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Air travel set to soar to pre-pandemic levels in 2023: UN aviation agency

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Air passenger demand in 2023 will rapidly recover to pre-pandemic levels on most routes, the UN aviation agency said on Wednesday.

“Assuring the safe, secure, and sustainable recovery of air services will be key to restoring aviation’s ability to act as a catalyst for sustainable development at the local, national, and global levels, and will consequently be vital to countries’ recovery from the broader impacts of the COVID-19 pandemic,” said Salvatore Sciacchitano, President of the International Civil Aviation Organization ( ICAO ) Council.

NEWS: ICAO forecasts complete and sustainable recovery and growth of air passenger demand in 2023 https://t.co/R5mHl6nKKp #aviation #flying https://t.co/WQyxRxOrjt ICAO icao February 8, 2023

Using advanced big data analytics, ICAO forecasts that the surge in demand will be seen by the end of the first quarter. By year’s end, the agency predicts growth of about three per cent on 2019 figures.

Strong recovery momentum

“The air passenger forecasts ICAO is announcing today, build on the strong momentum toward recovery in 2022 , as previously assessed by ICAO statistical analysis,” ICAO Secretary General Juan Carlos Salazar said.

“Through ICAO, governments have reached agreements on goals toward zero accident fatalities by 2030 and zero carbon emissions by 2050 goals, and these will continue to play key roles in both guiding continued progress and in prioritizing ICAO’s implementation support initiatives.”

50 per cent growth

The swift recovery of most international routes lies behind the optimistic predictions, ICAO reported. The number of air passengers carried in 2022 rose by an estimated 47 per cent compared to the previous year.  ICAO also observed an estimated 50 per cent jump in growth of airlines’ annual passenger revenues from 2021 to 2022.

• International Civil Aviation Organization

Should we fly less? The inequality of air travel

Weeks before announcing he was stepping down from his position as CEO at Heathrow Airport, John Holland-Kaye told the World Economic Forum at Davos that cutting back on air travel was a “Northern European indulgence ”. It’s a strange accusation, but one that highlights the complex relationship between entitlement, privilege and responsibility within the debate about how to reach global decarbonisation. We know that the aviation industry needs to massively decrease its emissions . We know, based on current evidence, that technological solutions majorly lag behind our timeline to decarbonise. We know that cutting back on flying will be essential in slowing down the sector’s emissions till those technology solutions are available. But the question remains; who gets to fly and who should fly less?

Holland-Kaye’s words stand in direct opposition to movements such as ‘flygskam’ or ‘flight shame’, which have brought together people who want to cut back on flying on the basis of their moral commitment to act on climate change. At the heart of these movements, and the decision by activists such as Greta Thunberg not to fly, is the idea that choices made at an individual level will eventually lead to policy changes at a wider level. With flying being the quickest and cheapest way to grow your carbon footprint, many who avoid flying for environmental reasons hope that their actions – and the actions of like-minded individuals – will push governments to rethink their approach to encouraging increased demand for air travel. Naturally, this movement has not been received with great enthusiasm by those within the aviation industry.

According to John Holland-Kaye, there is no need to cut back on flying. Instead, he proposes a transition to Sustainable Aviation Fuel (SAF) to compensate for increased aviation emissions. Speaking at Davos, he said, “we can choose not to travel in this part of the world but that is not going to affect travel in Asia, India and Africa”. In other words, why bother reducing your flying now, when demand in other countries is just starting to take off? Holland-Kaye implicitly pushes the idea that growth is inevitable, and therefore that we should adopt a certain level of fatalism when it comes to controlling demand.

Yet as he doubtless knows, the aviation industry’s emissions were, until the pandemic, the fastest growing compared to any other transport mode, with aviation emissions globally having grown 4-5% every year from 2010 to 2018 to reach their highest ever level until the Covid pandemic hit. Left unchecked, aviation emissions could triple by 2050 . 

The airline industry continues to push SAF as a viable way to meet its environmental targets while simultaneously justifying continual growth. However, it is highly unlikely that SAF will be available in large enough quantities in the next few decades to compensate for this growth. Although crop-based SAFs are not being considered by the Government, a recent paper, published by the Royal Society, highlights the challenges of scaling: an estimated third of all UK agricultural land would be needed to produce enough bio-fuel to meet UK jet-fuel demand. 

This is clearly prohibitive. In fact, even the UK Government’s techno-optimistic ‘Jet Zero’ plan, estimates that SAF will deliver only a 17% reduction in emissions by 2050. The introduction of SAF isn’t going to be enough to guarantee the aviation industry meets its own emission reduction goals and certainly does not justify unmitigated growth. 

The second issue with Holland-Kaye’s argument is the implication that if people in Northern Europe choose to fly less that will have little impact on global aviation emissions and that flying less is somehow indulgent. But look at this another way: on a global scale, surely flying itself – and certainly frequent flying – is an indulgence of high-income countries, most typically those in the Global North. 

