Category Archives: IATA

IATA: Negative passenger demand trend continues in February

The International Air Transport Association (IATA) announced that passenger traffic fell in February 2021, both compared to pre-COVID levels (February 2019) and compared to the immediate month prior (January 2021).

Because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted all comparisons are to February 2019, which followed a normal demand pattern.

  • Total demand for air travel in February 2021 (measured in revenue passenger kilometers or RPKs) was down 74.7% compared to February 2019. That was worse than the 72.2% decline recorded in January 2021 versus two years ago.
  • International passenger demand in February was 88.7% below February 2019, a further drop from the 85.7% year-to-year decline recorded in January and the worst growth outcome since July 2020. Performance in all regions worsened compared to January 2021.
  • Total domestic demand was down 51.0% versus pre-crisis (February 2019) levels. In January it was down 47.8% on the 2019 period. This largely was owing to weakness in China travel, driven by government requests that citizens stay at home during the Lunar New Year travel period.

“February showed no indication of a recovery in demand for international air travel. In fact, most indicators went in the wrong direction as travel restrictions tightened in the face of continuing concerns over new coronavirus variants. An important exception was the Australian domestic market. A relaxation of restrictions on domestic flying resulted in significantly more travel. This tells us that people have not lost their desire travel. They will fly, provided they can do so without facing quarantine measures,” said Willie Walsh, IATA’s Director General.

FEBRUARY 2021 (% VS FEB 2019) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market
100.0%
-74.7%
-63.1%
-25.3%
55.4%
Africa
1.9%
-66.1%
-53.6%
-19.0%
51.6%
Asia Pacific
38.6%
-74.9%
-64.8%
-23.8%
59.1%
Europe
23.6%
-82.8%
-75.0%
-25.4%
56.3%
Latin America
5.7%
-62.4%
-55.1%
-13.3%
68.3%
Middle East
7.4%
-81.7%
-66.8%
-32.5%
39.8%
North America
22.7%
-66.1%
-48.1%
-27.9%
52.7%

1) % of industry RPKs in 2020    2) Change in load factor vs. the same month in 2019    3) Load Factor Level

International Passenger Markets

Asia-Pacific airlines’ February traffic was down 95.2% compared to February 2019, little changed from the 94.8% decline registered for January 2021 compared to January 2019. The region continued to suffer from the steepest traffic declines for an eighth consecutive month. Capacity was down 87.5% and the load factor sank 50.0 percentage points to 31.1%, the lowest among regions.

European carriers recorded an 89.0% decline in traffic in February versus February 2019, substantially worse than the  83.4% decline in January compared to the same month in 2019. Capacity sank 80.5% and load factor fell by 36.0 percentage points to 46.4%.

Middle Eastern airlines saw demand fall 83.1% in February compared to February 2019, worsened from an 82.1% demand drop in January, versus the same month in 2019. Capacity fell 68.6%, and load factor declined 33.4 percentage points to 39.0%.

North American carriers’ February traffic sank 83.1% compared to the 2019 period, a deterioration from a 79.2% decline in January year to year. Capacity sagged 63.9%, and load factor dropped 41.9 percentage points to 36.7%.

Latin American airlines experienced an 83.5% demand drop in February, compared to the same month in 2019, markedly worse than the 78.5% decline in January 2019. February capacity was 75.4% down compared to February 2019 and load factor dropped 26.7 percentage points to 54.6%, highest among the regions for a fifth consecutive month.

African airlines’ traffic dropped 68.0% in February versus February two years ago, which was a setback compared to a 66.1% decline recorded in January compared to January 2019. February capacity contracted 54.6% versus February 2019, and load factor fell 20.5 percentage points to 49.1%.

Domestic Passenger Markets

FEBRUARY 2021 (%VS FEB 2019) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic
54.3%
-51.04%
-37.1%
-18.3%
64.3%
Dom. Australia
0.7%
-60.5%
-59.4%
-2.1%
75.8%
Dom. Brazil
1.6%
-34.9%
-30.3%
-5.4%
77.0%
Dom. China P.R.
19.9%
-51.2%
-34.7%
-22.2%
65.5%
Dom India
2.1%
-30.8%
-17.5%
-14.4%
74.9%
Dom. Japan
1.4%
-72.8%
-59.4%
-23.7%
48.1%
Dom. Russian Fed.
3.4%
2.9%
-5.4%
6.7%
83.4%
Dom. US
16.6%
-56.1%
-38.3%
-23.5%
58.0%

1) % of industry RPKs in 2020    2) Change in load factor vs. the same month in 2019    3) Load Factor Level

Australia’s domestic traffic was down 60.5% in February compared to February 2019, dramatically improved compared to the 77.3% decline in January over 2019. Some state border restrictions were eased in early February.

