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: Airlines see strong recovery as global air traffic rises


The International Air Transport Association said Monday that November global air travel was at 75% of prepandemic November 2019, with Asia reporting the strongest recovery but COVID travel restrictions crimping the all-important domestic market in China.

Global air traffic in November rose 41% compared with November 2021, IATA said in its most recent update.

International traffic, which has lagged behind domestic travel ever since air travel emerged from a near complete standstill at the start of the pandemic, rose 85% year-over-year, the association said.

Domestic traffic was up 3.4%, “with travel restrictions in China continuing to dampen the global result,” IATA said. Total November 2022 domestic traffic was at 78% of the November 2019 threshold.

U.S. airlines outperformed the broader equity markets on Monday, with United Airlines Holdings Inc.

stock leading the way and up more than 4%.

The U.S. Global JETS ETF

rose 2.3%, compared with gains of 1.3% for the S&P 500 index.

The ETF is down 15% in the past 12 months, versus losses of about 16% for the S&P in the same period.

See also: Southwest sees flight cancellations costing up to $825 million

“The stabilization of Chinese domestic traffic will be key to the 2023 recovery, as the market represents (about) 18% of the world share,” RBC analyst Ken Herbert said in a note Monday.

“We continue to view the air traffic results as favorable. With recessionary fears weighing on (first half of 2023) travel expectations, the outlook for 2023 continues to show a path of recovery,” Herbert said.

Related: United Airlines’ order is ‘significant win’ for Boeing

“The continued recovery of international travel as well as a recovery in China, now with less COVID restrictions, should represent much of the growth prospects in 2023,” the analyst said.

U.S. domestic air travel, which represents about 25% of the world share, continued to perform as the best domestic market, up 5% on-year and encouragingly “only about 1% shy of November 2019 levels,” Herbert said.

In a separate note, IATA said that November data for air cargo worldwide showed that “demand softened as economic headwinds persist.”

Global demand fell by nearly 14% compared with November 2021, with capacity 1.9% below November 2021. This was the second year-over-year contraction since April 2022, IATA said.

November is the “traditional peak season” for air cargo, the association said. IATA pinned the softening on the stronger dollar, shrinking of new export orders in some countries, and other factors.

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