Stefan Gössling and Andreas Humpe have studied the global inequality of air travel demand. From their research, we can see that in 2018, the proportion of people from high-income countries that fly at least once a year was 40%, compared to only 0.7% of people from low-income countries. 

Holland-Kaye claims that avoiding air travel is “not a solution to climate change”. He is wrong. Cutting flying will cut emissions, and it is clear from the above graph that behaviour change within high-income countries would bring the biggest reduction in emissions.

decarbonisation opinion

Decarbonizing aviation: Executing on net-zero goals

Though the aviation industry has committed to achieving net-zero flying by 2050, 1 For example, the International Air Transport Association, International Civil Aviation Organization, and Civil Air Navigation Services Organisation all aim for net-zero aviation by 2050. its path to reaching that goal is complex. 2 Axel Esqué, Adam Mitchell, Kritika Rastogi, and Robin Riedel, “ Decarbonizing the aviation sector: Making net zero aviation possible ,” McKinsey July 15, 2022; Future Air Mobility , “ Critical insights on the path to a net-zero aviation sector ,” McKinsey, October 14, 2021. The industry has aligned on most of the important actions needed to decarbonize—namely, fleet renewal, disruptive propulsion technologies, operational efficiency, sustainable aviation fuel (SAF) usage, and carbon offsetting. 3 The Science Based Targets initiative (SBTi) acknowledges beyond-value chain decarbonization, such as carbon offsetting, as an important aspect of emission reductions but does not include it within the science-based targets. From 2005 to 2019, the aviation industry improved fuel efficiency by approximately 39 percent, 4 Future Air Mobility , “ Fuel efficiency: Why airlines need to switch to more ambitious measures ,” blog entry by Axel Esqué, Guenter Fuchs, and Robin Riedel, McKinsey, March 1, 2022. but absolute growth of emissions is larger than efficiency gains by far. Going forward, achieving decarbonization in a cost-effective way requires transparency and adaptability across a wide range of carbon mitigation measures as well as a clear focus on short-term versus long-term initiatives.

About the authors

Many companies across the aviation value chain have set goals to be completed over the long term, but there are actions they can take today to move closer to accomplishing these objectives. To get started, companies should understand which actions to prioritize for the greatest impact and for a cost-optimal path to net-zero emissions.

The current state of aviation decarbonization

Prepandemic CO 2 emissions from aviation contributed to roughly 2.5 percent of global total emissions, 5 Future Air Mobility , “ Fuel efficiency: Why airlines need to switch to more ambitious measures ,” blog entry by Axel Esqué, Guenter Fuchs, and Robin Riedel, McKinsey, March 1, 2022. but the global-warming potential could be significantly greater (see sidebar “Aviation and non-CO 2 emissions”). The sector is hard to abate because of unique requirements, including weight and size constraints, long innovation cycles, prioritization of safe operations, and because key technologies, such as SAFs, are relatively costly and have not been adopted at scale. 6 Axel Esqué, Adam Mitchell, Kritika Rastogi, and Robin Riedel, “ Decarbonizing the aviation sector: Making net zero aviation possible ,” McKinsey July 15, 2022.

Aviation and non-CO 2 emissions

In addition to the CO 2 emissions produced from burning fuel, aviation affects the climate through emissions of nitrogen oxides (NO x ), soot, and water vapor, which, among other effects, create contrails and cirrus clouds that cause radiation and affect the climate. The CO 2 emitted from kerosene burned in flight can stay in the upper atmosphere for 50 to 100 years, and NO x remain for several weeks, affecting the ozone layer. 1 Hydrogen-powered aviation: A fact-based study of hydrogen technology, economics, and climate impact by 2050 , a joint report from the Clean Sky 2 and Fuel Cells and Hydrogen 2 Joint Undertakings, May 2020. As such, the total aviation effects may be approximately two to four times higher than the pure CO 2 effects would indicate. 2 Target true zero unlocking sustainable battery and hydrogen-powered flight , World Economic Forum (WEF), July 2022; M. R. Allen et al., “The contribution of global aviation to anthropogenic climate forcing for 2000 to 2018,” Atmospheric Environment , January 2021, Volume 244.

The science on non-CO 2 effects is nascent, so most airlines (and the latest Science Based Target initiative guidance) refer only to pure CO 2 emissions.

