Category Archives: IATA

COVID-19 impact on Asia-Pacific aviation worsens

IATA has issued this report:

The latest estimates from the International Air Transport Association (IATA) indicate a worsening of the country impact from the COVID-19 crisis in the Asia Pacific region.

On April 14, 2020, IATA released updated analysis showing that the COVID-19 crisis will see global airline passenger revenues drop by US$314 billion in 2020, a 55% decline compared to 2019. Airlines in Asia Pacific will see the largest revenue drop of US$113 billion in 2020 compared to 2019 (-US$88 billion in 24 March estimate), and a 50% fall in passenger demand in 2020 compared to 2019 (-37% in 24 March estimate). These estimates are based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental.

“The situation is deteriorating.  Airlines are in survival mode. They face a liquidity crisis with a US$61 billion cash burn in the second quarter. We have seen the first airline casualty in the region. There will be more casualties if governments do not step in urgently to ensure airlines have sufficient cash flow to tide them over this period,” said Conrad Clifford, IATA’s Regional Vice President, Asia-Pacific. He identified India, Indonesia, Japan, Malaysia, the Philippines, Republic of Korea, Sri Lanka and Thailand as priority countries that need to take action. IATA is calling for a combination of:

  • direct financial support
  • loans, loan guarantees and support for the corporate bond market
  • tax relief

“Providing support for airlines has a broader economic implication. Jobs across many sectors will be impacted if airlines do not survive the COVID-19 crisis. Every airline job supports another 24 in the travel and tourism value chain. In Asia-Pacific, 11.2 million jobs are at risk, including those that are dependent on the aviation industry, such as travel and tourism,” said Clifford.

“Airlines continue to perform an important role currently with the transport of essential goods, including medical supplies, and the repatriation of thousands of people stranded around the world by travel restrictions. And after the COVID-19 pandemic is contained, governments will need airlines to support the economic recovery, connect manufacturing hubs and support tourism. That’s why they need to act now – and urgently – before it is too late,” said Clifford.

Details of the latest country impact are given below.

COUNTRY PERCENTAGE CHANGE IN PASSENGER DEMAND (2020 VS 2019) PASSENGER DEMAND IMPACT (ORIGIN-DESTINATION VOLUMES – 2020 VS 2019) REVENUE IMPACT (US$, MILLIONS – 2020 VS 2019) POTENTIAL JOBS IMPACT 
Australia
-51%
-50,510,000
-14,255
-362,100
Bangladesh
-48%
-5,541,000
-1,073
-61,900
Brunei Darussalam
-50%
-605,000
-114
-8,500
Cambodia
-45%
-5,390,000
-866
-770,000
Fiji
-51%
-1,158,000
-305
-65,100
India
-47%
-89,764,000
-11,221
-2,932,900
Indonesia
-49%
-59,756,000
-8,225
-2,069,000
Japan
-50%
-93,862,000
-22,625
-585,900
Laos
-51%
-1,618,000
-220
-23,800
Malaysia
51%
-33,513,000
-4,236
-220,500
Maldives
-51%
-2,747,000
-639
-37,200
Myanmar
-48%
-4,377,000
-691
-245,200
Nepal
-51%
-3,422,000
-522
-229,900
New Zealand
-50%
-12,865,000
-3,388
-170,100
Pakistan
-52%
-9,866,000
-1,829
-259,400
Philippines
-47%
-28,852,000
-4,481
-548,300
Republic of Korea
-52%
-59,219,000
-10,755
-371,200
Singapore
-48%
-23,897,000
-6,732
-169,000
Sri Lanka
-58%
-4,049,000
-715
-408,200
Thailand
-52%
-55,562,000
-8,289
-2,167,000
Vietnam
-45%
-31,902,000
-4,347
-989,500

For Europe, IATA issued this report:

The International Air Transport Association (IATA) released further evidence of the risk to jobs from the mounting financial crisis threatening European airlines, and called for urgent government action to preserve air services.

IATA’s analysis shows that the potential revenue loss by European carriers in 2020 has grown to $89 billion and passenger demand (measured in Revenue Passenger Kilometers) is projected to be 55% below 2019 levels. This is an increase over the previous estimates (released 24 March) of $76 billion and 46% respectively. Overall, we estimate that the present 90% collapse in air traffic puts around 6.7 million jobs at risk and could lead to a negative GDP impact of $452 billion across Europe. This equates to an additional 1.1 million jobs and $74 billion in GDP over the March estimates of 5.6 million jobs and $378 billion.