US domestic traffic declined 56.1% in February versus the same month in 2019, improved from the 58.4% decline in January compared to two years ago. The improvement was driven by falling rates of contagion and accelerating vaccinations.

The Bottom Line

“The US Centers for Disease Control and Prevention (CDC) recently stated that vaccinated individuals can travel safely. That is good news. We have also recently seen Oxera-Edge Health research highlighting the efficacy of fast, accurate and affordable rapid tests for COVID-19. These developments should reassure governments that there are ways to efficiently manage the risks of COVID-19 without relying on demand-killing quarantine measures and/or expensive and time-consuming PCR testing,” said Walsh.

“Two key components for an efficient restart of travel need to be urgently progressed. The first is the development of global standards for digital COVID-19 test and/or vaccination certificates. The second is government agreement to accept certificates digitally. Our experiences to date already demonstrate that paper-based systems are not a sustainable option. They are vulnerable to fraud. And, even with the limited amount of flying today, the check-in process needs pre-COVID-19 staffing levels just to handle the paperwork.
Paper processes will not be sustainable when travel ramps up. The IATA Travel Pass app was developed precisely in anticipation of this need to manage health credentials digitally. Its first full implementation trial is focused on Singapore, where the government has already announced that it will accept health certificates through the app. This will be an essential consideration for all governments when they are ready to relink their economies with the world through air travel,” said Walsh.

IATA: From Bad to Worse: January Passenger Demand Falls Further

The International Air Transport Association (IATA) announced that passenger traffic fell in January 2021, both compared to pre-COVID levels (January 2019) and compared to the immediate month prior (December 2020).

Because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted all comparisons are to January 2019 which followed a normal demand pattern.

  • Total demand in January 2021 (measured in revenue passenger kilometers or RPKs) was down 72.0% compared to January 2019. That was worse than the 69.7% year-over-year decline recorded in December 2020.
  • Total domestic demand was down 47.4% versus pre-crisis (January 2019) levels. In December it was down 42.9% on the previous year. This weakening is largely driven by stricter domestic travel controls in China over the Lunar New Year holiday period.
  • International passenger demand in January was 85.6% below January 2019, a further drop compared to the 85.3% year-to-year decline recorded in December.

“2021 is starting off worse than 2020 ended and that is saying a lot. Even as vaccination programs gather pace, new COVID variants are leading governments to increase travel restrictions. The uncertainty around how long these restrictions will last also has an impact on future travel. Forward bookings in February this year for the Northern Hemisphere summer travel season were 78% below levels in February 2019,” said Alexandre de Juniac, IATA’s Director General and CEO.

JANUARY 2021 (%CHG. VS 2019) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market
100.0%
-72.0%
-58.7%
-25.7%
54.1%
Africa
1.9%
-63.9%
-53.0%
-16.4%
54.4%
Asia Pacific
38.6%
-71.5%
-59.0%
-24.8%
56.6%
Europe
23.7%
-77.4%
-68.7%
-22.4%
57.6%
Latin America
5.7%
-58.0%
-49.5%
-13.9%
68.5%
Middle East
7.4%
-80.7%
-65.8%
-32.4%
42.2%
North America
22.7%
-67.5%
-46.5%
-31.2%
48.4%

1) % of industry RPKs in 2020    2) Change in load factor vs. the same month in 2019    3) Load Factor Level

International Passenger Markets

Asia-Pacific airlines’ January traffic plummeted 94.6% compared to the 2019 period, virtually unchanged from the 94.4% decline registered for December 2020 compared to a year ago. The region continued to suffer from the steepest traffic declines for a seventh consecutive month. Capacity dropped 86.5% and load factor sank 49.4 percentage points to 32.6%, by far the lowest among regions.

European carriers had an 83.2% decline in traffic in January versus January 2019, worsened from an 82.6% decline in December compared to the same month in 2019. Capacity sank 73.6% and load factor fell by 29.2 percentage points to 51.4%.

Middle Eastern airlines saw demand plunge 82.3% in January compared to January 2019, which was broadly unchanged from an 82.6% demand drop in December versus a year ago. Capacity fell 67.6%, and load factor declined 33.9 percentage points to 40.8%.

North American carriers’ January traffic fell 79.0% compared to the 2019 period, up slightly from a 79.5% decline in December year to year. Capacity sagged 60.5%, and load factor dropped 37.8 percentage points to 42.9%.

Latin American airlines experienced a 78.5% demand drop in January, compared to the same month in 2019, worsened from a 76.2% decline in December year-to-year. January capacity was 67.9% down compared to January 2019 and load factor dropped 27.2 percentage points to 55.3%, highest among the regions for a fourth consecutive month.