Many stakeholders in the aviation value chain have committed to various sustainability goals, including emission-reduction targets, 7 “Environmental sustainability goals,” Southwest, accessed May 25, 2023. SAF targets, 8 “DHL Express announces two of the largest ever Sustainable Aviation Fuel deals with bp and Neste amounting to more than 800 million liters,” Deutsche Post DHL Group, March 21, 2022. targets that include compensation, 9 “Flying with purpose: Alaska sets new climate goals, including net-zero carbon emissions by 2040,” Alaska Airlines, April 21, 2021; “Hawaiian Airlines commits to new milestones on path to net-zero carbon emissions,” Hawaiian Airlines, March 30, 2023. and membership in coalitions. 10 “Lufthansa joins first movers coalition to drive global development of sustainable aviation fuels,” WEF, March 28, 2023. In addition to the defined paths to reduce emissions that are in line with the Paris Agreement, the Science Based Targets initiative (SBTi) has emerged as one of the leading standards (see sidebar “The Science Based Targets initiative”).

The Science Based Targets initiative

The Science Based Targets initiative (SBTi) is a collaboration among four nongovernmental organizations: Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI), and the World Wildlife Fund for Nature (WWF). The initiative aims to ensure emission-reduction targets set by companies are within the pace recommended by scientists to achieve net-zero emissions by 2050. It also provides guidance and promotes best practices to reduce corporate greenhouse-gas emissions. As of April 2023, more than 4,500 companies have committed to or set science-based targets.

Recently, the SBTi has provided guidance for an interim aviation 1.5° pathway, implying strict emission-reduction targets for airlines: namely, a more than 30 percent CO 2 reduction per revenue ton kilometer (RTK) by 2030 compared to 2019 base year levels and a more than 50 percent reduction by 2035. 1 Base year and target year vary by airline. , 2 Technical report: The SBTi interim 1.5° sector pathway for Aviation , Science Based Targets, February 2023. In comparison, the International Energy Agency Net Zero Emissions pathway calls for approximately 38 percent emission reduction in 2030 and approximately 57 percent in 2035 compared to 2019 levels. Note that both pathways set targets for relative emissions only (measured per RTK).

As of April 2023, 25 airlines—mostly based in the Americas and Europe—have committed to setting or have set science-based targets. According to McKinsey analysis, this group represents more than 30 percent of global passenger traffic. On the OEM side, aerospace and defense companies, representing about 20 percent of the global value pool, have also committed to goals aligned with SBTi (Exhibit 1).

While the ambitions are clear, actors in the aviation sector are highly dependent on each other to achieve their decarbonization commitments. For example, more than 95 percent of aircraft OEMs’ emissions come from their Scope 3 Category 11 downstream emissions, 11 Scope 3 Category 11 emissions are released when sold products are used by the consumer. , 12 Future Air Mobility , “ A dual approach to decarbonization in aerospace ,” blog post by McKinsey, July 18, 2022. which is mostly airlines’ fuel burn. This interdependency has strengthened the industry’s unified ambition to decarbonize, but it also highlights the role that actors such as commercial aviation lessors, OEMs, and suppliers need to play to support airlines and offer solutions.

Factors affecting decarbonization

Options for airlines to abate CO 2 emissions differ based on existing fleet efficiency, the network of the airline, and the baseline decarbonization efforts already implemented by the airline.

From a technology perspective, the development to scale new SAF pathways with improved emission-reduction potential, such as advanced biofuels or power to liquid (PtL) fuels, is uncertain. 13 Bernd Heid, Nathan Lash, Robin Riedel, and Daniel Riefer, “ Clean skies for tomorrow: Delivering on the global power-to-liquid ambition ,” McKinsey, August 25, 2022. Biobased pathways face challenges in feedstock availability and collection to be immediately scalable, and PtL requires significant access to large amounts of renewable electricity. Other uncertainties remain about the progress in other technologies fields, such as new propulsion technology or advanced analytics for flight planning.

From a regulatory perspective, aviation players will need to adapt to the ever-changing implementation of regional incentives and penalties. For example, Europe’s reaction to the Inflation Reduction Act could change SAF-related decarbonization costs for European airlines.

Other industries such as marine and road transport, which are sourcing from the same sustainable fuel feedstock, also influence the aviation sector. This competition affects the balance of SAF supply and demand and therefore its market price, especially as the regulatory schemes and customer willingness to pay evolve.

Many decarbonization efforts also require investments with longer lead times that are not in line with traditional airline yearly business planning cycles and, as such, require a different view on economic and environmental returns. Although many airlines have shown strong financial results in 2022, outlooks are uncertain as the industry returns to pre-COVID-19 capacity levels, which drives traditional airlines to limit riskier investments despite their potential payoff beyond five-year financial plans.

These external factors have contributed to the struggle of companies across the aviation ecosystem to deploy multiple decarbonization efforts in the most cost-effective way, while managing uncertainties in parallel.

Introducing the marginal abatement cost curve

As the timeline to hit near-term emission targets shortens, aviation sector players are increasingly searching for ways to achieve these goals—and do so quickly to compensate for the long lead times of many initiatives. For example, solidifying sufficient access to affordable SAF can take several years, and renewing fleet quickly depends on OEMs’ or lessors’ ability to deliver or provide new aircraft.

