**media**
IATA: Omicron restrictions dampen demand
By EMMIE V. ABADILLA
Travel restrictions in the wake of the Omicron variant hampered recovery in both domestic and international air travel in the first month of 2022, according to the International Air Transport Association (IATA)'s latest data.
Total demand for air travel in January 2022 (measured in revenue passenger kilometers or RPKs) rose 82.3 percent versus January 2021.
However, it was down 4.9 percent compared to the previous month (December 2021) on a seasonally adjusted basis.
January domestic air travel was up 41.5 percent compared to the year-ago period but fell 7.2 percent compared to December 2021 on a seasonally adjusted basis.
International RPKs rose 165.6 percent versus January 2021 but fell by 2.2 percent month-on-month between December 2021 and January 2022 on a seasonally adjusted basis.
Still, “The recovery in air travel continued in January, despite hitting a speed bump called Omicron," says Willie Walsh, IATA’s Director General.
"Strengthened border controls did not stop the spread of the variant. But where population immunity was strong, the public health systems were not overwhelmed," he pointed out.
"Many governments are now adjusting COVID-19 polices to align with those for other endemic viruses. This includes lifting travel restrictions that have had such a devastating impact on lives, economies and the freedom to travel,” according to Walsh.
Asia-Pacific airlines saw their January international traffic climb 124.4 percent compared to January 2021, down significantly from the 138.5 percent gain registered in December 2021 versus December 2020.
Capacity rose 54.4 percent and the load factor was up 14.7 percentage points to 47.0 percent, still the lowest among regions.
Middle Eastern airlines had a 145.0 percent demand rise in January compared to January 2021, well down compared to the 178.2 percent increase in December 2021, versus the same month in 2020.
January capacity rose 71.7 percent versus the year-ago period, and load factor climbed 17.5 percentage points to 58.6 percent.
North American carriers experienced a 148.8 percent traffic rise in January versus the 2021 period, significantly decreased versus the 185.4 percent rise in December 2021 compared to December 2020.
Capacity rose 78.0 percent, and load factor climbed 17.0 percentage points to 59.9 percent.
Latin American airlines saw a 157.0 percent rise in January traffic, compared to the same month in 2021, an upturn over the 150.8 percent rise in December 2021 compared to December 2020.
January capacity rose 91.2 percent and load factor increased 19.4 percentage points to 75.7 percent, which easily was the highest load factor among the regions for the 16th consecutive month.
European carriers’ January international traffic rose 225.1 percent versus January 2021, which was up slightly compared to a 223.3 percent increase in December 2021 versus the same month in 2020.
Capacity rose 129.9 percent and load factor climbed 19.4 percentage points to 66.4 percent.
African airlines’ traffic rose 17.9 percent in January 2022 versus a year ago, a slowdown compared to the 26.3 percent year-over-year increase recorded in December 2021.
January 2022 capacity was up 6.3 percent and load factor climbed 6.0 percentage points to 60.5 percent.
In the domestic front, Japan’s domestic demand was 107
percent, the fastest year-on-year growth recorded, although on a seasonally adjusted basis, January 2022 traffic slipped 4.1 percent from December.
India’s domestic RPKs fell by 18 percent year-on-year in January, the biggest decline recorded for any of the domestic markets tracked by IATA.
On a month-on-month basis, seasonally adjusted RPKs dropped by nearly 45 percent between December and January.
Despite the strong traffic growth recorded in January 2022 compared to a year ago, passenger demand remains far below pre-COVID-19 levels.
Total RPKs in January were down 49.6 percent compared to January 2019. International traffic was down 62.4 percent , with domestic traffic off by 26.5 percent .
January figures do not include any impact from the Russia-Ukraine conflict which began at the end of February.
The resulting sanctions and airspace closures are expected to have a negative impact on travel, primarily among neighboring countries.
The Ukraine market accounts for 3.3 percent of European passenger traffic and 0.8 percent of global traffic in 2021.
The Russian international market represents 5.7 percent of European traffic (excluding Russia domestic market) and 1.3 percent of global traffic in 2021.
Airspace closures have led to rerouting or cancellations of flights on some routes, mostly in the Europe-Asia but also in Asia-North America market.
This impact is mitigated owing to greatly diminished flight activity since borders in Asia were largely closed owing to COVID-19.
In 2021, RPKs flown between Asia-North America and Asia-Europe accounted for 3.0 percent and 4.5 percent, respectively, of global international RPKs.
In addition to these disruptions, the sudden spike in fuel prices is putting pressure on airline costs.
“When we made our most recent industry financial forecast last autumn, we expected the airline industry to lose $11.6 billion in 2022 with jet fuel at $78/barrel and fuel accounting for 20% of costs," according to Walsh.
"As of 4 March, jet fuel is trading at over $140/barrel. Absorbing such a massive hit on costs just as the industry is struggling to cut losses as it emerges from the two-year COVID-19 crisis is a huge challenge," he stressed.
"If the jet fuel price stays that high, then over time, it is reasonable to expect that it will be reflected in airline yields,” Walsh maintained.