African airlines’ traffic dropped 66.1% in January, which was a modest improvement compared to a 68.8% decline recorded in December versus a year ago. January capacity contracted 54.2% versus January 2019, and load factor fell 18.4 percentage points to 52.3%.

Domestic Passenger Markets

JANUARY 2021 (%CHG. VS 2019) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic
54.3%
-47.4%
-30.5%
-19.3%
60.1%
Dom. Australia
0.7%
-81.6%
-77.8%
-13.3%
64.8%
Dom. Brazil
1.6%
-31.4%
-29.4%
-2.4%
81.6%
Dom. China P.R.
19.9%
-33.9%
-15.1%
-18.2%
64.0%
Dom India
2.1%
-37.6%
-22.5%
-16.8%
69.3%
Dom. Japan
1.5%
-71.3%
-39.9%
-35.0%
31.9%
Dom. Russian Fed.
3.4%
5.5%
-0.7%
4.7%
80.1%
Dom. US
16.6%
-60.3%
-37.8%
-28.7%
50.5%

1) % of industry RPKs in 2020    2) Change in load factor vs. the same month in 2019    3) Load Factor Level

China’s domestic traffic was down 33.9% in January compared to January 2019, dramatically worsened compared to the 8.5% year-over-year decline in December. The fall was owing to stricter traffic controls ahead of the Lunar New Year holiday period amid several localized COVID-19 outbreaks.

Russia’s domestic traffic, by contrast, rose 5.5% compared to January 2019, a turnaround from the 12.0% year-to-year decline in December versus the same month in 2019. It was driven by a fall in COVID-19 cases since a peak late in December and by national holidays in the first week of the month.

The Bottom Line

“To say that 2021 has not gotten off to a good start is an understatement. Financial prospects for the year are worsening as governments tighten travel restrictions. We now expect the industry to burn through $75-$95 billion in cash this year, rather than turning cash positive in the fourth quarter, as previously thought. This is not something that the industry will be able to endure without additional relief measures from governments.

Increased testing capability and vaccine distribution are the keys for governments to unlock economic activity, including travel. It is critical that governments build and share their restart plans along with the benchmarks that will guide them. This will enable the industry to be prepared to energize the recovery without any unnecessary delay,” said de Juniac.

Global standards to securely record test and vaccination data in formats that will be internationally recognized are urgently needed. “These will be critical to restarting international travel if governments continue to require verified testing or vaccination data. IATA will soon launch the IATA Travel Pass to help travelers and governments manage digital health credentials. But the full benefit of IATA Travel Pass cannot be realized until governments agree the standards for the information they want,” said de Juniac.

IATA: Airlines to remain cash negative through 2021

IATA issued this report:

The International Air Transport Association (IATA) released new analysis showing that the airline industry is expected to remain cash negative throughout 2021. Previous analysis (November 2020) indicated that airlines would turn cash positive in the fourth quarter of 2021. At the industry level, airlines are now not expected to be cash positive until 2022.

Estimates for cash burn in 2021 have ballooned to the $75 billion to $95 billion range from a previously anticipated $48 billion. The following factors play into this estimate:

  • Weak Start for 2021: It is already clear that the first half of 2021 will be worse than earlier anticipated. This is because governments have tightened travel restrictions in response to new COVID-19 variants. Forward bookings for summer (July-August) are currently 78% below levels in February 2019 (comparisons to 2020 are distorted owing to COVID-19 impacts).
  • Optimistic Scenario: From this lower starting point for the year, an optimistic scenario would see travel restrictions gradually lifted once the vulnerable populations in developed economies have been vaccinated, but only in time to facilitate tepid demand over the peak summer travel season in the northern hemisphere. In this case 2021 demand would be 38% of 2019 levels. Airlines would burn through $75 billion of cash over the year. But cash burn of $7 billion in the fourth quarter would be significantly improved from an anticipated $33 billion cash burn in the first quarter.
  • Pessimistic Scenario: This scenario would see airlines burn through $95 billion over the year. There would be an improving trend from a $33 billion cash burn in the first quarter reducing to $16 billion in the fourth quarter. The driver of this scenario would be governments retaining significant travel restrictions through the peak northern summer travel season. In this case, 2021 demand would only be 33% of 2019 levels.

“With governments having tightening border restrictions, 2021 is shaping up to be a much tougher year than previously expected. Our best-case scenario sees airlines burning through $75 billion in cash this year. And it could be as bad as $95 billion. More emergency relief from governments will be needed. A functioning airline industry can eventually energize the economic recovery from COVID-19. But that won’t happen if there are massive failures before the crisis ends. If governments are unable to open their borders, we will need them to open their wallets with financial relief to keep airlines viable,” said Alexandre de Juniac, IATA’s Director General and CEO.