The increasing risk to jobs and GDP is due to a greater impact than previously expected from the air travel restrictions introduced as a result of the COVID-19 pandemic. IATA’s new analysis is based on a scenario of severe travel restrictions lasting for three months, with a gradual lifting of restrictions in domestic markets, followed by regional and intercontinental travel.

Some of the impacts at national level include:

  • United Kingdom: 140 million fewer passengers resulting in a $26.1bn revenue loss, risking almost 661,200 jobs and around $50.3bn in contribution to the UK economy.
  • Spain :114 million fewer passengers resulting in a $15.5bn revenue loss, risking 901,300 jobs and $59.4bn in contribution to Spain’s economy.
  • Germany: 103 million fewer passengers resulting in a $17.9bn revenue loss, risking 483,600 jobs and $34bn in contribution to Germany’s economy.
  • Italy: 83 million fewer passengers resulting in a $11.5bn revenue loss, risking 310,400 jobs and $21.1bn in contribution to Italy’s economy.
  • France: 80 million fewer passengers resulting in a $14.3bn revenue loss, risking 392,500 jobs and $35.2bn in contribution to France’s economy.

It is essential that governments move quickly to minimize this economic damage. Among the first priorities should be direct financial support, loans and tax relief to airlines. Regulatory relief is also crucial, especially a temporary amendment to EU261 to give greater flexibility on the terms of repayments for cancelled flights.

“Every job created in the aviation industry supports another 24 jobs in the wider economy. Unfortunately, that means that when aviation jobs disappear, the impact is magnified across the economy. Our latest impact assessment shows that the number of jobs at risk has increased to 6.7 million across Europe. As airlines face an unprecedented liquidity crisis, we desperately need European government financial and regulatory support,“ said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

Restarting air travel

 While airlines fight for survival, the industry is looking to plan for a restart of air connectivity once restrictions begin to be lifted. A number of requirements to ensure a successful restart have been identified:

  • Confidence-building measures will be needed to encourage a return to travel. This will mean governments providing economic stimulus, and coordinated measures to ensure that travel is safe
  • Governments should lean on the industry’s operational expertise to ensure efficient results
  • Global standards with mutual recognition will be essential for successful implementation
  • Any temporary measures introduced by governments should be exercised with a clear exit strategy.

“The world will rely on airlines and air connectivity to restore the global economy. A successful restart of the industry will be crucial. To help with that, IATA is hosting a series of regional summits to bring governments and key stakeholders together, to maximize the chances of an orderly restart. Harmonization and coordination of measures will be vital. And as always, we will be led by the science in terms of what can be implemented effectively,” said Schvartzman.

IATA: 25 million jobs at risk with airline shutdown

IATA has made this announcement:

The International Air Transport Association has released  new analysis showing that some 25 million jobs are at risk of disappearing with plummeting demand for air travel amid the COVID-19 crisis.

Globally, the livelihoods of some 65.5 million people are dependent on the aviation industry, including sectors such as travel and tourism. Among these are 2.7 million airlines jobs. In a scenario of severe travel restrictions lasting for three months, IATA research calculates that 25 million jobs in aviation and related sectors are endangered across the world:

  • 11.2 million jobs in Asia-Pacific
  • 5.6 million jobs in Europe
  • 2.9 million jobs in Latin America
  • 2.0 million jobs in North America
  • 2.0 million jobs in Africa
  • 0.9 million jobs in the Middle East

In the same scenario, airlines are expected to see full year passenger revenues fall by $252 billion (-44%) in 2020 compared to 2019. The second quarter is the most critical with demand falling 70% at its worst point, and airlines burning through $61 billion in cash.

Airlines are calling on governments to provide immediate financial aid to help airlines to remain viable businesses able to lead the recovery when the pandemic is contained. Specifically, IATA calls for:

  • Direct financial support
  • Loans, loan guarantees and support for the corporate bond market
  • Tax relief

“There are no words to adequately describe the devastating impact of COVID-19 on the airline industry. And the economic pain will be shared by 25 million people who work in jobs dependent upon airlines. Airlines must be viable businesses so that they can lead the recovery when the pandemic is contained. A lifeline to the airlines now is critical,” said Alexandre de Juniac, IATA’s Director General and CEO.