Reading a marginal abatement cost curve

Initiatives are organized left to right on the marginal abatement cost curve (MACC) based on the economic cost of the initiative’s emissions abatement. Leveraging the MACC, airlines can execute decarbonization initiatives by implementing cost-negative initiatives first, such as those that save fuel.

As a first step, airlines can evaluate carbon abatement costs and impact potential by developing their own marginal abatement cost curve (MACC). 14 For a perspective on how McKinsey has been using the MACC, see New at McKinsey Blog , “ A revolutionary tool for cutting emissions, ten years on ,” blog entry by McKinsey, April 21, 2017. This assessment helps companies compare and sequence different decarbonization measures while also allowing for adjustments and updates. It also helps companies determine the best and most cost-effective decarbonization solutions for the industry (see sidebar “Reading a marginal abatement cost curve”).

Categories within a typical MACC for airlines

Exhibit 2 illustrates a typical MACC for an airline. Actions are classified by three categories: operational measures (including air traffic management), fleet renewal, and SAF.

Operational measures. Operational and efficiency measures often come at negative or low costs (due to associated fuel savings) but are limited in their impact.

Airlines can relatively easily enforce initiatives within their own control, such as introducing pilot incentive programs to fly and taxi more fuel efficiently or imposing stricter operational weight limits to reduce fuel needs. Bolder moves could affect customer experiences, such as reducing ultra-long-haul flights, removing some catering on short-haul flights, or densifying cabins to include more seats.

Other efficiency efforts are dependent on collaboration among several stakeholders, especially to optimize air space usage. For example, the Single European Sky program 15 “Single European Sky,” European Commission, accessed May 25, 2023; Sesar Joint Undertaking website. aims to modernize air traffic control infrastructure to reduce up to 10 percent of emissions, 16 “Single European Sky: for a more sustainable and resilient air traffic management,” European Commission, September 22, 2020. and a similar program called NextGen 17 “Next Generation Air Transportation System (NextGen),” Federal Aviation Administration, updated May 12, 2023. is underway in the United States. However, an airline’s actual carbon emission savings depend on its exposure to the affected airspace, and emission reductions could be significantly lower than 10 percent.

Fleet renewal. Accelerated fleet rollover can come at negative marginal abatement cost, particularly when including the impact of regulatory action, such as future SAF mandates and kerosene taxes. Depending on the state of an airline’s fleet, the evolutionary rollover to already available aircraft types represents a decarbonization potential of up to 15 to 20 percent. 18 Future Air Mobility , “ Fuel efficiency: Why airlines need to switch to more ambitious measures ,” blog entry by Axel Esqué, Guenter Fuchs, and Robin Riedel, McKinsey, March 1, 2022. It is expected that next-generation aircraft, such as the Airbus A320neo or the Boeing 777-X family, will replace a significant share of current-generation aircraft in the next ten years (Exhibit 3).

In the long term, both OEMs and airlines could benefit from transitioning to more fuel-efficient aircraft and could adjust their prices to reflect greater fuel efficiency.

SAF. SAF is by far the most impactful initiative, but financial effects vary due to mandates, subsidies, sourcing approaches, voluntary commitments, and customers’ willingness to pay. Minimum sustainable fuel–blending mandates have been introduced in some geographies, and several airlines have committed to SAF volumes of 10 to 30 percent of total jet fuel used by 2030, totaling about 5 percent of expected aviation fuel demand in 2030. 19 The McKinsey Global Energy Perspective model.

Notably, many airlines have expressed concerns around the cost, production, and timing of new SAF technologies and raised questions regarding where responsibility for spearheading and paying for these efforts lies. 20 "Qatar Airways CEO suggests 2050 net-zero goal beyond reach," Reuters, May 23, 2023. , 21 “Boeing CEO warns climate-friendly biofuels will ‘never achieve the price of jet fuel’,” Financial Times , May 22, 2023. Producers will need to scale different SAF-production technologies beyond those currently used because today’s feedstocks, such as waste oils, are limited in availability. These new technologies, which are often still in developmental phases, and the costs of crucial input parameters, such as renewable electricity and green hydrogen, will affect costs to produce SAF.

Challenges influencing an MACC

Ever-changing regulations affect all solutions. It is important to recognize the full impact of regulations, such as SAF mandates and carbon taxes. Because an MACC displays only the marginal cost to the airline, a government-mandated increase in SAF at European airports, for example, will show an abatement impact in the curve but limited additional marginal costs to the airline. Still, it should be recognized that mandated SAF quotas could affect airlines’ competitiveness compared to carriers operating through hubs outside of the mandate’s geography. Carbon taxes such as the EU Emissions Trading System have an amplifying effect on the identified actions: as taxes increase, it becomes more costly to operate in a traditional way and emission-reduction strategies become less costly.

