Tag Archives: IATA

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.

IATA: Traffic recovery slower than expected

IATA estimates that global passenger traffic (revenue passenger kilometers or RPKs) will not return to pre-COVID-19 levels until 2024, a year later than previously projected.

Short haul travel will do better than long haul travel so passenger numbers will recover slightly faster than traffic measured in RPKs and should reach pre-COVID-19 levels in 2023. For 2020, however, global passenger numbers are expected to decline 55%.

June 2020 figures back up the prediction with RPKs down 86.5% on June 2019 and an all-time low load factor of 57.6%.

The delayed recovery is due to a number of factors, including renewed outbreaks of COVID-19 in a number of countries such as the United States. In total, around 40% of global air travel markets are affected. Stop-start quarantines are having much the same effect as lockdowns.

In addition, corporate travel budgets are expected to be constrained as companies continue to face financial pressures. Though historically GDP growth and air travel have been highly correlated, surveys suggest this link has weakened, particularly with regard to business travel, as video conferencing appears to have made significant inroads as a substitute for in-person meetings.

There is weak consumer confidence too due to rising unemployment, low income, and the perceived risk of catching COVID-19. Some 55% of respondents to IATA’s June passenger survey don’t plan to travel in 2020.

Scientific advances in fighting COVID-19, including the development of a successful vaccine, could allow a faster recovery. However, at present there appears to be more downside risk than upside to the baseline forecast.

Alexandre de Juniac, IATA’s Director General and CEO accepts that the upturn in traffic has so far been weak. “What improvement we have seen has been domestic flying,” he says. “International markets remain largely closed. Consumer confidence is depressed 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.”

As a result, IATA is calling for continued relief measures. A full Northern Winter season waiver on the 80-20 use-it-or-lose it slot rule, for example, would provide critical relief to airlines planning schedules amid unpredictable demand patterns.

“Airlines need to keep sharply focused on meeting demand and not meeting slot rules that were never meant to accommodate the sharp fluctuations of a crisis,” says de Juniac. “The earlier we know the slot rules the better, but we are still waiting for governments in key markets to confirm a waiver.”.

IATA urges governments to implement a layer of measures including the International Civil Aviation Organization’s (ICAO’s) global guidelines for restoring air connectivity contained in ICAO’s Takeoff: Guidance for Air Travel through the COVID-19 Public Health Crisis. IATA also sees potential for accurate, fast, scalable and affordable testing measures and comprehensive contact tracing to play a role in managing the risk of virus spread while re-connecting economies and re-starting travel and tourism.

“We need to learn to manage the risks of living with COVID-19 with targeted and predictable measures that will safely re-build traveler confidence and shattered economies,” said de Juniac.

Picture Credit | Shutterstock

IATA: European COVID-19 impacts continue to worsen as border restrictions remain

The International Air Transport Association (IATA) released an update to the impacts of the COVID-19 pandemic on air passenger numbers, employment and economies across Europe, and urged governments to coordinate to lift border restrictions and find alternatives to quarantine measures to avoid further economic damage.

Although the European market has seen an increase in the number of flights in recent months, supported by the reopening of borders between countries of the Schengen area and the non-Schengen EU states, flights are still more than 50% below the same period in 2019. Passenger numbers are currently forecast to fall by around 60% in 2020, which represents about 705 million passenger journeys. The near-term outlook for recovery in Europe remains highly uncertain with respect to the second wave of the pandemic and the broader global economic impact it could have. Passenger demand in Europe is expected to recover gradually and will not reach 2019 levels until 2024. 

With air travel not recovering as originally hoped, the negative impact on employment has increased. More than 7 million jobs supported by aviation (including tourism) in Europe are now at risk (up from around 6 million estimated in June). 

“It is desperately worrying to see a further decline in prospects for air travel this year, and the knock-on impact for employment and prosperity. It shows once again the terrible effect that is being felt by families across Europe as border restrictions and quarantine continue. It is vital that governments and industry work together to create a harmonized plan for reopening borders,” said Rafael Schvartzman, IATA’s Regional Vice President for Europe.

Analysis of the largest European markets shows a decline across all metrics since the previous IATA estimates in mid-June. (These are impact estimates for the full-year 2020.)

