Munich Airport Terminal. Photo: Munich Airport

MIAMI – The International Air Transport Association (IATA) shared an updated global passenger forecast. The report shows that recovery in air traffic has been slower than expected.

The organization says global passenger traffic (revenue passenger kilometers RPKs) will not return to pre-COVID-19 levels until 2024. This is a year later than previously expected.

IATA expects short-haul travel to recover much faster. This means passenger numbers will recover faster than traffic measured in RPKs. However, IATA has pushed said recovery back by a year, from 2022 to 2023.

For 2020, IATA expects global passenger numbers to be 55% less than in 2019. This is worse than the April forecast of 46%. In June, RPK was down 86.5% from the previous year which improved from a 91% contraction in May.

Domestic travel in markets like China helped RPK. Still, the June load factor set an all-time low for the month at 57.6%.

Annual Air Passenger Volumes | Source: IATA Economics, IATA Monthly Statistics

Recent Trends Point to Slow Recovery

IATA points towards the poor containment in the US and in other emerging economies. In total, these regions make up 40% of global air travel markets. Hence, they are the main reason why recovery has been so slow.

The Association also says reduced corporate travel is a major reason for the slow recovery as companies suffer financial constraints. The industry sees video conferencing as possibly having created significant inroads as a substitute for in-person meetings.

Also, as consumer confidence remains low. Markets for VFR (visiting friends and relatives), and leisure travel struggle due to rising unemployment and risks of catching COVID-19.

IATA’s June passenger survey says 55% of respondents do not plan to travel in 2020. Although passenger numbers should rise to 62% in 2021, they will still be down by almost 30% from 2019 levels.

Economic Conditions | Source: Markit via IATA

Comments from IATA Director General

Alexandre de Juniac, IATA’s Director General and CEO, stated the following:

“Passenger travel hit bottom in April but the strength of the upturn has been very weak. What improvement we have seen has been domestic flying. International markets remain largely closed.”

The CEO notes that the UK’s weekend decision to impose a blanket quarantine on all travelers returning from Spain has depressed consumer confidence.

“In many parts of the world infections are still rising. All of this points to a longer recovery period and more pain for the industry and global economy.”

International Passenger Markets

International traffic in June shrank by 96.8% compared to June 2019, only slightly improved over a 98.3% decline in May.

Asian pacific carriers’ traffic was down 97.1% compared to June 2019; capacity fell 93.4 percent and load factor fell 45.8 points down to 35.6%.

European airlines saw demand fall 96.7% in June versus a year ago. Their capacity was down 94.4% and load factor was down 35.7% to 52.0%.

Middle Eastern carriers collapsed 96.1% from last year. The load factor went down to just 33.3% down 43% from the previous year.

In North America, airlines saw a 97.2% traffic decline in June. In terms of the load factor, it went down to 34.1% down 53.8% from last June.

In Latin America, airlines saw a 96.6% decline in traffic, and load factor was down 17.7 percentage points. That is 66.2%, the worst among any region.

In Africa, carriers saw traffic sink 98.1% in June, with the load factor dropping 62.1 points down to just 8.9%.

Regional Highs and Lows | Source: IATA Economics, IATA Monthly Statistics

Domestic Passenger Markets

Worldwide, domestic traffic demand fell 67.9% in June, improved from a 78.4% decline in May. Capacity was down 55.9% and load factor dropped 22.8 points to 62.9%

Chinese carriers continued to lead the recovery. Chinese traffic was down 35.5% in June compared to June, 2019, but raised from a 46.3% decline in May.

Japanese airlines saw improvement in domestic demand after the state of COVID-19 emergency was removed in late May. Domestic RPKs fell by 74.9% when compared year-on-year in June, with around 90% annual declines in the previous two months.

Domestic Flights by Region | Source: IATA Economics analysis based on data provided under license by FlightRadar24. All rights reserved

IATA Gives Advice To Governments

IATA urges governments to implement a layer of measures. These include the International Civil Aviation Organization’s (ICAO’s) global guidelines for restoring air connectivity. See ICAO’s Guidance for Air Travel through the COVID-19 Public Health Crisis.

“Domestic traffic improvements notwithstanding, international traffic, which in normal times accounts for close to two-thirds of global air travel, remains virtually non-existent.”

Most countries are still closed to international arrivals or have imposed quarantines. IATA’s CEO says this has the same effect as an “outright lockdown. Summer — our industry’s busiest season — is passing by rapidly.”

IATA Director & CEO Alexandre de Juniac | Photo: Airways Magazine File

Accurate COVID-19 Contact Tracing

De Junia also said that there was little chance for an upswing in international air travel unless governments move decisively.

The CEO says that countries must quickly “find alternatives to border closures, confidence-destroying stop-start re-openings, and demand-killing quarantine.”

IATA says accurate contact tracing will play a huge role in limiting the spread of the virus. This is important as the demand for air travel rises again.

The organization has also shared its June Air Passenger Market Analysis and June Data and Revised Projections for viewing.

Featured image: Munich Airport Terminal. Photo: Munich Airport