With airlines now expected to burn cash throughout 2021 it is vital that governments and the industry are fully prepared to restart the moment governments agree that it is safe to re-open borders. That makes three initiatives critical:

Planning

Preparing the industry to safely restart after a year or more of disruption will take careful planning and months of preparation. Governments can ensure that airlines are prepared to reconnect people and economies by working with industry to develop the benchmarks and plans that would enable an orderly and timely restart.

“The UK has set a good example. Earlier this week it laid out a structure for re-opening based on an improvement in the COVID-19 situation. This gives airlines a framework to plan the restart, even if it needs to be adjusted along the way. Other governments should take note as a best practice for working with industry,” said de Juniac.

Health Credentials

It is becoming clear that vaccines and testing will play a role as the pandemic comes under control and economies ramp up, including the travel sector. The IATA Travel Pass will enable travelers to securely control their health data and share it with relevant authorities. A growing list of airlines—including Air New Zealand, Copa Airlines, Etihad Airways, Emirates, Qatar Airways, Malaysia Airlines, RwandAir, and Singapore Airlines—have done or are committed to doing trials with IATA Travel Pass.

Efficient digital management of health credentials is vital to restart. Manual processes will not be able to cope with volumes once the recovery begins. Digital solutions must be secure, work with existing systems, align with global standards and respect data privacy. In developing the IATA Travel Pass these are fully in focus. The IATA Travel App will help to set the bar very high for managing health credentials, protecting against fraud and enabling a convenient travel process. While there is choice in the market for solutions, there should be no compromise on the fundamentals, or we risk failing systems, disappointed governments and travelers, and a delayed restart,” said de Juniac.

Global Standards: As vaccination programs and testing capacity expand, two developments have become critical—global standards to record tests and vaccines; and a plan to retrospectively record those who have already been vaccinated.

“Speed is critical. Fraudulent COVID-19 test results are already proving to be an issue. And as vaccine programs ramp up governments are using paper processes and differing digital standards to record who has been vaccinated. These are not the conditions needed to support a successful restart at scale when governments open borders. The WHO, ICAO, and OECD are working on standards, but each day without them means the challenge gets bigger. We need an early conclusion by competent authorities that the industry can plan around,” said de Juniac.

“Even as governments focus on managing the COVID-19 crisis, we must be thinking a step ahead to the plans, tools and standards needed to restart flying and energize the economic recovery from COVID-19. Working in partnership is nothing new for airlines or for governments. It’s how we have delivered safe, efficient, and reliable connectivity for decades. For a year it’s been lockdowns and restrictions as vaccines were developed and testing capacity expanded. The reason for all the pain that this has caused is to keep people safe and to eventually be able to retore their well-being and that of the economy. With good news on vaccines and growing testing capacity, there is a glimmer of light at the end of the tunnel. So, it’s the time to ask governments for their restart plan and to offer any support from industry that could help,” said de Juniac.

IATA: COVID-19 shakes up the rankings of the world airports for connections (China now has the top four cities)

The International Air Transport Association (IATA) released data revealing that the COVID-19 crisis has had a devastating impact on international connectivity, shaking up the rankings of the world’s most connected cities.

  • London, the world’s number one most connected city in September 2019, has seen a 67% decline in connectivity. By September 2020, it had fallen to number eight.
  • Shanghai is now the top ranked city for connectivity with the top four most connected cities all in China—Shanghai, Beijing, Guangzhou and Chengdu.
  • New York (-66% fall in connectivity), Tokyo (-65%), Bangkok (-81%), Hong Kong (-81%) and Seoul (-69%) have all exited the top ten.
  • The study reveals that cities with large numbers of domestic connections now dominate, showing the extent to which international connectivity has been shut down.
RANKING SEPTEMBER 2019 SEPTEMBER 2020
1
London
Shanghai
2
Shanghai
Beijing
3
New York
Guangzhou
4
Beijing
Chengdu
5
Tokyo
Chicago
6
Los Angeles
Shenzhen 
7
Bangkok
Los Angeles
8
Hong Kong
London
9
Seoul
Dallas
10
Chicago
Atlanta

“The dramatic shift in the connectivity rankings demonstrates the scale at which the world’s connectivity has been re-ordered over the last months. But the important point is that rankings did not shift because of any improvement in connectivity. That declined overall in all markets. The rankings shifted because the scale of the decline was greater for some cities than others. There are no winners, just some players that suffered fewer injuries. In a short period of time we have undone a century of progress in bringing people together and connecting markets. The message we must take from this study is the urgent need to re-build the global air transport network,” said Sebastian Mikosz, IATA’s Senior Vice President for Member External Relations.

