Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

Global airline traffic will reach pre-pandemic levels by June, according to a <a href="https://prod.uploads.slack.files.api.cncms.aero/F04JXSA305U/15-01-2023_22_11_36.pdf" target="_blank">paper</a> published Monday by Ireland-based aircraft leasing company Avolon.
After a 70 percent recovery in passenger traffic last year led by Europe and North America, Asia will drive growth in 2023 as Chinese airlines re-enter international markets, it said. Out of every two seats of airline capacity added in the world, Asia now accounts for one, the report notes.
The traffic recovery brought the sector back to near profitability last year, after combined sector losses of $180 billion in 2020 and 2021. Forecasters project the industry to turn a profit of $4.7 billion this year.
<h5>Airline Pandemic Recovery</h5>
The report found that airlines’ capacity recovery lags behind financial recovery; while air traffic remains 25 percent below 2019 levels, revenues have risen to just 13 percent behind 2019 as airlines flex their pricing power and raise fares. Demand for travel no longer represents a constraint to recovery, but&nbsp;rather, airlines’ capacity to put airplanes in the air.
However, delivery delays have become endemic as an aircraft shortage emerges due to the lost production of 2,400 airplanes manufacturers had planned but failed to build due to the pandemic. As traffic flows rebound, the absence of new aircraft has increased supply tension, supporting long-term residual values.
In a key measure for lessors, airlines have shrunk their owned fleets by 3 percent since 2019, whereas lessors have seen theirs grow by 17 percent. Lessors now manage 53 percent of the global passenger fleet by value. Aviation markets continue to adjust to higher interest rates and lease rates have increased, creating opportunities for well-capitalized investment-grade lessors.
Finally, the report notes that the industry needs to make greater progress in addressing concerns about its long-term environmental impact.&nbsp;Sustainable aviation fuel (SAF) production tripled in 2022 but still represents only 1 percent of the amount targeted for production in 2030. Lifting SAF production to 10 percent of jet fuels will require $250 billion in investment and collaboration between all industry stakeholders, it added.
<h5>Rebounding Traffic Levels</h5>
“Aviation has demonstrated its resilience and is ready to thrive having come through a pandemic-driven, two-thirds drop in traffic, said Avolon CEO Andy Cronin. “Airlines, manufacturers, and lessors share an ecosystem that creates opportunities for all but requires collaboration to overcome key challenges including a higher interest rate environment, limited aircraft availability, and the need to make further progress on decarbonization goals.
“The rebound in 2022 is set to continue in 2023, with China’s reopening helping to drive global traffic levels to pre-pandemic levels by June. Airlines are enjoying higher fares and load factors, and manufacturers are under pressure to ramp up production quicker. Whilst geopolitical and macroeconomic risks remain, this is a positive environment for lessors as supply constraints drive higher lease rates and increase the value of order books.”
Co-authored by Avolon chief risk officer Jim Morrison and head of counterparty risk and sustainability Rosemarie O’Leary, the paper also forecasts that Boeing and Airbus will delay rate targets of 140 single-aisle jets and 24 widebodies by a year, from a planned 2025 to 2026.&nbsp;
It also sees increased demand for used widebodies as international markets fully open, resulting in increased lease rates by 35 percent for Airbus A330ceos, for example.
Avolon also expects airline consolidation to accelerate as the launch of startups slows. The report notes that 100 new&nbsp;airlines started operations in the past three years, capitalizing on available aircraft and crews. The authors believe consolidation will replace fragmentation in 2023, forcing out startups without competitive niches.

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