Looking Ahead: Re-booting the Industry

Alongside vital financial relief, the industry will also need careful planning and coordination to ensure that airlines are ready when the pandemic is contained.

 

“We have never shuttered the industry on this scale before. Consequently, we have no experience in starting it up. It will be complicated. At the practical level, we will need contingencies for licenses and certifications that have expired. We will have to adapt operations and processes to avoid reinfections via imported cases. And we must find a predictable and efficient approach to managing travel restrictions which need to be lifted before we can get back to work. These are just some of the major tasks that are ahead of us. And to be successful, industry and government must be aligned and working together,” said de Juniac.

IATA is scoping a comprehensive approach to re-booting the industry when governments and public health authorities allow. A multi-stakeholder approach will be essential. One initial step is a series of virtual meetings—or summits—on a regional basis, bringing together governments and industry stakeholders. The main objectives will be:

  • Understanding what is needed to re-open closed borders, and
  • Agreeing solutions that can be operationalized and scaled efficiently

“We are not expecting to re-start the same industry that we closed a few weeks ago. Airlines will still connect the world. And we will do that through a variety of business models. But the industry processes will need to adapt. We must get on with this work quickly. We don’t want to repeat the mistakes made after 9.11 when many new processes were imposed in an uncoordinated way. We ended up with a mess of measures that we are still sorting out today. The 25 million people whose jobs are at risk by this crisis will depend on an efficient re-start of the industry,” said de Juniac.

Summit dates are being confirmed in the expectation of a start before the end of April.

IATA: European airlines revenue losses mount – urgent government support required

The International Air Transport Association (IATA) strengthened its call for urgent action from European governments to provide financial relief to airlines. The latest IATA scenario for potential revenue loss by European carriers is US$76 bn and passenger demand (measured in Revenue Passenger Kilometers) is projected to be 46% below 2019 levels. A decline of this magnitude puts at risk about 5.6 million jobs and $378bn in GDP supported by air transport.

Some of the impacts at national level include:

United Kingdom
113.5mn fewer passengers resulting in a $21.7bn revenue loss, risking almost 402,000 jobs and around $32.7bn in contribution to the UK economy.

Spain
93.7mn fewer passengers resulting in a $13bn revenue loss, risking 750,000 jobs and $49.4bn in contribution to Spain’s economy.

Germany
84.4mn fewer passengers resulting in a $15bn revenue loss, risking 400,000 jobs and $28bn in contribution to Germany’s economy.

Italy
7mn fewer passengers resulting in a $9.5bn revenue loss, risking 256,000 jobs and $67.4bn in contribution to Italy’s economy.

 

France
65mn fewer passengers resulting in a $12bn revenue loss, risking 318,000 jobs and $28.5bn in contribution to France’s economy.

To minimize the sweeping damage across the European economy that these losses would have, it is vital that governments step up their efforts to aid the industry. Some European governments have already acted, including Norway, Sweden, Finland, Spain, and Italy. But more help is needed. IATA is calling for a combination of:

  • Direct financial support,
  • Loans, loan guarantees and support for the corporate bond market
  • Tax relief

“The air transport industry is an economic engine, supporting up to 12.2 million jobs across Europe and $823 billion in GDP. Every job created in the aviation industry supports another 24 jobs in the wider economy. Governments must recognize the vital importance of the air transport industry, and that support is urgently needed. First, this will keep airlines financially viable during the present lockdown, preserving jobs, maintaining essential connections to repatriate citizens, and carrying life-saving air cargo supplies. Secondly, this would avoid broad economic damage by ensuring that airlines can rapidly scale-up operations when travel restrictions are lifted, jump-starting the European and global economies,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

In addition to financial support, IATA called for regulators to provide relief measures. Key priorities in Europe include:

  • An urgent temporary amendment to the EU261 passenger rights regulation. Short-term flexibility is needed immediately. Permitting the use of vouchers instead of refunds, as has been allowed for some tour operators, would give airlines breathing space to repair cash flows.
  • Providing a package of measures to ensure air cargo operations, including fast track procedures to obtain overflight and landing permits, exempting flight crew members from 14-day quarantine, and removing economic impediments (overflight charges, parking fees, and slot restrictions).

