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Demand for air service witnessing recovery: IATA

IATA has confirmed that demand for air services is beginning to recover after hitting bottom in April. Passenger demand in April, measured in revenue passenger kilometers (RPKs), plunged 94.3 per cent when compared to April 2019, as the COVID19-related travel restrictions virtually shut down domestic and international air travel. That’s a rate of decline never seen in the history of IATA’s traffic series, which dates back to 1990.

More recently, figures show that daily flight totals rose 30 per cent between the low point on April 21 and May 27. This is primarily in domestic operations and off of a very low base (5.7 per cent of 2019 demand). While this uptick is not significant to the global dimension of the air transport industry, it does suggest that the industry has seen the bottom of the crisis, provided there is no recurrence. In addition, it is the very first signal of aviation beginning the likely long process of re-establishing connectivity.

Alexandre de Juniac, Director General and CEO, IATA said, “April was a disaster for aviation as air travel almost entirely stopped. But April may also represent the nadir of the crisis. Flight numbers are increasing. Countries are beginning to lift mobility restrictions. And business confidence is showing improvement in key markets such as China, Germany, and the US. These are positive signs as we start to rebuild the industry from a stand-still. The initial green shoots will take time—possibly years—to mature.”

IATA calculated that by the first week of April, governments in 75 per cent of the markets tracked by IATA completely banned entry, while an additional 19 per cent had limited travel restrictions or compulsory quarantine requirements for international arrivals.

The initial flight increases have been concentrated in domestic markets. Data from late-May show that flight levels in Republic of Korea, China and Vietnam have risen to a point now just 22-28 per cent lower than a year earlier.

Searches for air travel on Google were also up 25 per cent by the end of May compared to the April low, although that’s a rise from a very low base and still 60 per cent lower than at the start of the year.

International Passenger Markets

April international passenger demand collapsed 98.4 per cent compared to April 2019, a deterioration from the 58.1 per cent decline recorded in March. Capacity fell 95.1 per cent, and load factor plunged 55.3 percentage points to 27.5 per cent.

Asia-Pacific airlines’ April traffic plummeted 98 per cent compared to the year-ago period, worsened from a 70.2 per cent drop in March. Capacity fell 94.9 per cent and load factor shrank 49.9 percentage points to 31.3 per cent.

European carriers’ April demand toppled 99 per cent, a sharp decline from the 53.8 per cent decline in March. Capacity dropped 97 per cent and load factor shrank by 58 percentage points to 27.7 per cent.

Middle Eastern airlines posted a 97.3 per cent traffic contraction for April, compared with a 50.3 per cent demand drop in March. Capacity collapsed 92.3 per cent, and load factor crumbled to 27.9 per cent, down 52.9 per cent percentage points compared to the year ago period.

North American carriers had a 98.3 per cent traffic decline in April widened from a 54.7 per cent decline in March. Capacity fell 94.4 per cent, and load factor dropped 57.2 percentage points to 25.7 per cent.

Latin American airlines experienced a 98.3 per cent demand drop in April compared to the same month last year, from a 45.9 per cent drop in March. Capacity fell 97 per cent and load factor fell 34.5 percentage points to 48.1 per cent, highest among the regions.

African airlines’ traffic sank 98.7 per cent in April, nearly twice as bad as the 49.8 per cent demand drop in March. Capacity contracted 87.7 per cent, and load factor dived 65.3 percentage points to just 7.7 per cent of seats filled, lowest among regions.

Domestic Passenger Markets

Domestic traffic fell 86.9 per cent in April, with the steepest declines registered in Australia (-96.8 per cent), Brazil (-93.1 per cent) and the US (-95.7 per cent). This was a sharp deterioration compared to a 51 per cent decline in March. Domestic capacity fell 72.1 per cent and load factor dropped 44.3 percentage points to 39.5 per cent.

China’s carriers posted a 66.6 per cent year-on-year decline in traffic in April, little changed from a 68.7 per cent decline in March but an improvement from the 85 per cent decline in February.

Russian airlines’ domestic traffic fell 82.7 per cent in April compared to April 2019. The slower shrinkage compared to the other markets is attributable to the later timing of the outbreaks in the country.

de Juniac said, “For aviation, April was our cruelest month. Governments had to take drastic action to slow the pandemic. But that has come with the economic cost of a traumatic global recession. Airlines will be key to the economic recovery. It is vital that the aviation industry is ready with bio-safety measures that passengers and air transport workers have confidence in. That’s why the speedy implementation of International Civil Aviation Organization’s (ICAO) global guidelines for safely re-starting aviation is the top priority.”

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