Markets

When Will Air Travel Return to Pre-Pandemic Levels?

Published

2 months ago

December 7, 2022

Julie R. Peasley

Featured Creator

Article/Editing:

Carmen Ang

when will air travel return to pre-pandemic levels?

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
International	27%	69%
Domestic	61%	93%
Africa	46%	76%
Asia Pacific	40%	68%
Caribbean	44%	72%
Central America	72%	96%
Europe	40%	86%
Middle East	42%	81%
North America	56%	94%
South America	51%	88%
Industry-wide	47%	83%

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
International	82%	92%	101%
Domestic	103%	111%	118%
Africa	85%	93%	101%
Asia Pacific	84%	97%	109%
Caribbean	82%	92%	101%
Central America	102%	109%	115%
Europe	96%	105%	111%
Middle East	90%	98%	105%
North America	102%	107%	112%
South America	97%	103%	108%
Industry-wide	94%	103%	111%

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.

Related Topics:tourism air travel pandemic economy COVID impact aviation pandemic impact air traffic

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Markets

Charted: Tesla’s Unrivaled Profit Margins

This infographic compares Tesla’s impressive profit margins to various Western and Chinese competitors.

Published

2 days ago

February 3, 2023

Marcus Lu

Chart: Tesla’s Unrivaled Profit Margins

In January this year, Tesla made the surprising announcement that it would be cutting prices on its vehicles by as much as 20%.

While price cuts are not new in the automotive world, they are for Tesla. The company, which historically has been unable to keep up with demand, has seen its order backlog shrink from 476,000 units in July 2022, to 74,000 in December 2022.

This has been attributed to Tesla’s robust production growth, which saw 2022 production increase 41% over 2021 (from 930,422 to 1,313,851 units).

With the days of “endless” demand seemingly over, Tesla is going on the offensive by reducing its prices—a move that puts pressure on competitors, but has also angered existing owners.

Cranking up the Heat

Tesla’s price cuts are an attempt to protect its market share, but they’re not exactly the desperation move some media outlets have claimed them to be.

Recent data compiled by Reuters shows that Tesla’s margins are significantly higher than those of its rivals, both in terms of gross and net profit. Our graphic only illustrates the net figures, but gross profits are also included in the table below.

Company	Gross profit per car	Net profit per car
🇺🇸 Tesla	$15,653	$9,574
🇺🇸 GM	$3,818	$2,150
🇨🇳 BYD	$5,456	$1,550
🇯🇵 Toyota	$3,925	$1,197
🇩🇪 VW	$6,034	$973
🇰🇷 Hyundai	$5,362	$927
🇺🇸 Ford	$3,115	-$762
🇨🇳 Xpeng	$4,565	-$11,735
🇨🇳 Nio	$8,036	-$19,141

Data from Q3 2022

Price cutting has its drawbacks, but one could argue that the benefits for Tesla are worth it based on this data—especially in a critical market like China.

Tesla has taken the nuclear option to bully the weaker, thin margin players off the table.
– Bill Russo, Automobility

In the case of Chinese EV startups Xpeng and Nio, net profits are non-existent, meaning it’s unlikely they’ll be able to match Tesla’s reductions in price. Both firms have reported year-on-year sales declines in January.

As for Tesla, Chinese media outlets have claimed that the firm received 30,000 orders within three days of its price cut announcement. Note that this hasn’t been officially confirmed by anyone within the company.

Tit for Tat

Ford made headlines recently for announcing its own price cuts on the Mustang Mach-E electric SUV. The model is a direct competitor to Tesla’s best-selling Model Y.

Chevrolet and Hyundai have also adjusted some of their EV prices in recent months, as listed in the following table.

Model	Old Price	New Price	Discount
Tesla Model Y Long Range	$65,990	$53,490	18.9%
Chevrolet Bolt EUV 2023	$33,500	$27,200	18.8%
Tesla Model Y Performance	$69,990	$56,990	18.6%
Chevrolet Bolt 2023	$31,600	$26,500	16.1%
Tesla Model 3 Performance	$62,990	$53,990	14.3%
Hyundai Kona Electric 2022	$37,390	$34,000	9.1%
Ford Mustang Mach-E GT Extended Range	$69,900	$64,000	8.4%
Tesla Model 3 Long Range	$46,990	$43,990	6.4%
Ford Mustang Mach-E Premium AWD	$57,675	$53,995	6.4%
Ford Mustang Mach-E RWD Standard Range	$46,900	$46,000	1.9%

Source: Observer (Feb 2023)

Volkswagen is a noteworthy player missing from this table. The company has been gaining ground on Tesla, especially in the European market.

We have a clear pricing strategy and are focusing on reliability. We trust in the strength of our products and brands.
– Oliver Blume, CEO, VW Group

This decision could hamper Volkswagen’s goal of becoming a dominant player in EVs, especially if more automakers join Tesla in cutting prices. For now, Tesla still holds a strong grip on the US market.

tesla US market share

Thanks, Elon

Recent Tesla buyers became outraged when the company announced it would be slashing prices on its cars. In China, buyers even staged protests at Tesla stores and delivery centers.

Recent buyers not only missed out on a better price, but their cars have effectively depreciated by the amount of the cut. This is a bitter turn of events, given Musk’s 2019 claims that a Tesla would be an appreciating asset.

I think the most profound thing is that if you buy a Tesla today, I believe you are buying an appreciating asset – not a depreciating asset.
– Elon Musk, CEO, Tesla

These comments were made in reference to Tesla’s full self-driving (FSD) capabilities, which Elon claimed would enable owners to turn their cars into robotaxis.