“Some regulators are taking positive action. We are grateful to the European Council for insisting on a full-season waiver to the slot use rule. This will enable airlines and airports greater flexibility for this season and greater certainty for next summer. But there is more to do on the regulatory front. Amendments are urgently needed to give more flexibility for EU 261. And they must take measures to keep air cargo moving,” said Schvartzman.

NATION REVENUE IMPACT (US$, BILLIONS) PASSENGER DEMAND IMPACT (ORIGIN-DESTINATION VOLUMES, MILLIONS) POTENTIAL JOBS IMPACT POTENTIAL GDP IMPACT (US$, BILLIONS)
France
-12
-65
-318,000
-28.5
Germany
-15
-84.4
-400,000
-28
Greece
-3.2
-21.5
-193,000
-8.3
Ireland
-2
-15.2
-62,000
-8.9
Italy
-9.5
-67.7
-256,000
-17.4
Netherlands
-4.4
-23.4
-128,400
-10.5
Norway
-2.8
-20
-81,000
-8.7
Portugal
-3
-21.3
-141,000
-6
Russia
-7.1
-51.7
-330,000
-7.7
Spain
-13
-93.7
-750,000
-49.4
Sweden
-2.3
-17
-86,000
-8
Turkey
-5.5
-44.7
-427,000
-19
United Kingdom
-21.7
-113.5
-402,000
-32.7

 

IATA: Coronavirus could wipe out up to $113 billion in airline revenues this year

From IATA:

The International Air Transport Association (IATA) updated its analysis of the financial impact of the novel coronavirus (COVID-19) public health emergency on the global air transport industry. IATA now sees 2020 global revenue losses for the passenger business of between $63 billion (in a scenario where COVID-19 is contained in current markets with over 100 cases as of 2 March) and $113 billion (in a scenario with a broader spreading of COVID-19). No estimates are yet available for the impact on cargo operations.

IATA’s previous analysis (issued on 20 February 2020) put lost revenues at $29.3 billion based on a scenario that would see the impact of COVID-19 largely confined to markets associated with China. Since that time, the virus has spread to over 80 countries and forward bookings have been severely impacted on routes beyond China.

Financial markets have reacted strongly. Airline share prices have fallen nearly 25% since the outbreak began, some 21 percentage points greater than the decline that occurred at a similar point during the SARS crisis of 2003. To a large extent, this fall already prices in a shock to industry revenues much greater than our previous analysis.

To take into account the evolving situation with COVID-19, IATA estimated the potential impact on passenger revenues based on two possible scenarios:

Scenario 1: Limited Spread

This scenario includes markets with more than 100 confirmed COVID-19 cases (as of 2 March) experiencing a sharp downturn followed by a V-shaped recovery profile. It also estimates falls in consumer confidence in other markets (North America, Asia Pacific and Europe).

The markets accounted for in this scenario and their anticipated fall in passenger numbers, due to COVID-19, as are as follows: China (-23%), Japan (-12%), Singapore (-10%), South Korea (-14%), Italy (-24%), France (-10%), Germany (-10%), and Iran (-16%). Additionally, Asia (excluding China, Japan, Singapore and South Korea) would be expected to see an 11% fall in demand. Europe (excluding Italy, France and Germany) would see a 7% fall in demand and Middle East (excluding Iran) would see a 7% fall in demand.

Globally, this fall in demand translates to an 11% worldwide passenger revenue loss equal to $63 billion. China would account for some $22 billion of this total. Markets associated with Asia (including China) would account for $47 billion of this total.

Scenario 2: Extensive Spread

This scenario applies a similar methodology but to all markets that currently have 10 or more confirmed COVID-19 cases (as of 2 March). The outcome is a 19% loss in worldwide passenger revenues, which equates to $113 billion. Financially, that would be on a scale equivalent to what the industry experienced in the Global Financial Crisis.

