When Will Air Travel Return to Pre-Pandemic Levels?
Many industries were hit hard by the global pandemic, but it can be argued that air travel suffered one of the most severe blows.
The aviation industry as a whole suffered an estimated $370 billion loss in global revenue because of COVID-19. And while air travel has been slowly recovering from the trough, flight passenger traffic has yet to fully bounce back.
Where is the industry at in 2022 compared to pre-COVID times, and when is air passenger travel expected to return to regular levels? This graphic by Julie R. Peasley uses data from IATA to show current and projected air passenger ridership.
Air Travel Traffic: 2021 and 2022
After an incredibly difficult 2020, the airline industry started to see significant improvements in travel frequency. But compared to pre-pandemic levels, there’s a lot of ground to cover.
In 2021, overall passenger numbers only reached 47% of 2019 levels. This influx was largely driven by domestic travel, with international passenger numbers only reaching 27% of pre-COVID levels.
|Passenger numbers (% of 2019)||2021||2022|
From a regional perspective, Central America experienced one of the fastest recoveries. In 2021, overall passenger numbers in the region had reached 72% of 2019 levels, and they are projected to reach 96% by the end of 2022.
In fact, the Americas as a whole has seen a quick recovery. Both North America and South America also reached above 50% of 2019 ridership in 2021, and are projected to reach 94% and 88% ridership in 2022, respectively.
On the opposite end of the spectrum, Asia Pacific has experienced the slowest recovery. This is likely due to stricter lockdowns and travel restrictions put into effect in this region (which was harder hit by SARS in 2003), especially in places like Shanghai.
Forecasting Traffic in 2023 and Beyond
While recovery has looked different from region to region, airlines are largely expected to see a full recovery to their ridership levels by 2025.
|Forecasted Passengers (% of 2019)||2023||2024||2025|
This recovery is a signifier of a much broader mindset shift, as governments continue to reassess their COVID-19 management strategies.
But while the future seems promising, IATA stressed that the forecast does not take into account the potential impact of the Russia-Ukraine conflict and other geopolitical concerns, which could have far-reaching consequences on the global economy (and travel) in the coming years.
This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.
Charted: The Dipping Cost of Shipping
After a dramatic spike during the pandemic, shipping costs have now fallen back to Earth. What does that mean for shippers and the economy?
The Dipping Cost of Shipping
A little over one year ago, congestion at America’s West Coast ports were making headlines, and the global cost of shipping containers had reached record highs.
Today, shipping costs have come back down to Earth, with some routes approaching pre-pandemic levels. The graphic above, using data from Freightos, shows just how dramatically costs have fallen in a short amount of time.
The Freightos Baltic Index (FBX)—a widely recognized benchmark for global freight rates—has fallen 80% since its peak in late 2021.
|Shipping Route||Peak Price (Last 90 days)||Recent Price||Change|
|East Asia -> North America West||$2,702||$1,323||-51%|
|North America West -> East Asia||$1,037||$805||-22%|
|East Asia -> North America East||$6,296||$2,812||-55%|
|East Asia -> North Europe||$4,853||$2,978||-39%|
|North America East -> North Europe||$850||$552||-35%|
|North Europe -> North America East||$7,102||$5,507||-22%|
Why Shipping Costs Matter
The vast majority of trade is conducted over the world’s oceans, so skyrocketing shipping costs can wreak havoc on the global economy.
A recent study from the IMF, which included 143 countries over the past 30 years, found that shipping costs are an important driver of inflation around the world. In fact, when freight rates double, inflation increases by 0.7 of a percentage point.
Of course, some nations feel the effects of higher shipping costs more acutely than others. Countries that import more of what they consume and that are more integrated into the global supply chain are more likely to see inflation rise as shipping costs elevate.
Falling Freight Rates Are a Good Thing, Right?
Falling shipping costs are great news for everyone except, well…shippers.
While most of us can eventually look forward to improved supply chain efficiency and less inflationary pressure, shipping companies are seeing the end of a two-year boom period.
For example, major shippers like COSCO and Hapag-Lloyd saw a staggering 10x or more increase in profit per 20-foot equivalent unit (TEU) shipped.
For the time being, carriers are canceling voyages and sending obsolete ships to scrap to keep prices from bottoming out completely. In early January, container spot freight rates rose for first time in 43 weeks, signaling that the rollercoaster ride that shipping rates have been on since the start of the pandemic may be coming to an end.
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