Quantifying levers is not easy. One challenge in developing an MACC lies in quantifying both the impact and estimating the associated cost of initiatives. MACCs are also not static; they look different every year. While the potential mitigation options for the aviation sector are relatively well known, the abatement opportunity and effective costs to airlines are typically not well quantified and are largely affected by many uncertainties in the market.

Customer willingness to pay is growing. Cargo, corporate, and leisure customers have signaled or have the propensity to pay for decarbonization measures. A 2023 McKinsey survey 22 May 2023 report forthcoming. For an analysis from 2021, see Mishal Ahmad, Frederik Franz, Tomas Nauclér, and Daniel Riefer, “ Opportunities for industry leaders as new travelers take to the skies ,” McKinsey, April 5, 2022. indicated that 85 percent of travelers globally said they were willing to pay 2 percent or more for carbon-neutral flight tickets, which is a significant increase compared to previous years: in 2019 and 2021, a McKinsey survey showed consumers’ willingness to pay more for carbon-neutral flight tickets was 46 and 39 percent, respectively. But consumers’ actual behavior may differ. Another survey indicated that only 14 percent of travelers actually pay more for sustainable options when they travel. 23 Accelerating the transition to net-zero travel: Strategies for action , a joint report from McKinsey and Skift, September 2022. Not only are consumer decisions subject to economic factors, but there is also a scarcity of sustainable booking options and unclear sustainability-related information. As such, raising ticket prices to factor in sustainable options could reduce demand or lead consumers to shift to other connections. Still, leading carriers could limit losing customers by creating transparency, debundling products, and driving personalized, sustainable offerings based on clear segmentation.

In addition to considering CO 2 abatement and the cost of certain actions, airlines can include additional sources and criteria in their decision making. For example, taking weight-reducing measures in the cabin to reduce CO 2 could have ramifications for an airline’s competitiveness and its customers’ experience.

Potential paths for OEMs in aviation decarbonization

MACCs will take different shapes for different stakeholders, and most initiatives will require actors to work together. Aviation OEM MACCs will likely predominantly focus on Scope 3 Category 11 emissions (use of sold products). OEMs are also dependent on airlines taking measures to improve operational efficiency to fulfil their own downstream decarbonization potential. As such, OEMs can work with airlines to aggregate demand for SAF, for instance, to reduce fuel burn in the short term.

More revolutionary technologies, such as hydrogen and electric propulsion, will likely be limited to short-haul or few-passenger use cases until 2035, and the path to scaling these technologies remains uncertain.

Considerations for implementation

A dynamic and flexible approach to decarbonization allows stakeholders to consider changes in the market and draw implications from external ambiguity. Once companies have established targets and determined their priorities, they can take steps to make these goals more accessible. They can first recognize inherent uncertainties with regulatory landscapes, customer behavior, technology development, SAF availability and prices, and emissions. Then they can create scenarios and identify no-regret moves in the next one to three years.

To ensure rigorous implementation across the different departments—which is especially relevant for weight-saving measures, in which many operational departments play a role—airlines can benefit from a central governance structure to track and trace progress and steer where needed. Leading airlines integrate this as much as possible into their regular business planning cycles.

Some themes, however, may require a temporary thematic governance structure. One example is the optimization of SAF procurement, managing short-term and long-term offtake agreements, and long-term coinvestments. Another one is taking equity stakes to invest in advanced air mobility start-ups that will help them accomplish mid-term and long-term goals.

Aviation companies that integrate decarbonization efforts into their standing business planning cycles can de-risk their sustainable transition and achieve optimized decarbonization costs. While decarbonizing the aviation industry is one of the largest challenges the industry has ever faced, the significant lead times of some investments heighten the urgency for companies across the aviation value chain to act quickly to position themselves better in the future. Airlines that embrace radical transparency on their decarbonization options and investigate partnerships with other aviation value-chain actors can determine the future of green aviation.

Axel Esqué is a partner in McKinsey’s Paris office, Frederik Franz is a consultant in the Berlin office, Geert Mulder is an associate partner in the Amsterdam office, Robin Riedel is a partner in the Bay Area office, and Daniel Riefer is a partner in the Munich office.

The authors would like to thank Andrea Cornell, Jeanne Ritter, Cameron Smith, and Jop Weterings for their contributions to this article.

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Air-travel climate-change emissions detailed for nearly 200 nations

An inventory lists the aviation emissions of all 197 nations that are signatories to the UN Framework Convention on Climate Change. Credit: Getty

Scientists have compiled the first estimate of the amount of greenhouse gases emitted by air travel in each of the 197 countries that signed the United Nations Framework Convention on Climate Change 1 .

