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The International Air Transport Association (IATA) downgraded its traffic forecast for 2020 to reflect a weaker-than-expected recovery, as evidenced by a dismal end to the summer travel season in the Northern Hemisphere. IATA now expects full-year 2020 traffic to be down 66 per cent compared to 2019. The previous estimate was for a 63 per cent decline.
August passenger demand continued to be hugely depressed against normal levels, with revenue passenger kilometers (RPKs) down 75.3 per cent compared to August 2019. This was only slightly improved compared to the 79.5 per cent annual contraction in July. Domestic markets continued to outperform international markets in terms of recovery, although most remained substantially down on a year ago. August capacity (available seat kilometers or ASKs) was down 63.8 per cent compared to a year ago, and load factor plunged 27.2 points to an all-time low for August of 58.5 per cent.
Based on flight data, the recovery in air passenger services was brought to a halt in mid-August by a return of government restrictions in the face of new COVID-19 outbreaks in a number of key markets. Forward bookings for air travel in the fourth quarter show that the recovery since the April low point will continue to falter. Whereas the decline in year-on-year growth of global RPKs was expected to have moderated to -55 per cent by December, a much slower improvement is now expected with the month of December forecast to be down 68 per cent on a year ago.
“August’s disastrous traffic performance puts a cap on the industry’s worst-ever summer season,” said Alexandre de Juniac, IATA’s director general and CEO. “International demand recovery is virtually non-existent and domestic markets in Australia and Japan actually regressed in the face of new outbreaks and travel restrictions. A few months ago, we thought that a full-year fall in demand of -63 per cent compared to 2019 was as bad as it could get. With the dismal peak summer travel period behind us, we have revised our expectations downward to -66 per cent.”
International passenger markets
August international passenger demand plummeted 88.3 per cent compared to August 2019, mildly improved over the 91.8 per cent decline recorded in July. Capacity sagged 79.5 per cent, and load factor fell 37.0 percentage points to 48.7 per cent.
- Asia-Pacific airlines’ August traffic sank 95.9 per cent compared to the year-ago period, barely budged from a 96.2 per cent drop in July, and the steepest contraction among regions. Capacity dived 90.4 per cent and load factor shrank 48.0 percentage points to 34.8 per cent.
- European carriers’ August demand plunged 79.9 per cent compared to last year, improved from an 87.0 per cent drop in July, as travel restrictions were lifted in the Schengen Area. However, more recent flight data suggests this trend has reversed amid a return to lockdown and quarantine in some markets. Capacity fell 68.7 per cent and load factor dropped by 32.1 percentage points to 57.1 per cent, which was the highest among regions.
- Middle Eastern airlines had a 92.3 per cent fall in demand for August, compared with a 93.3 per cent decline in July. Capacity collapsed 81.9 per cent, and load factor sank 47.1 percentage points to 35.3 per cent.
- North American carriers’ traffic tumbled 92.4 per cent in August, little changed compared to 94.4 per cent decline in July. Capacity fell 82.6 per cent, and load factor plunged 49.9 percentage points to 38.5 per cent.
- Latin American airlines had a 93.4 per cent demand drop in August compared to the same month last year, versus a 94.9 per cent drop in July. Capacity crumbled 90.1 per cent and load factor dropped 27.8 percentage points to 56.1 per cent, second highest among the regions.
- African airlines’ traffic sank 90.1 per cent in August, slightly improved over a 94.6 per cent decline in July. Capacity contracted 78.4 per cent, and load factor fell 41.0 percentage points to 34.6 per cent, which was the lowest among regions.
“Traditionally, cash generated during the busy summer season in the Northern Hemisphere provides airlines with a cushion during the lean autumn and winter seasons,” said de Juniac. “This year, airlines have no such protection. Absent additional government relief measures and a reopening of borders, hundreds of thousands of airline jobs will disappear. But it is not just airlines and airline jobs at risk. Globally, tens of millions of jobs depend on aviation. If borders don’t reopen the livelihoods of these people will be at grave risk. We need an internationally agreed regime of pre-departure COVID-19 testing to give governments the confidence to reopen borders, and passengers the confidence to travel by air again.”