IATA’s 76th Annual General Meeting called on governments to safely re-open borders using testing. “The systematic testing of travelers is the immediate solution to rebuilding the connectivity that we have lost. The technology exists. The guidelines for implementation have been developed. Now we need to implement, before the damage to the global air transport network becomes irreparable,” said Mikosz.

Air transport is a major engine of the global economy. In normal times some 88 million jobs and $3.5 trillion in GDP is supported by aviation. More than half of this employment and economic value is at risk from the collapse in global air travel demand. “Governments must realize that there are major consequences for peoples’ lives and livelihoods. At least 46 million jobs supported by air transport are in peril. And the strength of the economic recovery from COVID-19 will be severely compromised without the support of a functioning air transport network,” said Mikosz.

IATA’s air connectivity index measures how well connected a country’s cities are to other cities around the world, which is critical for trade, tourism, investment and other economic flows. It is a composite measure reflecting the number of seats flown to the destinations served from a country’s major airports and the economic importance of those destinations.

COVID-19 impacts on connectivity by region (April 2019-April 2020, IATA Connectivity Index measure)

Africa suffered a 93% decline in connectivity. Ethiopia managed to buck the trend. During the first peak of the pandemic in April 2020, Ethiopia maintained connections with 88 international destinations. Many aviation markets reliant on tourism, such as Egypt, South Africa and Morocco, were particularly severely impacted.

Asia-Pacific saw a 76% decline in connectivity. Stronger domestic aviation markets, such as China, Japan and South Korea performed better among the most connected countries in the region. Despite the relatively large domestic aviation market, Thailand was severely impacted perhaps because of the country’s high reliance on international tourism.

Europe experienced a 93% fall in connectivity. European countries saw significant declines across most markets, although Russian connectivity has held up better than Western European countries.

Middle East countries saw connectivity decline by 88%. With the exception of Qatar, connectivity levels reduced by more than 85% for the five most connected countries in the region. Despite border closures, Qatar allowed passengers to transit between flights. It was also an important hub for air cargo.

North American connectivity declined 73%. Canada’s connectivity (-85% decline) was hit more heavily than the United States (-72%). In part, this reflects the large domestic aviation market in the United States, which despite a significant passenger decline, has continued to support connectivity.

Latin America suffered a 91% collapse in connectivity. Mexico and Chile performed relatively better than the other most connected countries, perhaps due to the timing of domestic lockdowns in these countries and how strictly they were enforced.

Before the pandemic

Prior to the COVID-19 pandemic, the growth in air connectivity was a global success story. Over the last two decades the number of cities directly linked by air (city-pair connections) more than doubled while over the same period, air travel costs fell by around half.

The top-ten most connected countries in the world mostly saw significant increases over the 2014-2019 period. The United States remained the most connected country, with growth of 26%. China, in second place, grew connectivity by 62%. Other standout performers in the top ten included fourth-place India (+89%) and ninth-place Thailand (+62%).

IATA’s research explored the benefits of increased air connectivity. The standout conclusions were:

  • A positive link between connectivity and productivity. A 10% rise in connectivity, relative to a country’s GDP, will boost labour productivity levels by 0.07%.
  • The impact is greater for developing countries. Investments in air transport capacity in countries where connectivity is currently relatively low will have a much larger impact on their productivity and economic success than a similar level of investment in a relatively developed country.
  • Tourism revenue may be reinvested to form capital assets. Air transport has contributed to greater employment opportunities and wider economic benefits through the tourism catalytic effects, particularly in small island states. In emerging market economies, there may be a structural shortage of demand, so tourism spend can fill in the gap.
  • Tax revenues increase from enhanced economic activity. Air connectivity facilitates economic activity and growth in a given country, which may have a positive impact on government tax revenues.

View the connectivity presentation (pdf).

Meanwhile air cargo is recovering faster than passenger travel:

IATA AGM calls for reopening borders with testing and without quarantine

The International Air Transport Association (IATA) 76th Annual General Meeting (AGM) unanimously resolved to urgently call on governments to re-open borders to travelIATA is proposing systematic testing of international travelers which would permit the lifting of border restrictions and provide an alternative to current quarantine rules. 

Quarantines essentially kill demand for air travel and governments need to immediately consider the drastic socio-economic effect this is having. International air travel continues to be down 90% on 2019 levels. Current estimates are that as many as 46 million jobs supported by air travel could be lost and that the economic activity sustained by aviation will be reduced by US $1.8 trillion. 

