IATA takes a more pessimistic outlook on 2020 and wider recovery as slow virus containment, reduced corporate demand and weak consumer confidence influence air travel behaviours
International Air Transport Association (IATA) has warned that the recovery in air traffic has been slower than had been expected and in its updated global passenger forecast it has revised its base case scenario which will now see global passenger traffic (measured in revenue passenger kilometres or RPKs) not returning to pre-Covid-19 levels until 2024, a year later than it had previously projected.
The recovery in short haul travel though is still expected to happen faster than for long haul travel. As a result, passenger numbers will recover faster than traffic measured in RPKs. Still, recovery to pre-Covid-19 levels, however, will also slide by a year from 2022 to 2023, projects IATA.
Latest data for Jun-2020 shows passenger traffic levels that foreshadowed the slower-than-expected recovery. RPKs fell -86.5% compared to the year-ago period. That is only slightly improved from a -91.0% contraction in May-2020 driven almost exclusively by rising demand in domestic markets, particularly China. The Jun-2020 load factor set an all-time low for the month at 57.6%.
“Passenger traffic hit bottom in Apr-2020, 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,” said Alexandre de Juniac, director general and CEO of IATA.
Scientific advances in fighting Covid-19 including development of a successful vaccine, could allow a faster recovery, but at present IATA says there appears to be “more downside risk than upside”. It is basing its more pessimistic recovery outlook on three key trends – slow virus containment in the US and developing economies, reduced corporate travel and weak consumer confidence. All of this points to a longer recovery period and more pain for the industry and the global economy,” says Mr de Juniac.
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