The world’s main trade group for the airline industry, the International Air Transport Association (IATA) said on its weekly media call on Wednesday (3 June), that international traffic in April hit “unprecedented lows” because of the COVID-19 pandemic with IATA’s Chief Economist Brian Peace saying the international “air industry (basically) stopped flying” and the new “all new record lows” were a stark difference from 2019’s record highs.
Pearce said the while passenger flights “essentially came to a halt” in April, freighters and converted pax aircraft were helping the cargo industry. He also said the Chinese domestic passenger market improved through April, although he said it was a “slow recovery. Load factors have risen to 66 percent in China,” Pearce said, but “what’s not clear is whether that load factor is above break-even for the Chinese airlines”.
Pearce also said that businesses were more confident, the Chinese manufacturing sector was more positive as were the same sectors in Germany, the US, and Japan, and that increase in business confidence might help aviation.
Pearce and IATA Director General Alexandre de Juniac both said airlines are trying to stimulate the market for domestic traffic and said airfares in China were down 40 percent as carriers tried to bring back travellers. They both also pointed to various “travel bubbles” or “bridges” like those between Australia and New Zealand, or within China or within and between ASEAN countries as signs the aviation industry is making a slow comeback.
Download IATA’s economic analysis here.
Download IATA’s passenger market analysis here.
Listen to IATA’s 3 June media call here.
“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,” said Alexandre de Juniac, IATA’s director general and CEO.
IATA calculated that by the first week of April, governments in 75 percent of the markets tracked by IATA completely banned entry, while an additional 19 percent 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 percent lower than a year earlier. Searches for air travel on Google also were up 25 percent by the end of May compared to the April low, although that’s a rise from a very low base and still 60 percent lower than at the start of the year.
International Passenger Markets
IATA said April international passenger demand collapsed 98.4 percent compared to April 2019, a deterioration from the 58.1 percent decline recorded in March. Capacity fell 95.1 percent, and load factor plunged 55.3 percentage points to 27.5 percent.
- Asia-Pacific airlines’ April traffic plummeted 98 percent compared to the year-ago period, worsened from a 70.2 percent drop in March. Capacity fell 94.9 percent and load factor shrank 49.9 percentage points to 31.3 percent.
- European carriers’ April demand toppled 99 percent, a sharp decline from the 53.8 percent decline in March. Capacity dropped 97 percent and load factor shrank by 58 percentage points to 27.7 percent.
- Middle Eastern airlines posted a 97.3 percent traffic contraction for April, compared with a 50.3 percent demand drop in March. Capacity collapsed 92.3 percent, and load factor crumbled to 27.9 percent, down 52.9 percentage points compared to the year ago period.
- North American carriers had a 98.3 percent traffic decline in April widened from a 54.7 percent decline in March. Capacity fell 94.4 percenet, and load factor dropped 57.2 percentage points to 25.7 percent.
- Latin American airlines experienced a 98.3 percent demand drop in April compared to the same month last year, from a 45.9 percent drop in March. Capacity fell 97 percent and load factor fell 34.5 percentage points to 48.1 percent, highest among the regions.
- African airlines’ traffic sank 98.7 percent in April, nearly twice as bad as the 49.8 percent demand drop in March. Capacity contracted 87.7 percent, and load factor dived 65.3 percentage points to just 7.7 percent of seats filled, lowest among regions.
IATA said domestic traffic fell 86.9 percent in April, with the steepest declines registered in Australia (-96.8 percent), Brazil (-93.1 percent) and the US (-95.7 percent). This was a sharp deterioration compared to a 51 percent decline in March. Domestic capacity fell 72.1 percent and load factor dropped 44.3 percentage points to 39.5 percent.
“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 Organisation’s (ICAO) global guidelines for safely re-starting aviation is the top priority,” said de Juniac. “People have not lost the desire to travel. They still want to see their family and friends. They still desire to explore the world. They will need to meet in person to do business globally.”
IATA said global aviation will also face headwinds like economic problems and a lack of confidence on the part of the flying public. “Governments have provided stimulus money to get the economy moving again,” de Juniac said. “And we are seeing business confidence improving. Individuals and companies that have survived without travel expenses for several months may re-assess their travel priorities. Against that we will surely see many promotions and incentives to encourage travel. We can be reasonably confident in overcoming this hurdle.”
De Juniac said the passenger confidence problem will be the bigger challenge. “Governments will need the confidence to re-open borders without imposing onerous quarantine measures. If governments impose quarantine measures, it is equal to keeping their borders closed and industry grounded. And individual travelers will need the confidence that travel itself poses no great risks than other activities and that they won’t face quarantine or disruption on arrival,” he said.
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