Tag Archives: IATA

IATA: Blocked airline funds could slow recovery

The International Air Transport Association (IATA) urged governments to abide by international agreements and treaty obligations to enable airlines to repatriate close to nearly $1 billion in blocked funds from the sale of tickets, cargo space, and other activities.

“Governments are preventing nearly $1 billion of airline revenues from being repatriated. This contravenes international conventions and could slow the recovery of travel and tourism in affected markets as the airline industry struggles to recover from the COVID-19 crisis. Airlines will not be able to provide reliable connectivity if they cannot rely on local revenues to support operations. That is why it is critical for all governments to prioritize ensuring that funds can be repatriated efficiently. Now is not the time to score an ‘own goal’ by putting vital air connectivity at risk,” said Willie Walsh, IATA’s Director General.

Approximately $963 million in airline funds are being blocked from repatriation in nearly 20 countries. Four countries: Bangladesh ($146.1 million), Lebanon ($175.5 million), Nigeria ($143.8 million), and Zimbabwe ($142.7 million), account for over 60% of this total, although there has been positive progress in reducing blocked funds in Bangladesh and Zimbabwe of late.

“We encourage governments to work with industry to resolve the issues that are preventing airlines from repatriating funds. This will enable aviation to provide the connectivity needed to sustain jobs and energize economies as they recover from COVID-19,” said Walsh.

IATA: Airline Industry Statistics confirm 2020 was the worse year on record

The International Air Transport Association (IATA) released the IATA World Air Transport Statistics (WATS) publication with performance figures for 2020 demonstrating the devastating effects on global air transport during that year of the COVID-19 crisis.

  • 1.8 billion passengers flew in 2020, a decrease of 60.2% compared to the 4.5 billion who flew in 2019
  • Industry-wide air travel demand (measured in revenue passenger-kilometers, or RPKs) dropped by 65.9% year-on-year
  • International passenger demand (RPKs) decreased by 75.6% compared to the year prior
  • Domestic air passenger demand (RPKs) dropped by 48.8% compared to 2019
  • Air connectivity declined by more than half in 2020 with the number of routes connecting airports falling dramatically at the outset of the crisis and was down more than 60% year-on-year in April 2020
  • Total industry passenger revenues fell by 69% to $189 billion in 2020, and net losses were $126.4 billion in total
  • The decline in air passengers transported in 2020 was the largest recorded since global RPKs started being tracked around 1950

“2020 was a year that we’d all like to forget. But analyzing the performance statistics for the year reveals an amazing story of perseverance. At the depth of the crisis in April 2020, 66% of the world’s commercial air transport fleet was grounded as governments closed borders or imposed strict quarantines. A million jobs disappeared. And industry losses for the year totaled $126 billion. Many governments recognized aviation’s critical contributions and provided financial lifelines and other forms of support. But it was the rapid actions by airlines and the commitment of our people that saw the airline industry through the most difficult year in its history,” said Willie Walsh, IATA’s Director General.