COUNTRY JUNE PAX ESTIMATES AUGUST PAX ESTIMATES JUNE JOBS AT RISK AUGUST JOBS AT RISK JUNE GDP AUGUST GDP
UK
-154 million
-165 million
-732,500
-780,000
-$55.7bn
-$59.3bn
Spain
-124.5 m
-132.7 m
-983,100
-1,049,500
-$64.7bn
-$69.1bn
Germany
-113.4 m
-117.6 m
-534,000
-550,800
-$37.6bn
-$38.8bn
Italy
-92 m
-98.2 m
-345,300
-369.100
-$23.5bn
-$25.2bn
France
-88.7 m
-94.6 m
-434,700
-466.100
-$38.9bn
-$41.5bn

See the full table of European countries (pdf)

IATA: COVID-19 impact deepens in the Middle East

The International Air Transport Association (IATA) released new data showing the impact on the Middle East aviation industry and on economies caused by the shutdown of air traffic due to the COVID-19 pandemic has deepened over recent weeks.

  • Job losses in aviation and related industries could grow to 1.5 million. That is more than half of the region’s 2.4 million aviation-related employment and 300,000 more than the previous estimate.
  • Full-year 2020 traffic is expected to plummet by 56% compared to 2019. Previous estimate was a fall of 51%.
  • GDP supported by aviation in the region could fall by up to $85 billion. Previous estimate was $66 billion.

Middle East economies have been brought to their knees by COVID-19. And without air connectivity being re-established, the socio-economic impact is getting worse. Businesses which contribute substantially to the region’s GDP and provide thousands of jobs are at risk without these vital connections. For the region’s economic recovery, it is imperative that the industry restart safely as soon as possible,” said Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East.

Restarting Aviation in the Middle East

 

To minimize the impact on jobs and the broader Middle East economy, an accelerated recovery of air transport across the region is paramount. This can be achieved through government action in two priority areas:

1. Harmonizing the restart of air transport across the region
Some countries in the Middle East are opening their borders to regional and international air travel but inconsistent application of biosafety measures along with unnecessary entry requirements are deterring passengers and suppressing the resumption of air travel. Harmonizing the restart of aviation across the region is critical for economic recovery. Governments need to implement the common global set of air transport biosecurity measures, contained in the International Civil Aviation Organization’s CART Take-off Guidelines.

2. Continued financial and regulatory support
In particular, direct financial aid such as wage subsidies and loans, an extension of the waiver to the 80-20 slot rule, and relief from taxes and charges.

“We are grateful to governments which have provided relief to aviation. However, the situation is not getting better, governments need to continue applying relief measures—financial and regulatory. A regional priority is securing support in the form of wage subsidies and loans as well as an extension of the waiver for the 80-20 use-it-or-lose-it slot rule. This is needed to provide critical relief to airlines in planning schedules amid unpredictable demand patterns. Saudi Arabia has confirmed a waiver for its slot coordinated airports and we hope the UAE, Morocco and Tunisia will do so soon. Airlines need to focus on meeting demand and not meeting slot rules that were never meant to accommodate the sharp fluctuations of such a crisis,” said Albakri.

Country level impact

The latest assessment from IATA Economics shows that the outlook at the national level has worsened for major aviation markets in the Middle East since June. For example, the passenger numbers, jobs at risk and GDP impacts for the five biggest Middle East markets all have declined:

 

COUNTRY JUNE PAX ESTIMATE
(MILLIONS)
AUGUST PAX ESTIMATE (MILLIONS) JUNE
JOBS AT RISK
AUGUST
JOBS AT RISK
APRIL GDP
(US$ BILLIONS)
AUGUST GDP
(US$ BILLIONS)
Egypt
-13.7
-14
297,200
298,300
-3.3
-3.5
Jordan
-3.8
-4
39,600
-0.8
-1.2
Morocco
-11.6
-12.3
534,200
569,100
-4.9
-5.6
Qatar
-5.0
-5.3
72,700
78,400
-2.8
-3.1
Saudi Arabia
-36.4
-39.2
299,200
322,500
-17.9
-20.1
United Arab Emirates
-32.3
-34.8
392,900
421,200
-23.2
-25.9

 

IATA: Impact of COVID-19 on African aviation and economies is worsening

The International Air Transport Association (IATA) released new data indicating that the impact of COVID-19 on Africa’s aviation industry and economies has worsened sharply since the previous assessment in April.

