Aviation in 2024: Air travel to boom despite headwinds

More people are expected to take to the skies in 2024, despite the challenging economic conditions in Ghana and other countries on the continent.

Willie Walsh, IATA’s Director General, based on the available data, projects that despite these headwinds, a travel boom is expected this year.

“We are moving ever closer to surpassing the 2019 peak year for air travel. Economic headwinds are not deterring people from taking to the skies. International travel remains 5.5% below pre-pandemic levels but that gap is rapidly closing. And domestic markets have been above their pre-pandemic levels continuously since April,” he said.

An analysis of the country-specific and regional travel and economic data portends a travel boom this year, buoyed by the global lifting of all pandemic-related restrictions, increased domestic travel demand, and projected year-on-year Gross Domestic Product (GDP) growth of 3.8 percent for the African continent.

Global international air connectivity in November 2023, reached 99.1% of November 2019 levels. The African region, however, recorded a much higher recovery rate of 104 percent within the same period.

On the domestic front, the International Air Transport Association’s traffic data for November 2023, shows an increase of 34.8% compared to November 2022. Total November 2023 domestic traffic was 6.7% above the November 2019 level.

Ghana’s international passenger numbers hit a high of 2.1 million in 2019 on the back of the hugely successful Year-of-Return tourism project. The onset of the pandemic in 2020 eroded this gain and led to a sharp drop in international passenger throughput to about 700,000, as countries imposed restrictions to contain the spread of the COVID-19 virus.

International travel, however, resumed with 1.3 million departures and arrivals recorded at Terminal 3 of Accra’s Kotoka International Airport. This grew in 2022 to 1.8 million passengers. Projections based on the half-year figures released by the Ghana Airports Company Limited (GACL) portend a full recovery for end-year 2023 is not far-fetched.

At the national level, Ghana’s domestic aviation market recovered fully from the negative impact of the pandemic in 2021. Serviced by two main scheduled domestic carriers—Africa World Airlines (AWA) and PassionAir—and GIAN Air, domestic passenger throughput recovered fully in 2021, recording a passenger throughput of 722,721, as against the 690,314 passengers recorded in 2019.

The growth in domestic passenger throughput further increased by some 15 percent in 2022 to 852,101. The completion and re-opening of the Sunyani Airport, coming on-stream of the new modern terminal building at the Kumasi Airport, and the increase in fleet size by domestic airline operators were key factors for the improved figures.

Challenging economic headwinds
Ghana has had to restructure the majority of its public debt in December 2022 as a pre-requisite to qualify for the US$3 billion IMF extended credit facility programme. An initial disbursement of $600m was done in May 2023. The Government of Ghana’s agreement with Official Creditors under the G20 Common Framework on a comprehensive debt treatment beyond the Debt Service Suspension Initiative has paved the way for the release a further of US$300 million as part of the IMF support. There will also be an additional $250 million from the World Bank for the Ghana Financial Stability Fund.

Inflation also has eased from a high of 54 percent in Dec 2022 to 29 percent in Dec 2023. Ghana's public debt fell by GH₵14.2bn; now 66.4% of GDP. Despite these signs of revival, limited fiscal space means government-sponsored capital expenditure this year may be limited.

The Economist Intelligence Unit predicts that Ghana’s economic growth will remain subdued in 2024 as still-high inflation and fiscal tightening weigh on domestic demand. In 2027-28 growth will pick up, driven by an increase in exports of gold and oil as new projects come on stream.