Key 2020 airline performance figures from WATS

Passenger

  • Systemwide, airlines carried 1.8 billion passengers on scheduled services, a decrease of 60.2% over 2019
  • On average, there was a $71.7 loss incurred per passenger in 2020, corresponding to net losses of $126.4 billion in total
  • Measured in ASKs (available seat kilometers), global airline capacity plummeted by 56.7%, with international capacity being hit the hardest with a reduction of 68.3%
  • Systemwide passenger load factor dropped to 65.1% in 2020, compared to 82.5% the year prior
  • The Middle East region suffered the largest proportion of loss for passenger traffic* with a drop of 71.5% in RPKs versus 2019, followed by Europe (-69.7%) and the Africa region (-68.5%)
  • China became the largest domestic market in 2020 for the first time on record, as air travel rebounded faster in their domestic market following their efforts to control COVID-19
  • The regional rankings (based on total passengers carried on scheduled services by airlines registered in that region) are:
  1. Asia-Pacific: 780.7 million passengers, a decrease of 53.4% compared to the region’s passengers in 2019
  2. North America: 401.7 million passengers, down 60.8% over 2019
  3. Europe: 389.9 million passengers, down 67.4% over 2019
  4. Latin America: 123.6 million passengers, down 60.6% over 2019
  5. Middle East: 8 million passengers, a decrease of 67.6% over 2019
  6. Africa: 34.3 million passengers, down 65.7% over 2019
  • The top five airlines ranked by total scheduled passenger kilometers flown, were:
  1. American Airlines (124 billion)
  2. China Southern Airlines (110.7 billion)
  3. Delta Air Lines (106.5 billion)
  4. United Airlines (100.2 billion)
  5. China Eastern Airlines (88.7 billion)
  • The top five route areas** by passenger demand (RPKs), with the largest drop being seen in routes within the Far East:
  1. Within Europe (290.3 million, down 70.7% from 2019)
  2. Europe – North America (122.9 million, decreased 80.4% from 2019)
  3. Within Far East (117.3 million, a decrease of 84.1% from 2019)
  4. Europe – Far East (115.3 million, a decrease of 79% from 2019)
  5. Middle East – Far East (104 million, down 73.6% from 2019)
  • The top five domestic passenger airport-pairs were all in Asia and outperformed top international routes as domestic recovery returned faster, particularly in China:
  1. Jeju – Seoul Gimpo (10.2 million, up 35.1% over 2019)
  2. Hanoi – Ho Chi Minh City (5.9 million, an increase of 54.3% from 2019)
  3. Shanghai-Hongqiao – Shenzhen (3.7 million, up 43.4% from 2019)
  4. Beijing-Capital – Shanghai-Hongqiao (3.6 million, increased by 11.8% from 2019)
  5. Guangzhou – Shanghai-Hongqiao (3.5 million, up 41.2% from 2019)
  • The top five nationalities*** traveling by air (international) were:
  1. United States (45.7 million, or 9.7% of all passengers)
  2. United Kingdom (40.8 million, or 8.6% of all passengers)
  3. Germany (30.8 million, or 6.5% of all passengers)
  4. France (23.3 million, or 4.9% of all passengers)
  5. India (17.4 million, or 3.7% of all passengers)

Cargo

  • Air freight was the bright spot in air transport for 2020, as the market adapted to keep goods moving—including vaccines, personal protective equipment (PPE) and vital medical supplies—despite the massive drop in capacity from the bellies of passenger aircraft.
  • Industry-wide available cargo tonne-kilometers (ACTKs) fell 21.4% year-on-year in 2020
  • This led to a capacity crunch, with the industry-wide cargo load factor up 7.0 percentage points to 53.8%. This is the highest value in the IATA series started in 1990.
  • At the end of the year, industry-wide cargo tonne-kilometers (CTKs) had returned close to pre-crisis values. However, the yearly decline in cargo demand (CTKs) was still the largest since the Global Financial Crisis in 2009, at a sizeable 9.7% year-on-year in 2020.
  • The top five airlines ranked by scheduled cargo tonne-kilometers (CTKs) flown were:
    1. Federal Express (19.7 billion)
    2. United Parcel Service (14.4 billion)
    3. Qatar Airways (13.7 billion)
    4. Emirates (9.6 billion)
    5. Cathay Pacific Airways (8.1 billion)

Airline Alliances

  • Star Alliance maintained its position as the largest airline alliance in 2020 with 18.7% of total scheduled traffic (in RPKs), followed by SkyTeam (16.3%) and oneworld (12.7%)

In other news, the International Air Transport Association (IATA) announced passenger demand performance for June 2021 showing a very slight improvement in both international and domestic air travel markets. Demand remains significantly below pre-COVID-19 levels owing to international travel restrictions.

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

  • Total demand for air travel in June 2021 (measured in revenue passenger kilometers or RPKs) was down 60.1% compared to June 2019. That was a small improvement over the 62.9% decline recorded in May 2021 versus May 2019.
  • International passenger demand in June was 80.9% below June 2019, an improvement from the 85.4% decline recorded in May 2021 versus two years ago. All regions with the exception of Asia-Pacific contributed to the slightly higher demand.
  • Total domestic demand was down 22.4% versus pre-crisis levels (June 2019), a slight gain over the 23.7% decline recorded in May 2021 versus the 2019 period. The performance across key domestic markets was mixed with Russia reporting robust expansion while China returned to negative territory.

“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20% of 2019 levels. That’s not a recovery, it’s a continuing crisis caused by government inaction,” said Willie Walsh, IATA’s Director General.