MARKET IMPACT ON PASSENGER NUMBERS IMPACT ON PASSENGER REVENUES
Australia, China, Japan, Malaysia, Singapore, South Korea, Thailand, Vietnam
-23%
-$49.7 billion
Rest of Asia Pacific
-9%
-$7.6 billion
Austria, France, Italy, Germany, Netherlands, Norway, Spain, Switzerland, Sweden, the United Kingdom
-24%
-$37.3 billion
Rest of Europe
-9%
-$6.6 billion

Bahrain, Iraq, Iran, Kuwait, Lebanon, the

United Arab Emirates

-23%
-$4.9 billion
Rest of Middle East
-9%
-$2.3 billion
Canada and US
-10%
-$21.1 billion

Note: Revenue loss figures are not additive due to overlaps of some markets, e.g., revenues for China and Germany both contain the revenues for the China-Germany market. Revenues are base fare revenues for all airlines flying to, from and within the country.

Africa and Latin America/Caribbean regions are not explicitly included in this market-based analysis, because there are currently no countries in either region with at least 10 COVID-19 cases.

Mitigation

Oil prices have fallen significantly (-$13/barrel Brent) since the beginning of the year. This could cut costs up to $28 billion on the 2020 fuel bill (on top of those savings which would be achieved as a result of reduced operations) which would provide some relief but would not significantly cushion the devastating impact that COVID-19 is having on demand. And it should be noted that hedging practices will postpone this impact for many airlines.

Impact

“The turn of events as a result of COVID-19 is almost without precedent. In little over two months, the industry’s prospects in much of the world have taken a dramatic turn for the worse. It is unclear how the virus will develop, but whether we see the impact contained to a few markets and a $63 billion revenue loss, or a broader impact leading to a $113 billion loss of revenue, this is a crisis.

“Many airlines are cutting capacity and taking emergency measures to reduce costs. Governments must take note. Airlines are doing their best to stay afloat as they perform the vital task of linking the world’s economies. As governments look to stimulus measures, the airline industry will need consideration for relief on taxes, charges and slot allocation. These are extraordinary times,” said Alexandre de Juniac, IATA’s Director General and CEO.

Read the full updated impact assessment (pdf)

 

IATA: COVID-19 cuts demand and revenues – Asia carriers could lose $27.8 billion

The International Air Transport Association (IATA) announced that its initial assessment of the impact of the Novel Coronavirus 2019 outbreak (COVID-19) shows a potential 13% full-year loss of passenger demand for carriers in the Asia-Pacific region. Considering that growth for the region’s airlines was forecast to be 4.8%, the net impact will be an 8.2% full-year contraction compared to 2019 demand levels.

In this scenario, that would translate into a $27.8 billion revenue loss in 2020 for carriers in the Asia-Pacific region—the bulk of which would be borne by carriers registered in China, with $12.8 billion lost in the China domestic market alone.

In the same scenario, carriers outside Asia-Pacific are forecast to bear a revenue loss of $1.5 billion, assuming the loss of demand is limited to markets linked to China. This would bring total global lost revenue to $29.3 billion (5% lower passenger revenues compared to what IATA forecast in December) and represent a 4.7% hit to global demand. In December, IATA forecast global RPK growth of 4.1%, so this loss would more than eliminate expected growth this year, resulting in a 0.6% global contraction in passenger demand for 2020.

These estimates are based on a scenario where COVID-19 has a similar V-shaped impact on demand as was experienced during SARS. That was characterized by a six-month period with a sharp decline followed by an equally quick recovery. In 2003, SARS was responsible for the 5.1% fall in the RPKs carried by Asia-Pacific airlines.

The estimated impact of the COVID-19 outbreak also assumes that the center of the public health emergency remains in China. If it spreads more widely to Asia-Pacific markets then impacts on airlines from other regions would be larger.

It is premature to estimate what this revenue loss will mean for global profitability. We don’t yet know exactly how the outbreak will develop and whether it will follow the same profile as SARS or not. Governments will use fiscal and monetary policy to try to offset the adverse economic impacts. Some relief may be seen in lower fuel prices for some airlines, depending on how fuel costs have been hedged.

“These are challenging times for the global air transport industry. Stopping the spread of the virus is the top priority. Airlines are following the guidance of the World Health Organization (WHO) and other public health authorities to keep passengers safe, the world connected, and the virus contained. The sharp downturn in demand as a result of COVID-19 will have a financial impact on airlines—severe for those particularly exposed to the China market. We estimate that global traffic will be reduced by 4.7% by the virus, which could more than offset the growth we previously forecast and cause the first overall decline in demand since the Global Financial Crisis of 2008-09. And that scenario would translate into lost passenger revenues of $29.3 billion. Airlines are making difficult decisions to cut capacity and in some cases routes. Lower fuel costs will help offset some of the lost revenue. This will be a very tough year for airlines,” said Alexandre de Juniac, IATA’s Director General and CEO.