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World economic forum announces coalition of cities for urban aerial mobility.

City and regional leaders are committing to accelerating the adoption of services within their own geographies through the new coalition, whose founding members include Amsterdam and Los Angeles.

A new coalition of cities which will work together to make the possibility of advanced and urban aerial mobility a reality has been announced.

According to the World Economic Forum (WEF), which launched the Advanced and Urban Aerial Mobility Cities and Regions Coalition, local policymakers are still a long way from understanding how best to approach these technologies and the challenges they will bring.

WEF is calling for a “proactive policy” approach to congestion, inclusivity, noise and privacy if the benefits of urban aerial mobility (UAM) are to be realised.

Advanced mobility technologies

David Hyde, lead, aerospace, WEF, said that city leaders have a great opportunity to ensure that emerging advanced aerial mobility technologies are implemented in ways that work for cities and their communities “rather than the other way around”. 

He added: “By taking a proactive approach to advanced aerial mobility technologies before they are fully rolled out, leaders can ensure that AAM (advanced air mobility) avoids the issues we see with other forms of transportation today, such as inefficiency, congestion, noise disturbance and inequity.”

By bringing together cities and regions at the forefront of UAM, WEF reports the coalition will collaborate and share expertise to develop a range of solutions that other cities and regions can adopt based on their own circumstances.

Founding city and region members include: Amsterdam; Massachusetts; Orlando; Los Angeles; Île-de-France (Paris region); and Sao Paulo.

“As a future-ready city, the City of Orlando wants to be prepared to embrace new transportation amenities that enhance our regional connectivity and allow us to efficiently move residents, visitors and goods throughout our community”

The coalition intends to build on work that has taken place in Europe under the Urban-Air-Mobility Initiative Cities Community (UIC2) of the European Union’s Smart Cities Marketplace. UIC2 will also join as a founding member and European arm of the coalition representing 37 cities and regions.

With significant growth of urban centres expected in coming decades, cities and regions are increasingly thinking about how to enable the efficient movement of people and goods, including breakthroughs in new aviation technologies.

WEF notes this will not only connect more remote communities with the economic opportunities within cities but will also enhance transport options, with minimal investment in infrastructure compared to ground-based alternatives.

“As a future-ready city, the City of Orlando wants to be prepared to embrace new transportation amenities that enhance our regional connectivity and allow us to efficiently move residents, visitors and goods throughout our community,” said Buddy Dyer, mayor of Orlando.

“We are proud to be collaborating and sharing experiences with other cities and regions to explore the best approaches to incorporating these new aviation technologies to serve as a major backbone of our future transportation network.”

Egbert de Vries, alderman for traffic and transport, water and air quality for the City of Amsterdam, added: “The city of Amsterdam is committed to ensure a safe, inclusive and sustainable living environment for our citizens, businesses and visitors. As the largest city of the Netherlands, we have been closely following and studying the growth of emerging drone technology and urban air mobility, as members of the UIC2, to view its potential but also to look at the risks and how to mitigate them.

“The ecosystem of the World Economic Forum and the AAM/UAM Cities and Regions Coalition helps us to share with, and learn from, other cities and excel our mutual learning process in the space of a new technology, policy making and 3D smart mobility concepts. This will enable us to make the right decisions for a future ready environment.”

The Advanced and Urban Aerial Mobility (AAM/UAM) Cities and Regions Coalition was launched during Amsterdam Drone Week (29-31 March), a global platform for exchanging knowledge and expertise on air mobility solutions, innovations, and essential regulations.

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.chakra .wef-1t4fkg7{margin-top:16px;margin-bottom:16px;line-height:normal;color:#ffffff;display:block;background:#000000;margin:0px;font-size:2.5rem;padding-left:16px;padding-right:16px;padding-bottom:12px;border-radius:0.25rem;border-top-left-radius:0;border-bottom-left-radius:0;-webkit-box-decoration-break:clone;-webkit-box-decoration-break:clone;box-decoration-break:clone;}@media screen and (min-width:37.5rem){.chakra .wef-1t4fkg7{display:inline;}}@media screen and (min-width:56.5rem){.chakra .wef-1t4fkg7{font-size:4rem;}} Economic growth: Everything you need to know and live coverage from #SpecialMeeting24

Released at our Annual Meeting in Davos, this report outlines a multidimensional framework to assess the quality of economic growth in 107 economies.

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} Pooja Chhabria

Kate whiting.

• Heads of state and leaders from politics, business, and international organizations will gather in Riyadh, Saudi Arabia, between 28 and 29 April for the Special Meeting on Global Collaboration, Growth, and Energy for Development .
• One of the three key pillars for the meeting is ' A compact for inclusive growth '.
• Follow live coverage and curated insights from the Meeting.