International Passenger Markets

JUNE 2021
(% VS JUNE 2019)
WORLD SHARE​1 RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Total Market
100.0%
-60.1%
-51.6%
-14.8%
69.6%
Africa
1.9%
-66.6%
-59.5%
-12.4%
58.7%
Asia Pacific
38.6%
-65.6%
-56.9%
-16.6%
65.7%
Europe
23.7%
-69.2%
-59.1%
-21.6%
65.8%
Latin America
5.7%
-50.2%
-47.1%
-4.8%
78.4%
Middle East
7.4%
-77.7%
-62.9%
-30.5%
45.9%
North America
22.7%
-36.2%
-29.6%
-8.3%
80.6%

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

Asia-Pacific airlines’ June international traffic fell 94.6% compared to June 2019, unchanged from the 94.5% decline in May 2021 versus May 2019. The region had the steepest traffic declines for an eleventh consecutive month. Capacity dropped 86.7% and the load factor was down 48.3 percentage points to 33.1%, the lowest among regions.

European carriers saw their June international traffic decline 77.4% versus June 2019, a gain from the 85.5% decrease in May compared to the same month in 2019. Capacity declined 67.3% and load factor fell 27.1 percentage points to 60.7%.

Middle Eastern airlines posted a 79.4% demand drop in June compared to June 2019, improving from the 81.3% decrease in May, versus the same month in 2019. Capacity declined 65.3% and load factor deteriorated 31.1 percentage points to 45.3%.

North American carriers’ June demand fell 69.6% compared to the 2019 period, improving from the 74.2% decline in May versus two years ago. Capacity sank 57.3%, and load factor dipped 25.3 percentage points to 62.6%.

Latin American airlines saw a 69.4% drop in June traffic compared to the same month in 2019, improved over the 75.3% decline in May compared to May 2019. June capacity fell 64.6% and load factor dropped 11.3 percentage points to 72.7%, which was the highest load factor among the regions for the ninth consecutive month.

African airlines’ traffic fell 68.2% in June versus the same month two years ago, an improvement from the 71.5% decline in May compared to May 2019. June capacity contracted 60.0% versus June 2019, and load factor declined 14.5 percentage points to 56.5%.

Domestic Passenger Markets

JUNE 2021
(%VS JUNE 2019)
WORLD SHARE1​​ RPK ASK PLF (%-PT)​2 PLF (LEVEL)​3
Domestic
54.3%
-22.4%
-15.5%
-6.9%
78.8%
Dom. Australia
0.7%
-40.7%
-28.5%
-13.3%
65.0%
Dom. Brazil
1.6%
-31.1%
-30.4%
-0.9%
80.9%
Dom. China P.R.
19.9%
-10.8%
-0.8%
-8.6%
76.2%
Dom India
2.1%
-70.8%
-59.1%
-25.8%
63.8%
Dom. Japan
1.5%
-67.6%
-45.1%
-29.2%
42.0%
Dom. Russian Fed.
3.4%
33.0%
39.4%
-4.0%
81.3%
Dom. US
16.6%
-14.9%
-11.2%
-3.8%
85.9%

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 returned to negative territory in June, declining 10.8% compared to June 2019, following a 6.3% growth in May versus the same period in 2019. New restrictions had been introduced following a COVID-19 outbreak in several Chinese cities.

US domestic traffic improved from a 25.4% decline in May versus the same month in 2019, to a 14.9% decline in June. Life in the US was starting to see some normalcy following the easing of measures and the rapid rollout of the COVID-19 vaccination.

The Bottom Line

“With each passing day the hope of seeing a significant revival in international traffic during the Northern Hemisphere summer grows fainter. Many governments are not following the data or the science to restore the basic freedom of movement. Despite growing numbers of vaccinated people and improved testing capacity we are very close to losing another peak summer season on the important trans-Atlantic market. And the UK’s flip-flop to reinstate quarantine for vaccinated arrivals from France is the kind of policy development that destroys consumer confidence when it is most needed,” said Walsh.

“A risk-managed re-connecting of the world is what we need. Vaccinated travelers should have their freedom of movement returned. An efficient testing regime can sufficiently manage risks for those unable to be vaccinated. This is the underlying message in the latest WHO travel guidance. The UK, Singapore and Canada have indicated timelines to open their borders without quarantine for vaccinated travelers. The European Commission has recommended that its member states adopt travel protocols that are closely aligned with the WHO—including testing for unvaccinated travelers. Similar moves to re-open borders in line with the WHO guidance by US—leaders in vaccinating their populations—would give critical impetus to demonstrating that we can live and travel while managing the risks of COVID-19,” said Walsh.

Video:

British Airways to trial the IATA Travel Pass

Airlines are now gravitating to the IATA Travel Pass for international travel.