  • Job losses in aviation and related industries could increase by up to 3.5 million. That is more than half of the region’s 6.2 million aviation-related employment and 400,000 more than the previous estimate.
  • Full-year 2020 traffic is expected to plummet by 54% (more than 80 million passenger journeys) compared to 2019. Previous estimate was a fall of 51%.
  • GDP supported by aviation in the region could fall by up to $35 billion. IATA previously estimated a $28 billion decline.

“COVID-19 has devastated African economies and brought air connectivity across the continent to a virtual standstill. And the situation is getting worse. The economic consequences resulting from a disconnected continent are severe. Millions of jobs and livelihoods are at risk in family-run enterprises and large corporations along the entire travel and tourism value chain. For Africa’s economic recovery and future prosperity, it is essential to expedite the safe restart of the industry,” said Muhammad Al Bakri, IATA’s Regional Vice President for Africa and the Middle East.

Restarting African Aviation

 

To minimize the impact on jobs and the broader African economy an accelerated recovery of air transport across the continent is vital. This can be achieved through government action in two priority areas:

1. Harmonizing the restart of air transport in Africa

The harmonized adoption of the International Civil Aviation Organization (ICAO) Council’s Aviation Recovery Task Force (CART) Take-off guidance – the global biosafety framework for the safe restart of aviation – is critical for the safe resumption of air transport. To avoid conflicting measures, disruptions and inefficiencies, all countries, including those in Africa, must apply these recommendations consistently and uniformly, without imposing unnecessary border constraints such as quarantines, which deter passengers and suppress the demand for air travel.

According to ICAO, Rwanda is amongst the first countries in the world to have fully complied with ICAO’s biosecurity recommendations. Barry Kashambo, Regional Director, ESAF speaking on behalf of the ICAO Regional Offices accredited to African States ICAO said: “We recognize the efforts and actions by Rwanda and some other States, to fully implement the provisions of ICAO CART recommendations and Take-off guidance and measures. We encourage all Governments in Africa to prioritize the restart of aviation and to tap into its potential as an enabler to Africa’s economic recovery post COVID-19. Air connectivity is critical to economic and sustainable development and the movement of persons across the continent.”

2. Stepping up efforts to support the industry

Continued financial and regulatory support, particularly financial relief–that does not increase industry debt levels–through direct cash injections, credit or loans and deferrals or discounts on user charges are essential to support airlines over the restart and recovery period.

“We are grateful to the few African governments that have provided relief to aviation so far – Rwanda, Senegal, Côte d’Ivoire, Burkina Faso and recently Cabo Verde. Their actions have helped save thousands of jobs and will enable some airlines to restart and support the wider economies they serve. But the situation is worsening. Continued relief measures are essential to minimize job losses and ensure that connectivity can be restored. We urge African governments and the development institutions who have committed funding to provide it urgently in a structure that does not weaken already stressed airline balance sheets, before it is too late,” said Albakri.

Country level impact

IATA Economics’ latest outlook for key national markets in Africa has worsened since the previous assessment in June. For example, passenger numbers, jobs at risk and GDP impacts for the five biggest African markets have declined across every metric:

 

COUNTRY JUNE PAX ESTIMATE (MILLIONS) AUGUST PAX ESTIMATE (MILLIONS) JUNE JOBS AT RISK AUGUST JOBS AT RISK APRIL GDP
(US$ BILLIONS)
AUGUST GDP
(US$ BILLIONS)
South Africa
-15.6
-16.6
269,000
287,700
-5.1
-5.8
Nigeria
-5.3
-5.7
139,500
149,400
-0.9
-1.1
Kenya
-3.8
-4.0
207,800
223,600
-1.6
-1.8
Rwanda
-0.47
-0.5
17,300
18,500
-0.06
-0.07
Ethiopia
-2.6
-2.8
530,400
564,100
-1.9
-2.1

 

Airlines and airports issue stark warning to European Prime Ministers on inconsistent approach to travel restrictions

IATA issued this statement:

Europe’s airline and airport associations have written to Prime Ministers, Transport, Health and Home Affairs Ministers across the European Union, Schengen and the UK, setting out deep concerns over their failure to implement coherent and science-based approaches to travel restrictions.

The letter, sent jointly from Airports Council International Europe (ACI EUROPE), Airlines for Europe (A4E) and the International Air Transport Association (IATA), is highly critical of the introduction of new restrictions relating to selected countries. Many of these restrictions, state the organisations, are inconsistent with the principles laid out by the World Health Organization (WHO) and the European Centre for Disease Prevention and Control (ECDC).