The start of 2024 has focused on interest rates, inflation, and how to stimulate growth. Many major economies are seeing persistent weak growth forecasts, and the potential for rate cuts as inflation continues to fall has been a hot topic.

The International Monetary Fund's latest World Economic Outlook does offer an optimistic note. "The global economy remains remarkably resilient," writes Pierre-Olivier Gourinchas , the Fund's Economic Counsellor and the Director of Research.

However, uncertainty remains high as the global economy continues to grapple with compounding headwinds and the weakest medium-term growth outlook in decades.

The World Economic Forum's Chief Economists Outlook warned in January of growing rifts and challenges, including deepening geopolitical tensions, tight financial conditions, mounting debt pressures, growing social strains, and rapid advances in the field of AI.

Reigniting global growth will be essential to addressing looming challenges. The key question for this pivotal moment, however, is not only about increasing economic growth at all costs; it is also about how that growth is achieved and whether it is aligned with other important national and global priorities.

As the World Economic Forum’s Future of Growth Framework revealed, the world economy, on average, is only halfway to fully innovative, inclusive, sustainable and resilient growth.

Against this backdrop, leaders will gather at a Special Meeting on Global Collaboration, Growth, and Energy for Development in Riyadh, Saudi Arabia, from 28 to 29 April.

The meeting will bring together the public and private sectors to drive inclusive growth, particularly at the nexus of technology and economics.

Here's what to expect.

Have you read?

Day 1 #specialmeeting24: key insights and what to know, live: highlights from key sessions.

Read on for live coverage of the key sessions as the meeting takes place.

All times in UTC+3

What Kind of Growth Do We Need? 08:45

Mohammed Al-Jadaan , Minister of Finance, Ministry of Finance of Saudi Arabia, joined Kristalina Georgieva , Managing Director, International Monetary Fund, and Tengku Zafrul Bin Tengku Abdul Aziz , Malaysia's Minister of Investment, Trade and Industry, to look at how we can reignite growth while ensuring equality.

Georgieva outlined the three immediate priorities for the global economy:

• get inflation down in countries where it is still above target
• focus on rebuilding fiscal buffers
• find ways to cooperate more, because fragmentation in the world economy is bad for the prospects for growth

Mohammed Al-Jadaan said investment in human capital was important, but so too was investment in innovation and technology.

Tengku Abdul Aziz said Asean nations recognize the importance of inclusive growth.

Opening Plenary: A New Vision for Global Development 10:00

Paul Kagame , President of Rwanda, joined the President of Nigeria, Bola Ahmed Tinubu ; Kristalina Georgieva , Managing Director of the International Monetary Fund; Prime Minister of Malaysia, Anwar Ibrahim and Faisal Alibrahim , Saudi Arabia's Minister of Economy and Planning in this session that touched on all the key themes of the Special Meeting. Catch up on the highlights in the X thread below.

AI, Productivity, Work: Can We Have it All? 11:30

Tiit Riisalo , Estonia's Minister of Economic Affairs and Information Technology joined Paula Ingabire , Rwanda's Minister of Information Communication Technology and Innovation; Abdullah AlSwaha , Saudi Arabia's Minister of Communications and Information Technology; Hiroaki Kitano , Executive Deputy President; Chief Technical Officer; Chief Executive Officer, Sony Research, Sony Group Corporation and Øyvind Eriksen , President and Chief Executive Officer, Aker ASA to discuss the opportunities of AI, and also the risks that need to be mitigated.

If you do not master AI within the next 5 to 7 years, you will become irrelevant to a talented leader that uses AI. In other words, you could be potentially, but surely displaced or disrupted.

Riisalo said his main priority for AI was not how to make money from it but how to make it useful for the people of Estonia.

Ingabire said she was excited about the potential of AI for two reasons:

"One, the ability to be an equalizer, and especially for developing countries, the ability to leapfrog. One of the benefits that we have is that we don't have legacy infrastructure and systems, so if we're able to be very laser-focused on how we deploy AI solutions for the societal problems we're trying to solve for, then we gain the benefits, but we're also able to leapfrog when it comes to technological development.

"The second thing that excites me about AI is the up-levelling effect that it has on the workforce, particularly for least skilled professionals. They stand to benefit the most when it comes to generative AI. What is challenging, though, is then to think about what's the wage gap that will persist."

Eriksen said: "The multi-billion dollar question to me as a business leader is how to get value and how to get returns from the significant investments in AI, both financial results but also environmental results."

But, he added, it starts with people and how they are using the technology.

"If people or employees don't trust the technology, they will never use it."

The way we do science is going to fundamentally change in the coming years and decades, said Kitano.

Labour Markets For the Next Generation 13:15

With around 25% of youth globally not in work, attending school, or undergoing skills training, we look at the employment opportunities tht lie ahead.