British Airways has now joined this group with this announcement:

  • British Airways will initially trial IATA Travel Pass on flights from London to Zurich and Geneva
  • The airline’s parent company International Airlines Group, has been working with IATA, the association for the world’s airlines, to co-develop its Travel Pass app
  • The new travel pass is added to two other digital solutions being tested by the airline as it continues to seek out the best solutions for its customers to ensure frictionless travel
  • VeriFLY, an alternative app already being used by the airline, also continues to evolve as the airline works with testing suppliers to automatically upload results into the app and enable online check-in once documents are verified

British Airways will begin trialling digital travel solution, IATA Travel Pass, on flights from Heathrow to Geneva and Zurich in Switzerland from today, June 1.

The app can be downloaded onto a mobile device directly from the app store. Once downloaded, customers will create a secure account and will be presented with the entry requirements for their destination. British Airways’ customers can then book a Covid-19 test with an approved provider* and the results will be automatically uploaded into the app by the laboratory.

The app then checks that a customer meets the entry requirements for their destination and will then notify the customer to let them know that they are ready to travel. The airline’s parent company, International Airlines Group (IAG), has been working closely with IATA to co-develop the app that is now being successfully piloted by other global airlines, including British Airways’ sister airline Iberia.

Sean Doyle, British Airways’ Chairman and CEO, said “We are committed to exploring ways to ensure that the customer journey is as frictionless as possible and sharing our learnings to help the travel industry take off again.

“We know that digital travel passes are part of the solution and they will also play a key role in offering those traveling the reassurance they need before they arrive at the airport. We hope to be able to offer a customer-friendly digital option for every British Airways international route that requires proof of government mandated Covid status documentation.”

British Airways is also currently trialling digital travel app, VeriFLY, on routes to the US, France, Ireland, Barbados, Bahamas and Canada, as well as all inbound international flights. Once a customer has had their travel documentation certified through the app they will be able to check-in through either ba.com or the British Airways app and download their boarding pass before arriving at the airport.

The airline’s customers travelling to Cyprus, Germany, Greece, Italy, Spain and Portugal can now also upload their negative Covid-19 test result and other documentation directly into ba.com for verification before travel.

 

Aviation, travel and tourism sectors applaud EU Parliament vote on “EU COVID-19 Certificates”

IATA has made this announcement:

Setting Final Negotiations with European Commission and Council into Motion

  • Swift alignment by all three EU Institutions critical in restoring free movement for EU citizens by summer.
  • A clear, simple and harmonized European approach is desperately needed to reopen travel in a safe and responsible way.

Europe’s aviation, travel and tourism sectors fully welcome yesterday’s vote in the European Parliament on the EU’s proposed Digital Green Certificate Regulation, setting trilogue negotiations between the Parliament, the Council and the European Commission into motion. Swift action and alignment among the institutions is now critical in order to make the certificates operational by June and ensure reciprocity with non-EU systems. Common, interoperable, secure and GDPR-compliant health certificates represent an essential tool to facilitate the free movement of people within the EU and reopen travel in a safe and responsible way through the easing, and ultimately lifting of current travel restrictions.

The Parliament position brings forward important changes to the original proposal:

  • A new name, “EU COVID-19 Certificate” has been agreed to make it clearer to EU citizens and also limit the certificates’ use to during the pandemic.
  • Free and accessible testing: Testing is absolutely key in the fight against COVID-19, and the requirement to conduct pre-departure tests (often PCR) should not create an economic distortion between travelers. With tests ranging from €10 to €150, it is clear that such high costs could become a deterrent to travel – in particular among families.
  • Full equality among vaccinated and tested citizens: No additional measures such as quarantine or further testing should be imposed on travelers presenting a valid “EU COVID-19 Certificate”.

The proposed amendments send a strong political message from the Parliament on the urgency to restore free movement in the EU. This is not a privilege — it is a right as one of the pillars of the single market enshrined in the European treaties. Safely and swiftly re-establishing free movement is both possible and vitally important – not only for holidaymakers, but also for cross-border workers and citizens who will be able to visit their families more easily once the certificates are operational. Vaccination drives in Europe continue to gain momentum, with 26.5% of EU citizens having received at least one dose, compared with 16% four weeks ago.

According to a recent IATA survey, 72% of people want to travel to see family and friends as soon as possible. The sectors therefore urge swift negotiations and agreement by mid-May so that pilot testing and full implementation can take place in June. Time is of the essence, to offer EU citizens a much-needed breather after a year of lockdowns and travel restrictions which have negatively impacted consumers’ mental health and well-being. Multiple studies  show that travel has positive effects on mental and physical health thanks to human and nature connections, boosting people’s energy and relieving stress and anxiety.

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: 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.