The International Air Transport Association (IATA) announced full-year global passenger traffic results for 2020 showing that the COVID-19 pandemic cut demand (revenue passenger kilometres or RPKs) by 65.9 percent compared to the full year of 2019, by far the sharpest traffic decline in aviation history and the outlook was not good with forward bookings falling sharply since late December.
International passenger demand in 2020 was 75.6 percent below 2019 levels. Capacity, (measured in available seat kilometres or ASKs) declined 68.1 percent and load factor fell 19.2 percentage points to 62.8 percent. Domestic demand in 2020 was down 48.8 percent compared to 2019. Capacity contracted by 35.7 percent and load factor dropped 17 percentage points to 66.6 percent. December 2020 total traffic was 69.7 percent below the same month in 2019, little improved from the 70.4 percent contraction in November. Capacity was down 56.7 percent and load factor fell 24.6 percentage points to 57.5 percent.
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Bookings for future travel made in January 2021 were down 70 percent compared to a year-ago, putting further pressure on airline cash positions and potentially impacting the timing of the expected recovery. IATA’s baseline forecast for 2021 is for a 50.4 percent improvement on 2020 demand that would bring the industry to 50.6 percent of 2019 levels. While this view remains unchanged, there is a severe downside risk if more severe travel restrictions in response to new variants persist. Should such a scenario materialise, demand improvement could be limited to just 13 percent over 2020 levels, leaving the industry at 38 percent of 2019 levels.
“Last year was a catastrophe,” said Alexandre de Juniac, IATA’s outgoing director general and CEO. “There is no other way to describe it. What recovery there was over the Northern hemisphere summer season stalled in autumn and the situation turned dramatically worse over the year-end holiday season, as more severe travel restrictions were imposed in the face of new outbreaks and new strains of COVID-19.
“Optimism that the arrival and initial distribution of vaccines would lead to a prompt and orderly restoration in global air travel have been dashed in the face of new outbreaks and new mutations of the disease,” de Juniac said. “The world is more locked down today than at virtually any point in the past 12 months and passengers face a bewildering array of rapidly changing and globally uncoordinated travel restrictions. We urge governments to work with industry to develop the standards for vaccination, testing, and validation that will enable governments to have confidence that borders can reopen and international air travel can resume once the virus threat has been neutralised. The IATA Travel Pass will help this process, by providing passengers with an App to easily and securely manage their travel in line with any government requirements for COVID-19 testing or vaccine information. In the meantime, the airline industry will require continued financial support from governments in order to remain viable.”
International Passenger Markets
- Asia-Pacific airlines’ full-year traffic plunged 80.3 percent in 2020 compared to 2019, which was the deepest decline for any region. It fell 94.7 percent in the month of December amid stricter lockdowns, little changed from a 95 percent decline in November. Full year capacity was down 74.1 percent compared to 2019. Load factor fell 19.5 percentage points to 61.4 percent.
- European carriers saw a 73.7 percent traffic decline in 2020 versus 2019. Capacity fell 66.3 percent and load factor decreased 18.8 percentage points to 66.8 percent. For the month of December, traffic slid 82.3 percent compared to December 2019, an upturn over the 87 percent year-to-year decline in November reflecting pre-holiday momentum that was reversed toward the end of the month.
- Middle Eastern airlines’ annual passenger demand in 2020 was 72.9 percent below 2019. Annual capacity fell 63.9 percent and load factor plummeted 18.9 percentage points to 57.3 percent. December’s traffic was down 82.6 percent compared to December 2019, improved from an 86.1 percent drop in November.
- North American airlines’ full year traffic fell 75.4 percent compared to 2019. Capacity dropped 65.5 percent, and load factor sank 23.9 percentage points to 60.1 percent. December demand was down 79.6 percent compared to the same month a year-ago, a pick-up over an 82.8 percent drop in November reflecting a holiday surge.
- Latin American airlines had a 71.8 percent full year traffic decline compared to 2019, making it the best performing region after Africa. Capacity fell 67.7 percent and load factor dropped 10.4 percentage points to 72.4 percent, by far the highest among regions. Traffic fell 76.2 percent for the month of December compared to December 2019, somewhat improved from a 78.7 percent decline in November.
- African airlines’ traffic fell 69.8 percent last year compared to 2019, which was the best performance among regions. Capacity dropped 61.5 percent, and load factor sank 15.4 percentage points to 55.9 percent, lowest among regions. Demand for the month of December was 68.8 percent below the year-ago period, well ahead of a 75.8 percent decline in November. Carriers in the region have benefitted from somewhat less severe international travel restrictions compared to the rest of the world.
Domestic Passenger Markets
- China’s domestic passenger traffic fell 30.8 percent in 2020 compared to 2019. It was down 7.6 percent for the month of December versus December a year-ago period, which was a deterioration compared to a 6.3 percent decline in November amid new outbreaks and resulting restrictions.
