Global aviation capacity forecast to reach 96% of pre-pandemic levels in 2023
February 14, 2023 – The fourth quarter of 2022 wrapped up the corporate travel industry’s year of recovery, kept buoyant by strong growth in Q2 and Q3, with FCM Consulting’s latest Global Quarterly Trend Report forecasting global aviation to be back to 96% of pre-pandemic levels in 2023.
The report showed that Q4-2022 seat capacity saw an 18% increase on Q4-2021 and was 13% down on Q4-2019. It also highlighted a minor slowdown in seat growth in Q4, with the 2022 full-seat capacity up 31% on 2021, but still down 17% on 2019.
Airfares are also staying strong with global international business class fares in 2022 on average 15% more than 2019. Discount economy class fares were on average 12% higher in 2022 than they were in 2019.
Predicting full-year 2023 seat capacity is a very long range forecast, nonetheless, airline schedules are offering just 4% less seats than in 2019. Q2-2023 heading into Northern Hemisphere summer shows optimistic travel signals, said FCM Consulting General Manager Felicity Burke.
In Q4-2022, China was preparing to open its borders, and has since reopened. At the time of the Global Quarterly Trend Report being produced, Asia had increased airline seats offered – up 17% – from Q4-2022 to Q1-2023.
Distribution will continue to be a hot topic in the North American market, with major carrier content cutover deadlines looming, said Ashley Gutermuth, Director, FCM Consulting. We will have to keep a close eye on what this will do to ticket prices, especially on historically corporate heavy routes.
Since FCM Consulting’s last report in October 2022, the top 20 global corporate airlines have reduced their forward schedules by 3%. The current global forecast across these airlines is an average of 10% seat growth from H2-2022 to H1-2023.
With respect to accommodation, the fourth quarter of 2022 saw North America leading all regions in terms of increased average room rates versus 2019 with an 11% (USD$25) increase followed by Australia and New Zealand which were up 6% (USD$17).
North America will still be leading the charge on airline capacity recovery in the first quarter of 2023, sitting at 101% of 2019 volume. Airfares from 11 months of 2022 versus the same period in 2019 saw a 10% fare increase in both business and discounted economy tickets. American Airlines and United Airlines are forecast to return to 2019 levels in H1-2023.
In terms of accommodation, 2022 saw hotel average rooms rates surpass those in 2019 – up 11% (USD$25) – with hotel occupancy sitting at 95 per cent (indexed to 2019, full-year 2022). Chicago booked a rise of 13% in Average Rate Paid when compared to Q3-2022, while Vancouver registered a 26% drop.
Growth in Europe has remained restricted, with the first quarter of 2023 sitting at 89% of 2019 volume, but that is still a 6% increase on availability in Q4-2022.
Airfares from 11-months of 2022 versus same period 2019 saw a 10% fare increase in business and an 11% rise in discounted economy tickets. British Airways are forecast to be at 86% capacity in 2023, with Virgin Atlantic at 95%.
2022 saw hotel average rooms rates 5% below (down USD$9) pre-COVID averages, with hotel occupancy sitting at 89% (indexed to 2019, full-year 2022). London saw a drop of 7% in Average Rate Paid when compared to Q3-2022, with Amsterdam up 7%.
Q1-2023 forecasts indicate Asia with 94% of 2019 seat volume – up 17% on Q4-2022. Airfares from 11-months of 2022 versus same period 2019 saw a 24% fare rise in business and a 13% rise in discounted economy tickets. Singapore Airlines are forecast to be at 92% capacity in 2023, with Cathay Pacific at 89%.
In terms of accommodation, 2022 saw hotel average rooms rates drop 22% (USD$17) below pre-COVID regional averages, with hotel occupancy sitting at 80% (indexed to 2019, full-year 2022). Chennai saw a rise of 29% in Average Rate Paid when compared to Q3-2022, with Manila down 21%.
Australia and New Zealand
The recovery in Australia and New Zealand continues to pick up pace with the first quarter of 2023 sitting at 90% of 2019 volume – a 7% increase on availability in Q4-2022.
Airfares from 11-months of 2022 versus same period 2019 saw a 15% fare increase in business and a 12% rise in discounted economy tickets. Qantas are forecast to be at 96% capacity in 2023, with Virgin Australia at 89%.
In the accommodation world, 2022 saw hotel average rooms rates 6% (USD$17) above the pre-COVID averages, with hotel occupancy sitting at 85% (indexed to 2019, full-year 2022). Auckland saw a jump of 24% in Average Rate Paid when compared to Q3-2022, with Sydney down 1%.
*The FCM Consulting quarterly report draws on global data sourced from FCM bookings, for travel during October to December 2022 (Q4-2022). The report uses Cirium aviation data as at January 17, 2023. Airfare variations exclude all taxes.
The average room rate (ARR) quoted for regional accommodation is the average booked rate using FCM and Flight Centre Travel Group corporate booking data. Variations in rates booked, are a reflection of seasonality, supply and demand, corporate booking lead times and subtle variations in exchange rates. Unless otherwise stated all fares and rates are reported in US dollars. STR hotel data and content quoted is dated January 23, 2023.*