IATA: Recovery Slower Than Predicted

The International Air Transport Association’s latest forecast for global travel has slipped the “break even” point by a year, predicting that airline travel will not rise to meet pre-COVID-19 levels until 2024 and that the total falloff in 2020 will be deeper than originally expected. “The recovery in short haul travel is still expected to happen faster than for long haul travel,” the association says. “As a result, passenger numbers will recover faster than traffic measured in RPKs [revenue passenger kilometers]. 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%.” The association believes that 2020 will see a drop in total enplanements of 55 percent compared to 2019, which is up from 46 percent.

IATA says that slow containment and regional flare-ups of the coronavirus in the U.S., especially, is slowing the expected reemergence. In addition, it’s expected that lack of consumer confidence through the rest of the year will inhibit recreational flying at the same time businesses have adapted to more virtual meetings in lieu of short-notice (and profitable) business travel.

“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 U.K.’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.

IATA says that a bleak June helped inform its latest numbers. “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%.”