“People want and need global mobility. The International Civil Aviation Organization (ICAO) Take-off measures make flying safe. But border closures, movement restrictions and quarantine measures make travel impossible for most. We must manage how we live with the virus. But that does not have to mean destroying aviation, risking millions of jobs, crippling economies and tearing apart the international social fabric. We could safely open borders today with systematic COVID-19 testing, said Alexandre de Juniac, IATA’s Director General and CEO.   

In its resolution the AGM also:  

  • Reaffirmed the industry’s continuing commitment to implementing globally agreed biosafety protocols,  
  • Encouraged governments to implement guidance developed by ICAO 
  • Asked governments to ensure that aviation staff and international travelers are prioritized for COVID-19 vaccination once safe and effective treatments become available and health care workers and vulnerable groups have been protected. 

The AGM also reinforced the vital role of air transport in facilitating the global response to the pandemic, including the timely distribution of medicines, testing kits, protective equipment and eventually vaccines around the world.  

Reuters: Airlines need another $80 billion in aid to survive – IATA

From Reuters:

“Airlines will need $70-80 billion in aid to survive the coronavirus crisis, or another half again of the amount already received from governments, their global industry body IATA) warned.”

Read the full article.

IATA welcomes US Military report on low risk of catching COVID-19 on a flight

The International Air Transport Association (IATA) welcomed the release of the results of testing by the United States Transportation Command (US Transcom) confirming the low risk of COVID-19 transmission onboard an aircraft.

The US Transcom testing, which was conducted in August, found that “the overall exposure risk from aerosolized pathogens, like coronavirus, is very low” on the types of airline aircraft typically contracted to move Department of Defense (DOD) personnel and their families, US Transcom stated. More than 300 aerosol releases, simulating a passenger infected with COVID-19, were performed over eight days using United Airlines Boeing 767-300 and 777-200 twin-aisle aircraft.

“Last week, IATA reported that since the start of 2020 there have been 44 cases of COVID-19 reported in which transmission is thought to have been associated with a flight journey, out of 1.2 billion passenger journeys in 2020. The US Transcom research provides further evidence that the risk of infection onboard an aircraft appears to be very low, and certainly lower than many other indoor environments,” said Alexandre de Juniac, IATA’s Director General and CEO.

The US Transcom testing showed that the aerosol was “rapidly diluted by the high air exchange rates” of a typical aircraft cabin. Aerosol particles remained detectable for a period of less than six minutes on average. Both aircraft models tested removed particulate matter 15 times faster than a typical home ventilation system and 5-6 times faster “than the recommended design specifications for modern hospital operating or patient isolation rooms.” Testing was done with and without a mask for the simulated infected passenger.

The testing was conducted in partnership with Boeing and United Airlines, as well as the Defense Advanced Research Projects Agency (DARPA), Zeteo Tech, S3i and the University of Nebraska’s National Strategic Research Institute.

IATA: Looming cash crisis threatens airlines

IATA made this announcement:

The International Air Transport Association (IATA) warned that the airline industry will burn through $77 billion in cash during the second half of 2020 (almost $13 billion/month or $300,000 per minute), despite the restart of operations. The slow recovery in air travel will see the airline industry continuing to burn through cash at an average rate of $5 to $6 billion per month in 2021.

IATA called on governments to support the industry during the coming winter season with additional relief measures, including financial aid that does not add more debt to the industry’s already-highly-indebted balance sheet. To date, governments around the world have provided $160 billion in support, including direct aid, wage subsidies, corporate tax relief, and specific industry tax relief including fuel taxes.

IATA estimates that despite cutting costs just over 50% during the second quarter, the industry went through $51 billion in cash as revenues fell almost 80% compared to the year-ago period. The cash drain continued during the summer months, with airlines expected to go through an additional $77 billion of their cash during the second half of this year and a further $60-70 billion in 2021. The industry is not expected to turn cash positive until 2022.

Airlines have undertaken extensive self-help measures to cut costs. This includes parking thousands of aircraft, cutting routes and any non-critical expense and furloughing and laying off hundreds of thousands of experienced and dedicated employees.

Sector Wide Action Needed

“Government support for the entire sector is needed. The impact has spread across the entire travel value chain including our airport and air navigation infrastructure partners who are dependent on pre-crisis levels of traffic to sustain their operations. Rate hikes on system users to make up the gap would be the start of a vicious and unforgiving cycle of further cost pressures and downsizings. That will prolong the crisis for the 10% of global economic activity that is linked to travel and tourism,” said de Juniac.

There will be little appetite among consumers for cost increases. In a recent IATA survey, some two thirds of travelers have already indicated that they will postpone travel until the overall economy or their personal financial situation stabilizes. “Increasing the cost of travel at this sensitive time will delay a return to travel and keep jobs at risk,” said de Juniac.