And, with the rates even higher in emerging economies and among women, how can the public and private sectors work together to design policies and labour markets to unlock their potential?

Airlangga Hartarto , Indonesia's Coordinating Minister for Economic Affairs, joined Badr Al-Badr , CEO, Mohammed Bin Salman Foundation (MiSK); Jay Collins , Vice-Chairman, Global Public Sector, Citi and Emon Shakoor , Global Shaper, Riyadh Hub to discuss.

Reskilling is important said Al-Badr. The main challenge is balancing creating new jobs for the new entrants with also upskilling the existing workforce.

"Unemployment is happening from the changing nature of jobs, from technological disruptions, AI disruption. For that reason, job creation, reskilling is really important."

We need to create new employment, and new employment is only happening when we have, economic growth... Indonesia is using digitalization as a new engine of growth.

Rather than crushing employment, generative AI is actually growing employment among the SMEs who can be the most agile and adapt, said Collins.

"It's not destroying their jobs. It's allowing them to be smarter and more efficient, sell more faster, and be leaner and meaner as they do it. It's a fantastic story... 70% of the job growth in the OECD is small and medium-sized businesses.

"If you can't figure that out, you don't have a proposition to deal with the future of work."

Shakoor said inclusion of women, young people and marginalized communities would drive growth and job creation.

"I think of diversity as meaning being invited to the party. But inclusivity is being asked to dance. As world leaders, as government leaders, as leaders of our organizations, we must ensure that the people that work with us are always being asked to dance, that they truly feel included in these environments."

Economic Perspectives for the Middle East and North Africa 15:45

Adel bin Ahmed Al Jubeir , Saudi Arabia's Minister of State for Foreign Affairs, and Member of the Council of Ministers and Climate Envoy joined Jordan's Minister of Finance, Mohamad Al-Ississ ; Karin von Hippel , Director-General, Royal United Services Institute for Defence and Security Studies and Jihad Azour , Director, Middle East and Central Asia Department, International Monetary Fund, and Ahmed Galal Ismail , CEO, Majid Al Futtaim Holding, to look at the risks facing the region's economy and the prospects for stability and resilience.

Azour began by outlining some of the findings from the IMF's Regional Economic Outlook for the Middle East and Central Asia .

He said: "This year is a tale of two cities. It's a year of shocks and at the same time, a year of resilience, a year of recovery. But also a year of very slow growth, a year of high inflation in certain countries, and very well managed inflation.

"You can read the situation in in different ways, which makes it very challenging to set the same set of policy recommendations for countries."

Al Jubeir agreed with Azour that building buffers was key to resilience in the face of uncertainty.

"We're at an inflection point when it comes to AI and technology, biotech... the one you can be certain of is uncertainty is here to stay. Top of your priority list is how to invest in enhancing your buffers so that you can increase your resilience.

"The reality is decision-makers cannot expect the normal way of doing business to be the way forward."

Ismail said we need to bridge the deficit of hope: "I think from a private sector point of view, we need to deal with the current short-term challenges, but we must not lose hope that this region is on the brink of potential, a new golden economic age."

Where Manufacturing and Tech Collide 11:30

Join leaders from the public and private sectors to explore the impact of cutting-edge technologies on the efficiency and performance of manufacturing systems globally, as we ask what are the risks and opportunities.

Emerging Economies: How to Fix the Debt Problem? 13:15

With the cost of servicing debt rising rapidly, public and private sector voices look at how the global debt burden can be addressed.

Rejuvenating Growth 16:00

Global growth is forecast to remain relatively subdued this year at 3.1%. So, against this backdrop of sustained slower growth, what policies can help boost economic prospects?

Pre-reads, publications and Forum insights

Making digital job creation a reality - launching soon.

This forthcoming white paper will follow up on The Rise of Global Digital Jobs . It will illustrate where these opportunities are most prevalent and provide a framework for governments or employers to expand a global digital workforce.

Shaping the Future of Learning: The Role of AI in Education 4.0 - Launching soon

The third iteration of Education 4.0 Lighthouses will look at specific policies and practices used by governments, educators, and employers to effectively deploy new technologies effectively in primary and secondary education.

Explore other reports

The Future of Growth Report 2024

Released at our Annual Meeting in Davos, this report outlines a multidimensional framework to assess the quality of economic growth in 107 economies. It explores economic growth across four areas - innovativeness, inclusiveness, sustainability, and resilience.

Navigating the future of growth: a new tool for a new era

Chief Economists Outlook: January 2024

Also released at our Annual Meeting in Davos, the latest edition of our Chief Economists Outlook series looks at key economic trends, and explores the prospects for growth.

Space: The $1.8 Trillion Opportunity for Global Economic Growth

This World Economic Forum and McKinsey report demonstrates the potential value of the space economy, particularly if we can lower costs and improve access.

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