Role of Governments

Governments have an important role to play in this crisis:

  • Operations: Airlines have developed standards and best practices linked to the International Health Regulations (IHR) to manage effectively and efficiently in times of public health emergencies. Airlines, therefore, depend on governments to also follow the IHR so we have an effective global approach to containing the outbreak. “We have learned a lot from previous outbreaks. And that is reflected in the IHR. Governments need to follow it consistently,” said de Juniac.
  • Leadership: It is also important for governments to take leadership in shoring up their economies. The Singapore government, for example, is allocating SGD 112 million to provide financial relief to airlines and the aviation sector struggling to economically maintain connectivity. “Airlines and governments are in this together. We have a public health emergency, and we must try everything to keep it from becoming an economic crisis. Relief on airport costs will help maintain vital air connectivity. Other governments should take good note and act quickly,” said de Juniac.

Advice to Travelers

The WHO has not called for restrictions on travel or trade. Indeed, air transport plays a major role—bringing medical staff and supplies to where they are needed.

WHO has published extensive advice to travelers on its website. Passengers should be reassured that cabin air is filtered, that aircraft are cleaned in line with global standards, that key airports have implemented temperature screening for travelers and that airline staff and crew are trained to deal with the rare case of a passenger presenting with symptoms of infection.

“If you are sick, don’t travel. If you have flu-like symptoms, wear a mask and see a doctor. And when you travel wash your hands frequently and don’t touch your face. Observing these simple measures should keep flying safe for all,” said Dr. David Powell, IATA’s Medical Advisor.

IATA: 2019 worst year for air freight demand since 2009

The International Air Transport Association (IATA) released full-year 2019 data for global air freight markets showing that demand, measured in freight tonne kilometers (FTKs), fell by 3.3% compared to 2018 while capacity (AFTK) rose by 2.1%. This was the first year of declining freight volumes since 2012, and the weakest performance since the global financial crisis in 2009 (when air freight markets contracted by 9.7%).

In the month of December, cargo volumes contracted 2.7% year-on-year while capacity rose 2.8%.

Air cargo’s performance in 2019 was dampened by weak growth in global trade of just 0.9%. The sector’s underperformance was also due in particular to slowing GDP growth in manufacturing-intensive economies. Softer business and consumer confidence, along with falling export orders, also contributed to air freight struggles.

There are signs that confidence and orders could pick up in 2020. It is too early to say what long-term effects will be seen from the impact of restrictions associated with combatting the coronavirus outbreak.

“Trade tensions are at the root of the worst year for air cargo since the end of the Global Financial Crisis in 2009. While these are easing, there is little relief in that good news as we are in unknown territory with respect to the eventual impact of the coronavirus on the global economy. With all the restrictions being put in place, it will certainly be a drag on economic growth. And, for sure, 2020 will be another challenging year for the air cargo business,” said Alexandre de Juniac, IATA’s Director General and CEO.

Regional performance

All markets except Africa suffered volume declines in 2019. Asia-Pacific retained the largest share of FTKs, at 34.6%. The share of freight traffic increased modestly for both North America and Europe, to 24.2% and 23.7%, respectively. Middle East carriers’ traffic share held steady at 13%. Africa and Latin America saw their shares lift marginally, to 1.8% and 2.8%.

 DECEMBER 2019 (% YEAR-ON-YEAR) WORLD SHARE1 FTK AFTK FLF (%-PT)​2 FLF (LEVEL)​3
Total Market
100.0%
-2.7%
2.8%
-2.7%
46.7%
Africa
1.8%
10.3%
10.0%
0.1%
36.8%
Asia Pacific
34.6%
-3.5%
2.8%
-3.4%
51.9%
Europe
23.7%
-1.1%
4.9%
-3.2%
53.0%
Latin America
2.8%
-5.3%
-3.1%
-0.7%
30.0%
Middle East
13.0%
-3.4%
1.9%
-2.6%
47.0%
North America
24.2%
-3.4%
2.1%
-2.2%
39.5%

1- % of industry FTKs in 2019 2- Year-on-year change in load factor 3-Load factor level

Asia-Pacific carriers in December posted a decrease in demand of 3.5% compared to the same period a year earlier. Capacity increased by 2.8%. The full-year 2019 saw volumes decline 5.7%, the largest decrease of any region, while capacity increased by 1.1%. As the world’s main manufacturing region, international trade tensions and the global growth slowdown weighed heavily on regional air freight volumes in 2019.  Within-Asia FTKs were particularly affected (down 8% compared to a year ago).