The aviation sector has been dealt a crippling economic blow by the pandemic. Despite repeated calls for a science-based, harmonised and coordinated approach to new restrictions – differing national approaches have emerged. Some of these unilateral national measures are contrary to expert guidance and further damage consumer confidence. Moreover, the imposition of such restrictions fails to take into account other options governments have to protect their citizens, such as effective track-and-trace systems.

“The European Aviation sector is urging EU/Schengen States and the UK to reconsider restrictions to travel that have been imposed between them – including quarantines”, state the three associations in the letter. “We fail to see any valid science-based and proportionate justification for such restrictions from a health policy perspective”.

The aviation associations assert that renewed efforts must be urgently put into:

  • Effectively co-ordinating and aligning responses to the evolving epidemiological situation at EU level and in close co-operation with the UK, to be addressed urgently and jointly by home affairs, transport and health ministries and the European Commission;
  • Re-enforcing the principle of risk-based and proportionate measures – localising restrictions and NOT imposing blanket country bans, with quarantine used as a very last resport – following ECDC guidance;
  • Ensuring the interoperabiliy of contact tracing apps, as none of the existing apps are interoperable;
  • A harmonised implementation of the EASA/ECDC and ICAO Take-Off Aviation Health Safety Protocols;
  • Informing the public accordingly and in close cooperation with the travel and tourism industries.

IATA: Recovery delayed as international travel remains locked down

IATA has made this announcement:

The International Air Transport Association (IATA) released an updated global passenger forecast showing that the recovery in traffic has been slower than had been expected.

In the base case scenario:

  • Global passenger traffic (revenue passenger kilometers or RPKs) will not return to pre-COVID-19 levels until 2024, a year later than previously projected.
  • The recovery in short haul travel is still expected to happen faster than for long haul travel. As a result, passenger numbers will recover faster than traffic measured in RPKs. Recovery to pre-COVID-19 levels, however, will also slide by a year from 2022 to 2023. For 2020, global passenger numbers (enplanements) are expected to decline by 55% compared to 2019, worsened from the April forecast of 46%.

June 2020 passenger traffic foreshadowed the slower-than-expected recovery. Traffic, measures in RPK, fell 86.5% compared to the year-ago period. That is only slightly improved from a 91.0% 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%.

The more pessimistic recovery outlook is based on a number of recent trends:

  • Slow virus containment in the US and developing economies: Although developed economies outside of the US have been largely successful in containing the spread of the virus, renewed outbreaks have occurred in these economies, and in China. Furthermore there is little sign of virus containment in many important emerging economies, which in combination with the US, represent around 40% of global air travel markets. Their continued closure, particularly to international travel, is a significant drag on recovery.
  • Reduced corporate travel: Corporate travel budgets are expected to be very constrained as companies continue to be under financial pressure even as the economy improves. In addition, while historically GDP growth and air travel have been highly correlated, surveys suggest this link has weakened, particularly with regard to business travel, as video conferencing appears to have made significant inroads as a substitute for in-person meetings.
  • Weak consumer confidence: While pent-up demand exists for VFR (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. Some 55% of respondents to IATA’s June passenger survey don’t plan to travel in 2020.

Owing to these factors, IATA’s revised baseline forecast is for global enplanements to fall 55% in 2020 compared to 2019 (the April forecast was for a 46% decline). Passenger numbers are expected to rise 62% in 2021 off the depressed 2020 base, but still will be down almost 30% compared to 2019. A full recovery to 2019 levels is not expected until 2023, one year later than previously forecast.

Meanwhile, since domestic markets are opening ahead of international markets, and because passengers appear to prefer short haul travel in the current environment, RPKs will recover more slowly, with passenger traffic expected to return to 2019 levels in 2024, one year later than previously forecast. Scientific advances in fighting COVID-19 including development of a successful vaccine, could allow a faster recovery. However, at present there appears to be more downside risk than upside to the baseline forecast.

“Passenger traffic 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. Consumer confidence is depressed and not helped by the UK’s weekend decision to impose a blanket quarantine on all travelers returning from Spain. 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,” said Alexandre de Juniac, IATA’s Director General and CEO.

“For airlines, this is bad news that points to the need for governments to continue with relief measures—financial and otherwise. A full Northern Winter season waiver on the 80-20 use-it-or-lose it slot rule, for example, would provide critical relief to airlines in planning schedules amid unpredictable demand patterns. Airlines are planning their schedules. They need to keep sharply focused on meeting demand and not meeting slot rules that were never meant to accommodate the sharp fluctuations of a crisis. The earlier we know the slot rules the better, but we are still waiting for governments in key markets to confirm a waiver,” said de Juniac.