- Russia’s domestic traffic fell 23.5 percent for the full year, but 12 percent for the month of December, much improved over a 23 percent decline in November. Full year results were supported by booming domestic tourism over the summer and falling fares.
Cargo Markets
IATA also said data for global air freight markets showing that demand for air cargo decreased by 10.6 percent in 2020, compared to 2019. This was the largest drop in year-on-year demand since IATA started to monitor cargo performance in 1990, outpacing the 6 percent fall in global trade in goods. Global demand in 2020, measured in cargo tonne-kilometres (CTKs), was 10.6 percent below 2019 levels (-11.8 percent for international operations). Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 23.3 percent in 2020 (‑24.1 percent for international operations) compared to 2019. This was more than double the contraction in demand.
Download the IATA Air Cargo Market Analysis here.
Due to the lack of available capacity, cargo load factors rose 7.7 percent in 2020. This contributed to increased yields and revenues, providing support to airlines and some long-haul passenger services in the face of collapsed passenger revenues. Improvements toward year-end were demonstrated in December when global demand was 0.5 percent below previous-year levels (-2.3 percent for international operations). Global capacity was 17.7 percent below previous-year levels (‑20.6 percent for international operations). That is much deeper than the contraction in demand, indicating the continuing and severe capacity crunch. With the stalling of the recovery in passenger markets, there is no end in sight for the capacity crunch.
“Air cargo is surviving the crisis in better shape than the passenger side of the business,” said IATA’s de Juniac. “For many airlines, 2020 saw air cargo become a vital source of revenues, despite weakened demand. But with much of the passenger fleet grounded, meeting demand without belly capacity continues to be an enormous challenge. And, as countries strengthen travel restrictions in the face of new coronavirus variants, it is difficult to see improvements in passenger demand or the capacity crunch. 2021 will be another tough year.”
2020 Regional Performance
Strong variations were evident in the regional performance of air cargo in 2020. North American and African carriers reported an annual gain in demand in 2020 (+1.1 percent and +1.0 percent, respectively), while all other regions remained in negative territory compared to 2019. International demand fell in all regions with the exception of Africa which posted a 1.9 percent increase in 2020 compared to the previous year.
- Asia-Pacific airlines reported a decline in demand of 15.2 percent in 2020 compared to 2019 (-13.2 percent for international operations) and a fall in capacity of 27.4 percent (-26.2 percent for international operations). In December airlines in the region posted a 3.9 percent decrease in international demand compared to the previous year. After a pause in recovery in Q3, demand is improving, driven by a rebound in manufacturing activity and export orders from China and South Korea. International capacity remained constrained in December, down 25.1 percent.
- North American carriers posted a 1.1 percent increase in demand in 2020 compared to 2019 (-5.2 percent for international operations) and a fall in capacity of 15.9 percent (-19.7 percent for international operations). In December carriers in the region posted an increase of 3.1 percent in international demand. This was the strongest monthly performance since late 2018. Strong traffic on the Asia-North America routes, which was up 2.1 percent in 2020, contributed to the performance, driven by strong demand from North American consumers for goods manufactured in Asia. Capacity remained constrained, down 14.1 percent in December.
- European carriers reported a 16.0 percent drop in demand in 2020 compared to 2019 (-16.2 percent for international operations) and a fall in capacity of 27.1 percent (-27.1 percent for international operations). In December airlines posted a decrease in international demand of 5.6 percent compared to the previous year. After a pause in recovery in November, seasonally adjusted demand grew 7 percent month-on-month in December, the largest rise of all regions. However, new lockdowns and adverse economic conditions in the region risk the recovery. Lack of capacity remains a challenge, as international capacity decreased 19.4 percent in December.
- Middle Eastern carriers reported a decline in demand of 9.5 percent in 2020 compared to 2019 (-9.5 percent for international operations) and a fall in capacity of 20.9 percent (-20.6 percent for international operations). After a slight slowdown in recovery in November, carriers in the region performed well in December, posting a 2.3 percent increase in international demand. International capacity decreased by 18.2 percent in December, unchanged from November.
- Latin American carriers reported a decline in demand of 21.3 percent in 2020 compared to 2019 (-20.3 percent for international operations) and a fall in capacity of 35 percent (-33.6 percent for international operations). In December international cargo volumes fell by 19.0 percent compared to the previous year. Air cargo recovery in the region has been affected by adverse economic conditions in markets such as Mexico, Argentina and Peru. Capacity remains highly constraint in the region. International capacity decreased in December by 36.7 percent, a steepening of the 30.4 percent fall in November.
- African airlines saw demand grow by 1.0 percent in 2020 compared to 2019 (1.9 percent for international operations) and a fall in capacity of 17.3 percent (-15.8 percent for international operations). African airlines posted the strongest international growth of all regions in 2020 as well as in December. International demand in the month grew by 6.3 percent year-on-year. African airlines now have the same share of the global international cargo market as carriers from Latin America (2.4 percent). International capacity decreased by 21.6 percent in December, a steepening of the 18.6 percent fall in November.