If the world was looking forward to 2022 to provide a sense of stability following the previous two years of global shock, it took barely a month to be disappointed.
From the sharp rise of the Omicron variant to its equally sharp decline to a new European war and historic economic sanctions destined to limit economic growth, 2022 has already contained a year’s worth of news and added uncertainty in its first three months. In January, the International Monetary Fund revised their global GDP growth projections down by half a percentage point, a material number reflecting the economic challenges facing the world. The world is on a trajectory where they will be revised lower again.
Since, Russia, the G8’s second-largest country by population has been effectively removed from the western economy following its invasion of Ukraine and the subsequent imposition of sanctions. Considering new questions regarding inflation, a stumbling supply chain, potential food shortages, and high energy prices, the outlook on the global economy has turned decidedly negative since the end of 2021.
Yet, even as discussions of a potential global recession increase, aviation continues its impressive recovery. Travel restrictions are falling and passengers are returning to the skies in increasing numbers, still with many to go. While the world prepares for an economic slowdown, aviation remains squarely in the highest growth rates it has historically experienced, rebounding from pandemic lows.
The dichotomy between the aviation industry’s optimism and growing global economic pessimism has created dueling narratives. Is the world in store for more aviation growth or a global recession?
In this latest TAC Analysis, we bring the air travel recovery into context with increasingly cloudy economic horizons. Despite calls to pick a side between aviation growth or a global recession, we find evidence that both can be true – an apparent contradiction worthy of the wild times in which we find ourselves today.
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