Buoyed by strong domestic demand and an appetite for international leisure travel, the latest figures published by Eurocontrol show that traffic within Europe has now recovered to about 85% of 2019 levels, with Norway, Greece, Turkey and Spain exceeding 90%.
Speaking during the first day of Routes Europe on Wednesday, ACI Europe deputy director general Morgan Foulkes said the removal of travel restrictions coupled with short- and medium-haul leisure demand means a “bullish” few months are imminent.
Europe’s LCCs are obvious beneficiaries of the rebound and continue to ramp up capacity accordingly, but legacy airlines are seeing welcome signs too. Air France-KLM, International Airlines Group and Lufthansa Group each pointed to positive booking and capacity trends in their recent results.
Air France-KLM CEO Ben Smith this month highlighted a significant increase for corporate and premium traffic, complementing the already strong leisure and VFR segments. He also expects a “healthy yield environment” for the rest of the year.
This optimism can be felt across the meeting halls here in Bergen at Routes Europe 2022. Conversations have moved away from recapturing what was lost, to discussions about growth that will stimulate tourism, reunite friends and families, and boost trade.
And the impact of this cannot be understated. For Europe’s travel and tourism sector alone, the World Travel & Tourism Council estimates that it will create nearly eight million new jobs within the next decade and be a driving force in the region’s economic recovery.
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With an average annual growth rate of 3.3%, the sector is expected to swell at twice the rate of the overall economy, which is forecast to expand by just 1.5% annually. As such, Europe’s travel and tourism GDP is forecast to grow by 31.4% to €1.73 trillion ($1.82 trillion) over the next 10 years.
There’s no doubt that the region’s airlines, airports and destinations have been severely damaged over the past two years and more twists and turns are sure to await. With rising inflation and a spike in fuel prices following Russia’s invasion of Ukraine, the outlook beyond the immediate future remains difficult to predict.
As SAS president and CEO Anko van der Werff told Routes Europe delegates, the “real test” will come after people return from their vacations in August, highlighting that the demand picture for the winter season remains clouded.
The industry is still on a recovery path but the air services being discussed this week will go a long way to furthering the momentum building this summer, helping to ensure the industry remains at the heart of global economic growth.
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