Airlines won't recover from virus until 2024, says International Air Transport Association

Published: 4 August 2020 - 7:15 a.m.
By: Hotelier Middle East Staff
Airlines around the world are in the coronavirus crisis for the long-haul with global passenger traffic not expected return to pre-COVID-19 levels until 2024, a year later than previously projected.

That is according to the International Air Transport Association (IATA), which has forecast that while short-haul travel is still expected to recover faster than long-haul travel, global passenger numbers for 2020 will decline by 55 percent compared to 2019, worsened from the April forecast of 46 percent.

“Passenger traffic hit bottom in April, but the strength of the upturn has been very weak,” said Alexandre de Juniac, IATA’s CEO.

“What improvement we have seen has been domestic flying. International markets remain largely closed. And 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 the global economy.”

June 2020 passenger traffic foreshadowed the slower-than-expected recovery. Traffic fell 86.5 percent compared to the same period last year. That is only slightly improved from a 91 percentA contraction in May. This was driven by rising demand in domestic markets, particularly China. The June load factor set an all-time low for the month at 57.6 percent.

IATA is partly blaming slow virus containment in the US and developing economies for the delay in recovery. It said there is little sign of virus containment in many important emerging economies, which in combination with the US, represent around 40 percent of global air travel markets. Their continued closure, particularly to international travel, is “a significant drag on recovery”, a statement read.

Reduced business travel due to shrinking corporate travel budgets is also expected to dampen recovery. And while pent-up demand exists for visiting friends and relatives and leisure travel, consumer confidence is weak in the face of concerns over job security and rising unemployment, as well as risks of catching COVID-19, IATA said. Some 55 percent of respondents to IATA’s June passenger survey don’t plan to travel in 2020.

De Juniac said that governments need to continue offering relief measures to airlines, including direct financial support, throughout the winter season.

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