June 2020 Performance

 

JUNE 2020 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market
100.0%
-86.5%
-80.1%
-26.8%
57.6%
Africa
2.1%
-96.5%
-84.5%
-54.9%
16.2%
Asia Pacific
34.6%
-74.4%
-69.6%
-18.5%
63.8%
Europe
26.8%
-93.7%
-90.0%
-31.9%
55.5%
Latin America
5.1%
-91.2%
-89.0%
-16.7%
66.6%
Middle East
9.1%
-95.5%
-90.4%
-40.7%
35.7%
North America
22.3%
-86.3%
-76.9%
-36.5%
52.4%

1) % of industry RPKs in 2019     2) Year-on-year change in load factor     3) Load Factor Level

International Passenger Markets

June international traffic shrank by 96.8% compared to June 2019, only slightly improved over a 98.3% decline in May, year-over-year. Capacity fell 93.2% and load factor contracted 44.7 percentage points to 38.9%.

Asia-Pacific airlines’ June traffic plummeted 97.1% compared to the year-ago period, little improved from the 98.1% decline in May. Capacity fell 93.4% and load factor shrank 45.8 percentage points to 35.6%.

European carriers saw demand topple 96.7% in June versus a year ago, compared to a 98.7% decline in May. Capacity dropped 94.4% and load factor lessened 35.7 percentage points to 52.0%.

Middle Eastern airlines traffic collapsed 96.1% for June against June 2019, compared with a 97.7% demand drop in May. Capacity contracted 91.1%, and load factor crumbled to 33.3%, down 43.1% percentage points compared to a year ago. 

North American carriers had a 97.2% traffic decline in June, barely improved from a 98.3% decline in May. Capacity fell 92.8%, and load factor dropped 53.8 percentage points to 34.1%.

Latin American airlines suffered a 96.6% demand drop in June compared to the same month last year, from a 98.1% drop in May. Capacity fell 95.7% and load factor sagged 17.7 percentage points to 66.2%, which was the highest among the regions.

African airlines’ traffic sank 98.1% in June, little changed from a 98.6% demand drop in May. Capacity contracted 84.5%, and load factor dived 62.1 percentage points to just 8.9% of seats filled, lowest among regions.

Domestic Passenger Markets

Domestic traffic demand fell 67.6% in June, improved from a 78.4% decline in May. Capacity fell 55.9% and load factor dropped 22.8 percentage points to 62.9%.

JUNE 2020 (% YEAR-ON-YEAR) WORLD SHARE1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic
36.2%
-67.6%
-55.9%
-22.8%
62.9%
Australia
0.8%
-93.8%
-89.1%
-33.8%
44.4%
Brazil
1.1%
-84.7%
-83.3%
-7.1%
74.7%
China P.R.
9.8%
-35.5%
-21.3%
-15.2%
69.5%
Japan
1.1%
-74.9%
-63.4%
-22.4%
48.8%
Russian Fed.
1.5%
-58.0%
-36.4%
-28.9%
56.4%
US
14.0%
-80.1%
-67.4%
-34.9%
54.7%

1) % of industry RPKs in 2019     2) Year-on-year change in load factor     3) Load Factor Level

China’s carriers continued to lead the recovery, with traffic down 35.5% in June compared to the year-ago period, raised from a 46.3% decline in May.

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

The Bottom Line

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, that have the same effect as an outright lockdown. Summer — our industry’s busiest season — is passing by rapidly; with little chance for an upswing in international air travel unless governments move quickly and decisively to find alternatives to border closures, confidence-destroying stop-start re-openings and demand-killing quarantine,” said de Juniac.

IATA urges governments to implement a layer of measures including the International Civil Aviation Organization’s (ICAO’s) global guidelines for restoring air connectivity contained in ICAO’s Takeoff: Guidance for Air Travel through the COVID-19 Public Health Crisis. IATA also sees potential for accurate, fast, scalable and affordable testing measures and comprehensive contact tracing to play a role in managing the risk of virus spread while re-connecting economies and re-starting travel and tourism. “We need to learn to manage the risks of living with COVID-19 with targeted and predictable measures that will safely re-build traveler confidence and shattered economies,” said de Juniac.