– Asia will drive growth of passenger air travel in 2023 propelled by recent reopening in China
– Lease rates expected to increase and positive outlook for aircraft long-term values
– Supply side constraints not passenger demand the limiting factor for airlines
DUBLIN–(BUSINESS WIRE)–The aviation sector is set to thrive in 2023 with global traffic to reach pre-pandemic levels by June, according to a paper published today by international aircraft leasing company Avolon.
After a 70% recovery in passenger traffic last year led by recovery in Europe and North America, Asia will drive growth in 2023, helped by the recent reopening in China. For every two seats of airline capacity added in the world today one is in Asia.
The traffic recovery brought the sector back to the brink of profitability in 2022, after combined sector losses of $180bn in 2020 and 2021. A profit of c.$4.7bn is forecast for 2023 as recovery continues.
Avolon�s 2023 Outlook: Climb to Cruise paper, available here reviews trends in the sector for airlines, manufacturers, and lessors. Key findings include:
Andy Cronin, CEO of Avolon commented:
Aviation has demonstrated its resilience and is ready to thrive having come through a pandemic-driven two-thirds drop in traffic. Airlines, manufacturers, and lessors share an ecosystem that creates opportunities for all but requires collaboration to overcome key challenges including a higher interest rate environment, limited aircraft availability and the need to make further progress on decarbonisation goals.
The rebound in 2022 is set to continue in 2023, with Chinas reopening helping to drive global traffic levels to pre-pandemic levels by June. Airlines are enjoying higher fares and load factors, and manufacturers are under pressure to ramp up production quicker. Whilst geopolitical and macroeconomic risks remain, this is a positive environment for lessors as supply constraints drive higher lease rates and increase the value of order books.
The paper – co-authored by Avolons Chief Risk Officer, Jim Morrison, and Head of Counterparty Risk & Sustainability, Rosemarie OLeary makes seven forecasts:
Fearless Forecasts 2023
ENDS
About Avolon
Headquartered in Ireland, with offices in the United States, Dubai, Singapore, Hong Kong and Shanghai, Avolon provides aircraft leasing and lease management services. Avolon is 70% owned by an indirect subsidiary of Bohai Leasing Co., Ltd., a public company listed on the Shenzhen Stock Exchange (SLE: 000415) and 30% owned by ORIX Aviation Systems, a subsidiary of ORIX Corporation which is listed on the Tokyo and New York Stock Exchanges (TSE: 8591; NYSE: IX). Avolon is a global leader in aircraft leasing with an owned, managed and committed fleet, as of 31 December 2022 of 835 aircraft. www.avolon.aero
Disclaimer
The views and forecasts set forth herein and in the 2023 Outlook are those of the authors. They do not necessarily represent the views of any other person or Avolon. This document and any other materials contained in or accompanying this document (collectively, the Materials) are provided for general information purposes only. The Materials are provided without any guarantee, condition, representation or warranty (express or implied) as to their adequacy, correctness or completeness. Any opinions, estimates, commentary or conclusions contained in the Materials represent the judgement of the authors as at the date of the Materials and are subject to change without notice. The Materials are not intended to amount to advice on which any reliance should be placed and Avolon disclaims all liability and responsibility arising from any reliance placed on the Materials.
Contacts
Doug Keatinge
Head of Communications
dkeatinge@avolon.aero
M: +353 86 037 4163
Jonathan Neilan
FTI Consulting
avolon@fticonsulting.com
M: +353 86 231 4135
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