North American airlines saw volumes fall by 3.4% in December, while capacity grew by 2.1%. For 2019 in total, the region’s cargo volumes declined by 1.5%, compared to a capacity increase of 1.6%. Trade tensions and cooling US economic activity in the latter part of the year have been factors in the decline. The 5.6% fall in international year-on-year volumes in December was the weakest monthly growth outcome for the region since early 2016.

European airlines experienced a 1.1% year-on-year decrease in freight demand in December, with a capacity rise of 4.9%. The fall in December was typical of the performance for 2019 as a whole, where volumes fell 1.8%, but capacity increased by 3.4%. Softer activity, including in the manufacturing-intensive German economy, combined with ongoing Brexit uncertainty, contributed to the 2019 result, which in international freight volume terms was the weakest since 2012.

Middle Eastern carriers’ freight volumes decreased 3.4% year-on-year in December and capacity increased by just 1.9%, the lowest of any region. This contributed to an annual result of a decline in demand of 4.8% in 2019 – the second greatest decline in growth rate of all the regions. Annual capacity increased just 0.7%. Disruption to global supply chains and weak global trade, together with airline restructuring in the region, were the chief drivers of the weaker freight outcome.

Latin American airlines suffered the sharpest fall in demand of any region in December, of 5.3%. The region was also the only one to see a reduction in capacity (-3.1%). Although the region was the second strongest performer across 2019 as a whole, limiting its decline in volumes to just 0.4%, social unrest and economic difficulties in several key countries led to the weakest international FTK outcome since 2015. Annual capacity increased 4.7%.

African carriers’ saw freight demand increase by 10.3% in December 2019, compared to the same month in 2018. This was reflected in the strong 2019 full-year performance, which saw Africa freight volumes expand 7.4%. Capacity in December grew by 10% and for 2019 in total, increased by 13.3%. Over the year, air cargo volumes have been supported by strong capacity growth and investment linkages with Asia.

Read the Air Freight Market Anlysis report for December 2019 (pdf)

IATA makes a statement about Malaysia Airlines flight MH 17

IATA logo

The International Air Transport Association (IATA), representing the international airlines, has made the following statement of the shoot-down of Malaysia Airlines:

Statement of IATA’s Director General and CEO Tony Tyler:

“The tragedy of MH 17 is an outrage. Over the weekend it was confirmed that the passengers and crew aboard the aircraft were the victims of a hideous crime. It was also an attack against the air transport system which is an instrument of peace.

Among the immediate priorities, the bodies of the victims must be returned to their grieving loved ones in a respectful manner. For over four days we witnessed appalling sights from the crash scene. Governments must set aside their differences and treat the victims and their families with the dignity they deserve – and this includes urgently securing the site.

The investigation must also start quickly and with total freedom and access. Actions over the weekend which slowed down progress on both of these priorities were an outrage to human decency.

We have heard news of potential progress on both these issues. But promises now need to be turned into reality with actions.

Airlines and governments are partners in supporting global connectivity. Airlines carry the passengers and cargo. Governments and air navigation service providers inform airlines about the routes that they can fly and with what restrictions. Airlines comply with that guidance.

That was the case with MH 17. Malaysia Airlines was a clearly identified commercial jet. And it was shot down—in complete violation of international laws, standards and conventions—while broadcasting its identity and presence on an open and busy air corridor at an altitude that was deemed to be safe.

No effort should be spared in ensuing that this outrage is not repeated. Of course, nobody should be shooting missiles at civilian aircraft—governments or separatists. Governments will need to take the lead in reviewing how airspace risk assessments are made. And the industry will do all that it can to support governments, through ICAO, in the difficult work that lies ahead.

This was a terrible crime. But flying remains safe. And everyone involved in global air transport is fully dedicated to making it even safer.”