According to the latest figures from the Air Transport Action Group, the severe downturn this year, combined with a slow recovery, threatens 4.8 million jobs across the entire aviation sector. Because each aviation job supports many more in the broader economy, the global impact is 46 million potential job losses and $1.8 trillion dollars of economic activity at risk.

IATA: The time to prepare for COVID-19 vaccine transport is now

IATA has issued this statement:

The International Air Transport Association (IATA) urged governments to begin careful planning with industry stakeholders to ensure full preparedness when vaccines for COVID-19 are approved and available for distribution. The association also warned of potentially severe capacity constraints in transporting vaccines by air.

Preparedness

Air cargo plays a key role in the distribution of vaccines in normal times through well-established global time- and temperature-sensitive distribution systems. This capability will be crucial to the quick and efficient transport and distribution of COVID-19 vaccines when they are available, and it will not happen without careful planning, led by governments and supported by industry stakeholders.

“Safely delivering COVID-19 vaccines will be the mission of the century for the global air cargo industry. But it won’t happen without careful advance planning. And the time for that is now. We urge governments to take the lead in facilitating cooperation across the logistics chain so that the facilities, security arrangements and border processes are ready for the mammoth and complex task ahead,” said IATA’s Director General and CEO, Alexandre de Juniac.

“Delivering billions of doses of vaccine to the entire world efficiently will involve hugely complex logistical and programmatic obstacles all the way along the supply chain. We look forward to working together with government, vaccine manufacturers and logistical partners to ensure an efficient global roll-out of a safe and affordable COVID-19 vaccine,” said Dr Seth Berkley, CEO of Gavi, the Vaccine Alliance.

Facilities:  Vaccines must be handled and transported in line with international regulatory requirements, at controlled temperatures and without delay to ensure the quality of the product. While there are still many unknowns (number of doses, temperature sensitivities, manufacturing locations, etc.), it is clear that the scale of activity will be vast, that cold chain facilities will be required and that delivery to every corner of the planet will be needed. Priorities for preparing facilities for this distribution include:

  • Availability of temperature-controlled facilities and equipment – maximizing the use or re-purposing of existing infrastructure and minimizing temporary builds
  • Availability of staff trained to handle time- and temperature-sensitive vaccines
  • Robust monitoring capabilities to ensure the integrity of the vaccines is maintained

Security: Vaccines will be highly valuable commodities. Arrangements must be in place to keep ensure that shipments remain secure from tampering and theft. Processes are in place to keep cargo shipments secure, but the potential volume of vaccine shipments will need early planning to ensure that they are scalable.

Border ProcessesWorking effectively with health and customs authorities will, therefore, be essential to ensure timely regulatory approvals, adequate security measures, appropriate handling and customs clearance. This could be a particular challenge given that, as part of COVID-19 prevention measures, many governments have put in place measures that increase processing times. Priorities for border processes include:

  • Introducing fast-track procedures for overflight and landing permits for operations carrying the COVID-19 vaccine
  • Exempting flight crew members from quarantine requirements to ensure cargo supply chains are maintained
  • Supporting temporary traffic rights for operations carrying the COVID-19 vaccines where restrictions may apply
  • Removing operating hour curfews for flights carrying the vaccine to facilitate the most flexible global network operations
  • Granting priority on arrival of those vital shipments to prevent possible temperature excursions due to delays
  • Considering tariff relief to facilitate the movement of the vaccine

Capacity

On top of the transport preparations and coordination needed, governments must also consider the current diminished cargo capacity of the global air transport industry. IATA warned that, with the severe downturn in passenger traffic, airlines have downsized networks and put many aircraft into remote long-term storage. The global route network has been reduced dramatically from the pre-COVID 24,000 city pairs. The WHO, UNICEF and Gavi have already reported severe difficulties in maintaining their planned vaccine programs during the COVID-19 crisis due, in part, to limited air connectivity.

“The whole world is eagerly awaiting a safe COVID vaccine. It is incumbent on all of us to make sure that all countries have safe, fast and equitable access to the initial doses when they are available. As the lead agency for the procurement and supply of the COVID vaccine on behalf of the COVAX Facility, UNICEF will be leading what could possibly be the world’s largest and fastest operation ever. The role of airlines and international transport companies will be critical to this endeavour,” said Henrietta Fore, UNICEF Executive Director.

The potential size of the delivery is enormous. Just providing a single dose to 7.8 billion people would fill 8,000 747 cargo aircraft. Land transport will help, especially in developed economies with local manufacturing capacity. But vaccines cannot be delivered globally without the significant use air cargo.

