The aviation and travel industries were among the hardest hit during the global Covid-19 pandemic. But, three years on the market is showing signs of recovery.

At the close of 2023, the global aviation market had reached 97% of 2019 levels with tourism improving to just under 90% of pre-pandemic levels worldwide.

Aviation in Africa is tracking global trends closely, reaching 93% recovery by the end of 2023.

Although these figures speak to an increasingly robust industry and an end to the volatility of the past few years, there are still a number of key developments and trends which need to be considered going forward.

To unpack these, low-cost airline FlySafair held a media round table hosted by chief marketing officer, Kirby Gordon.

“For both the aviation and tourism industries the past three years have been defined by instability and volatility. Thankfully, recovery has been good both internationally and in South Africa,” said Gordon.

Travel on the mend

Recovery in South Africa is also looking up.

Airports Company South Africa (ACSA) recently reported an 87% recovery in passenger numbers across the entire network and flight numbers reaching 93% of 2019 levels.

Tourism in South Africa has also shown a strong and sustained recovery as international visitors broke the million mark for the first time since the pandemic.

“Overall, the market both globally and locally is looking far stronger than it has at any time since the pandemic. This steady improvement speaks to the resilience of the industry and hopefully points to an end to volatility,” said Gordon.

“That being said, there are a number of new factors that should be considered, especially within South Africa. These emerging trends are having an impact on the direction the aviation and tourism industry are going as well as how consumers are engaging with products and services.”

During the round table event, Gordon went on to unpack six prominent industry trends.

The health of aviation infrastructure in South Africa

The air transport sector is a major contributor to the South African economy.

According to a report published by the International Air Transport Association (IATA), in 2017 the air transport sector was responsible for the creation of 490 000 jobs and $12 billion of South Africa’s GDP.

In the same year, air transport infrastructure in South Africa was ranked 10th best in the world.

The pandemic hit airports as much as it did airlines and many airports around the world deferred maintenance to save money in the near term. By August of 2021 some of this was coming home to roost with Polokwane and Plettenberg Bay airports experiencing downgrades due to higher level safety standards not being met.

By the end of 2023 issues relating to airport infrastructure have continued to plague airlines and consumers. In 2022 a fuel supply issue left travellers stranded at OR Tambo during the busy December period. In 2023, a similar incident occurred where the baggage sortation hall at OR Tambo broke down completely, leaving travellers without their luggage during the festive season.

“With each ticket sold, ACSA collects its share of airport tax from consumers via the airlines. This is then used to maintain the infrastructure of ACSA-owned and run airports across the country. However, airlines have raised their concerns that despite this consistent tax contribution, there seems to be a lack of basic infrastructure maintenance. At FlySafair, we have stepped in to fill certain gaps including implementing contingency plans for intermittent fuel supply. But some infrastructural elements like the baggage halls are unfortunately out of control. Ultimately, if there are mishaps that fall under ACSA’s remit, airlines are the ones that bear the brunt of disgruntled consumers when issues occur.”

The rise of the travel agent

The advent of the 1990s brought about significant shifts in the travel industry.

Travel agent revenue structures changed, and, over time, the emergence of online booking platforms further transformed the landscape, providing modern travellers with direct access to a wide array of travel options, and redefining the role of traditional travel agencies in the process.

But this seems to be changing again. During his recent Economic Outlook 2024 presentation, Standard Bank’s Chief Economist Goolam Ballim touched on consumer spending trends.

While direct spending with airlines remains dominant, there was an increase in the share of consumer spending with travel agents from 1% in 2022 to 1.5% in 2023.

This represented a compound annual growth rate of 13.6% across both online and offline agencies.

“There are several reasons for this change. For many the Covid-19 pandemic highlighted the complexities of travelling, leading many to turn to experts for assistance. The increased cost of living has also resulted in travellers seeking better deals and reassurance in travel agencies. Finally, the growth of loyalty schemes has also pushed consumers back to travel agents.”

Fuel supply and demand dynamics

Various factors have led to the increase in jet fuel, which has contributed to ticket price increases in recent years.

The start of the Russia-Ukraine war in early 2022 coupled with the closure of a local Jet A1 synthesis plant put a strain on supply.

In the immediate short term, there was a jet fuel shortage which saw some airports run dry.

To ensure business continuity and adequate supply, South Africa now imports a significant portion of its jet fuel, which has kept running costs for airlines high.

“We often still get critique around pricing, especially when the price of oil has dropped. Although the price is down from the all-time highs of 2022, when oil has come down, even for a short time, jet fuel has continued to increase. This has had a significant impact on pricing across the industry.”

High season consumer trends

The December-January holiday season proved to be a turning point for local travel recovery with increased consumer spending on air travel and restaurants.

Domestic air passengers' numbers were up to 97% of pre-pandemic levels, while Cape Town surpassed its 2019 level by 7.7%.

“A lot of people came out of the pandemic with a ‘life is too short’ attitude. As a result, we have seen a significant increase in travel and leisure spending. People are prioritising taking time out to travel and enjoy activities like eating out, despite the increased cost of these activities.”

The future of aviation technology

The aviation sector is one industry that has been at the forefront of technological leaps.

While plenty of work is underway in terms of where Artificial intelligence might play a role in flying aircraft, the more immediate applications of this technology are likely to be on the ground.

“Generative AI has found a number of applications in the aviation industry. Our world is run by a plethora of data from ticket sales trends and pricing dynamics to aircraft flight data outputs and fuel burn results. The capacity of AI to consumer vast amounts of data and build insights from it is fast transforming our industry allowing airlines to better serve customers while improving costs which translates to lower fares and managing safety and reliability.”

The future of sustainable aviation

According to Our World Data, aviation is responsible for 2.5% of global CO2 emissions.

This is nowhere near what other industries like meat farming contribute, but it’s still an area of intense focus and investment for the aviation industry.

To reduce the airline industry’s impact on the planet, there’s a lot of work that’s been done on alternate fuel technologies.

The most advanced is probably the huge drive to develop Sustainable Aviation Fuel (SAF) with the aim to decrease carbon emissions by up to 80%. Rolls-Royce has developed an aircraft engine that can run completely on SAF, while the likes of Airbus are developing a hydrogen-powered commercial aircraft.

“Airlines in South Africa are doing what they can to reduce their carbon emissions, but SAF is not a real option for us, or anyone just yet.”

In September last year, Lufthansa’s CEO made a statement to say that to use 100% SAF, the airline would need half of Germany’s electricity to produce the fuel they alone would require.

“At this stage it’s the most advanced new fuel technology and many airlines are running on blends of traditional fossil fuel and SAF, but there’s just no availability in South Africa at this stage. So, for now our focus remains on minimising emissions through efficient flying”.