023. Lower oil price inflation and continuing pent-up demand should help to keep costs in check as the strong growth trend continues. At the same time, with such thin margins, even an insignificant shift in any one of these variables has the potential to shift the balance into negative territory. Vigilance and flexibility will be key,” Wash explained.  

IATA’s experts say that high passenger demand will become the main driver to achieve the first profitable year after the pandemic downturn. Global passenger numbers are predicted to grow to 85.5% of 2019 levels. This will generate approximately $552 billion in airline industry revenues.   

“Much of this expectation takes into account the uncertainties of China’s Zero COVID policies which are constraining both domestic and international markets. Nonetheless, passenger numbers are expected to surpass the four billion mark for the first time since 2019, with 4.2 billion travelers expected to fly,” IATA said.  

Global air cargo market could face “increased pressure”  

Meanwhile, the global air cargo market could come “under increased pressure”. Estimated revenues are expected to stand at 149.4 billion, which is $52 billion less than in 2022. However, such a performance will still be $48.6 billion stronger than recorded by airlines in 2019.   

“With economic uncertainty, cargo volumes are expected to decrease to 57.7 million tonnes, from a peak of 65.6 million tonnes in 2021. As belly capacity grows in line with the recovery in passenger markets, yields are expected to take a significant step back,” according to the association data.  

“IATA expects a fall of 22.6% in cargo yields, mostly in the latter part of the year when the impact of inflation-cooling measures is expected to bite. To put the yield decline in context, cargo yields grew by 52.5% in 2020, 24.2% in 2021, and 7.2% in 2022. Even the sizable and expected decline leaves cargo yields well-above pre-COVID levels,” IATA concluded.  

Source: Aerotime Hub