“Even if we assume that half the needed vaccines can be transported by land, the air cargo industry will still face its largest single transport challenge ever. In planning their vaccine programs, particularly in the developing world, governments must take very careful consideration of the limited air cargo capacity that is available at the moment. If borders remain closed, travel curtailed, fleets grounded and employees furloughed, the capacity to deliver life-saving vaccines will be very much compromised,” said de Juniac.

IATA: Sluggish improvement in passenger demand continues in July

IATA issued this report:

The International Air Transport Association (IATA) announced that passenger demand in July (measured in revenue passenger kilometers or RPKs), continued at critically low levels–79.8% below July 2019 levels. This was somewhat better than the 86.6% year-over-year decline recorded in June, primarily driven by domestic markets, most notably Russia and China. Market reopening in the Schengen Area helped to boost international demand in Europe, but other international markets showed little change from June. Capacity was 70.1% below 2019 levels and load factor sagged to a record low for July, at 57.9%.

“The crisis in demand continued with little respite in July. With essentially four in five air travelers staying home, the industry remains largely paralyzed. Governments reopening and then closing borders or removing and then re-imposing quarantines does not give many consumers confidence to make travel plans, nor airlines to rebuild schedules,” said Alexandre de Juniac, IATA’s Director General and CEO.

JULY 2020 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market
100.0%
-79.8%
-70.1%
-27.7%
57.9%
Africa
2.1%
-93.7%
-84.3%
43.4%
29.6%
Asia Pacific
34.6%
-72.2%
-64.9%
-17.2%
65.7%
Europe
26.8%
-81.3%
-72.7%
28.1%
60.9%
Latin America
5.1%
-87.5%
-83.2%
-22.0%
63.1%
Middle East
9.1%
-92.5%
-84.7%
-41.7%
39.6%
North America
22.3%
-80.6%
-63.9%
-41.0%
47.6%

International Passenger Markets

July international passenger demand collapsed 91.9% compared to July 2019, a slight improvement over the 96.8% decline recorded in June. Capacity plummeted 85.2%, and load factor sank 38.9 percentage points to 46.4%.

 

European carriers’ July demand toppled 87.1% compared to last year, improved from a 96.7% drop in June, year-over-year, reflecting relaxation of travel restrictions in the Schengen Area. Capacity dropped 79.2% and load factor fell by 33.8 percentage points to 55.1%.

Asia-Pacific airlines’ July traffic dived 96.5% compared to the year-ago period, virtually unchanged from a 97.1% drop in June, and the steepest contraction among regions. Capacity fell 91.7% and load factor shrank 47.3 percentage points to 35.3%.

Middle Eastern airlines posted a 93.3% traffic decline for July, compared with a 96.1% demand drop in June. Capacity tumbled 85.6%, and load factor sank 43.4 percentage points to 38.0%.

North American carriers saw a 94.5% traffic decline in July, a slight uptick from a 97.1% decline in June. Capacity fell 86.1%, and load factor dropped 53.0 percentage points to 35.0%, second lowest among regions.

Latin American airlines experienced a 95.0% demand drop in July, compared to the same month last year, versus a 96.6% drop in June. Capacity fell 92.6% and load factor sank 27.1 percentage points to 58.4%, highest among the regions.

African airlines’ traffic dropped 94.6% in July, somewhat improved from a 97.8% contraction in June. Capacity contracted 84.6%, and load factor fell 47.1 percentage points to 25.4%, which was the lowest among regions.

Domestic Passenger Markets

 

Domestic traffic fell 57.5% in July. This was an improvement compared to a 68% decline in June. Domestic capacity fell 42.2% and load factor dropped 22.9 percentage points to 63.3%.

JULY 2020 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic
36.2%
-57.5%
-42.2%
-22.9%
63.3%
Dom. Australia
0.8%
-90.0%
-82.8%
-34.7%
48.5%
Dom. Brazil
1.1%
-77.7%
-74.9%
-9.5%
75.2%
Dom. China P.R.
9.8%
-28.4%
-18.3%
-10.5%
74.4%
Dom. Japan
1.1%
-65.2%
-44.0%
-27.2%
44.6%
Dom. Russian Fed.
1.5%
-17.7%
-0.8%
-15.7%
76.5%
Dom. US
14.0
-72.6%
-50.7%
39.7%
49.6%

China’s carriers’ traffic was down 28.4% compared to July 2019. Recovery had slowed modestly in June amid new virus outbreaks but resumed its pace from mid-July.

Russian airlines’ domestic traffic was down 17.7% in July, dramatically improved compared with 58% decline in June. Demand has been supported by low domestic fares and a boom in domestic tourism.