In the last few years, aviation sector had been dealing with quite tough times, and the years 2021 and 2022 saw a worst hit as the result of pandemic situation. The middle of 2022 has seen improvements in the aviation sector with more of optimism with increased demand in the capacity and sales of flight tickets. In fact, the level of optimism shall continue all through the year 2023, although the challenges will be there in terms of staffing, pricing and the high rates of inflation.
On Going Demand for Traveling Despite Challenges
Despite the fact that there are challenges across staffing and pricing, travel demand continues to remain and may even become stronger. The statistics of World Economic Forum show that flights in Europe has reached to the levels of almost 86% on the pre-pandemic levels of the year 2022. This overgrown and continuously rising demand is offering great confidence to majority of carriers including the Low Cost Carriers (LCC) and the Ultra-Low Cost Carriers (ULCC) respectively.
Although there might be events of downturns in the year 2023 in aviation due to inflation and rising costs across the globe, but the calculations and forecasts clearly point that aviation sector shall continue to recover and gain strength. According to the IATA, by 2023 year end most of the areas will either stay at or cross over the pre-pandemic demanding levels.
IATA is also expecting that the aviation will show a profitable come back in the 2023. According to Krungsri Report:
- There will be substantial increase in the income as the international and domestic flights shall grow. Most of the airport operators shall also likely to gain as the result of their strong monopoly positions in terms of passenger charges as well as the aircraft service charges. Furthermore, the airport operators shall receive immense benefits from the government spending and subsidies.
- There is expected rise in the passenger flight bookings and excessive demand for the cargo services. Both these areas are the intended beneficiaries, which will help in the growth. More importantly, additional income will come from unprecedented growth in warehousing as well as the distribution.
- The increased recovery in manufacturing and trade, and enduring growth in e-commerce shall help in growth of air freight services. This growth shall also increase after partnering with logistics operators, which are likely to offer broad customer base as well as steady demand.
On an overall basis, the year 2023 could be visualized as the year of profitable returns for the aviation sector. The demands for domestic and international flights shall increase and this could be seen in parallel to the rising demand for tourism. There are good number of changes likely to occur in the aviation industry in the year 2023.