The International Air Transport Association (IATA) announced passenger demand performance for June 2021 showed a very slight improvement in both international and domestic air travel markets. Demand remains significantly below pre-COVID-19 levels owing to international travel restrictions. As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons are to June 2019, which followed a normal demand pattern.
Total demand for air travel in June 2021 (measured in revenue passenger kilometres or RPKs) was down 60.1 percent compared to June 2019. That was a small improvement over the 62.9 percent decline recorded in May 2021 versus May 2019. International passenger demand in June was 80.9 percent below June 2019, an improvement from the 85.4 percent decline recorded in May 2021 versus two years ago. All regions, with the exception of Asia-Pacific, contributed to the slightly higher demand. Total domestic demand was down 22.4 percent versus pre-crisis levels (June 2019), a slight gain over the 23.7 percent decline recorded in May 2021 versus the 2019 period. The performance across key domestic markets was mixed with Russia reporting robust expansion while China returned to negative territory.
Download IATA June Passenger Market Analysis here.
Read a transcript of Willie Walsh’s 28 July comments here.
Download the IATA July airline/travel market presentation here.
“We are seeing movement in the right direction, particularly in some key domestic markets. But the situation for international travel is nowhere near where we need to be. June should be the start of peak season, but airlines were carrying just 20 percent of 2019 levels. That’s not a recovery, it’s a continuing crisis caused by government inaction,” said Willie Walsh, IATA’s director general.
“With each passing day the hope of seeing a significant revival in international traffic during the Northern Hemisphere summer grows fainter. Many governments are not following the data or the science to restore the basic freedom of movement. Despite growing numbers of vaccinated people and improved testing capacity we are very close to losing another peak summer season on the important trans-Atlantic market. And the UK’s flip-flop to reinstate quarantine for vaccinated arrivals from France is the kind of policy development that destroys consumer confidence when it is most needed,” said Walsh.
“A risk-managed re-connecting of the world is what we need. Vaccinated travellers should have their freedom of movement returned. An efficient testing regime can sufficiently manage risks for those unable to be vaccinated. This is the underlying message in the latest WHO travel guidance. Some governments are moving in this direction. The UK, Singapore and Canada have indicated timelines to open their borders without quarantine for vaccinated travellers. The European Commission has recommended that its member states adopt travel protocols that are closely aligned with the WHO—including testing for unvaccinated travellers. Similar moves to re-open borders in line with the WHO guidance by US—leaders in vaccinating their populations—would give critical impetus to demonstrating that we can live and travel while managing the risks of COVID-19,” said Walsh.
International Passenger Markets
- Asia-Pacific airlines’ June international traffic fell 94.6 percent compared to June 2019, unchanged from the 94.5 percent decline in May 2021 versus May 2019. The region had the steepest traffic declines for an eleventh consecutive month. Capacity dropped 86.7 percent and the load factor was down 48.3 percentage points to 33.1 percent, the lowest among regions.
- European carriers saw their June international traffic decline 77.4 percent versus June 2019, a gain from the 85.5 percent decrease in May compared to the same month in 2019. Capacity declined 67.3 percent and load factor fell 27.1 percentage points to 60.7 percent.
- Middle Eastern airlines posted a 79.4 percent demand drop in June compared to June 2019, improving from the 81.3 percent decrease in May, versus the same month in 2019. Capacity declined 65.3 percent and load factor deteriorated 31.1 percentage points to 45.3 percent.
- North American carriers’ June demand fell 69.6 percent compared to the 2019 period, improving from the 74.2 percent decline in May versus two years ago. Capacity sank 57.3 percent, and load factor dipped 25.3 percentage points to 62.6 percent.
- Latin American airlines saw a 69.4 percent drop in June traffic compared to the same month in 2019, improved over the 75.3 percent decline in May compared to May 2019. June capacity fell 64.6 percent and load factor dropped 11.3 percentage points to 72.7 percent, which was the highest load factor among the regions for the ninth consecutive month.
- African airlines’ traffic fell 68.2 percent in June versus the same month two years ago, an improvement from the 71.5 percent decline in May compared to May 2019. June capacity contracted 60.0 percent versus June 2019, and load factor declined 14.5 percentage points to 56.5 percent.
Domestic Passenger Markets
China’s domestic traffic returned to negative territory in June, declining 10.8 percent compared to June 2019, following a 6.3 percent growth in May versus the same period in 2019. New restrictions had been introduced following a COVID-19 outbreak in several Chinese cities. US domestic traffic improved from a 25.4 percent decline in May versus the same month in 2019, to a 14.9 percent decline in June. Life in the US was starting to see some normalcy following the easing of measures and the rapid rollout of the COVID-19 vaccination.
IATA’s data for global air cargo markets for June showed a 9.9 percent improvement on pre-COVID-19 performance (June 2019). This pushed first half-year air cargo growth to 8 percent, its strongest first half performance since 2017 (when the industry posted 10.2 percent year-on-year growth). As comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted, all comparisons to follow are to June 2019 which followed a normal demand pattern.
Global demand for June 2021, measured in cargo tonne-kilometres (CTKs), was up 9.9 percent compared to June 2019. Regional variations in performance are significant. North American carriers contributed 5.9 percentage points (ppts) to the 9.9 percent growth rate in June. Middle East carriers contributed 2.1 ppts, European airlines 1.6 ppts, African airlines 0.5 ppts and Asia-Pacific carriers 0.3 ppts. Latin American carriers did not support the growth, shaving 0.5 ppts off the total.
Download the IATA June Cargo Market Analysis here.
Overall capacity, measured in available cargo tonne-kilometres (ACTKs), remained constrained at 10.8 percent below pre-COVID-19 levels (June 2019) due to the ongoing grounding of passenger aircraft. Belly capacity was down 38.9 percent on June 2019 levels, partially offset by a 29.7 percent increase in dedicated freighter capacity. Underlying economic conditions and favourable supply chain dynamics remain highly supportive for air cargo:
- The US inventory to sales ratio is at a record low. This means that businesses have to quickly refill their stocks, and typically use air cargo to do so.
- The Purchasing Managers Indices (PMIs) – leading indicators of air cargo demand – show that business confidence, manufacturing output and new export orders are growing at a rapid pace in most economies. Concerns of a significant consumer shift from goods to services have not materialised.
- The cost-competitiveness and reliability of air cargo relative to that of container shipping has improved. The average price of air cargo relative to shipping has reduced considerably. And scheduling reliability of ocean carriers has dropped, in May it was around 40 percent compared to 70-80 percent prior to the crisis.
“Air cargo is doing brisk business as the global economy continues its recovery from the COVID-19 crisis. With first-half demand 8 percent above pre-crisis levels, air cargo is a revenue lifeline for many airlines as they struggle with border closures that continue to devastate the international passenger business. Importantly, the strong first-half performance looks set to continue,” said IATA’s Walsh.
June Regional Performance
- Asia-Pacific airlines saw demand for international air cargo increase by 3.8 percent in June 2021 compared to the same month in 2019. International capacity remained constrained in the region, down 19.8 percent versus June 2019. Even though demand remains high, the region faces moderate headwinds from the lack of international capacity and manufacturing PMIs that are not as strong as in Europe and the US.
- North American carriers posted a 23.4 percent increase in international demand in June 2021 compared to June 2019. Underlying economic conditions and favourable supply chain dynamics remain supportive for air cargo carriers in North America. International capacity decreased by 2.1 percent compared with June 2019.
- European carriers posted a 6.6 percent increase in international demand in June 2021 compared to the same month in 2019. International capacity decreased by 16.2 percent in June 2021 versus June 2019. Manufacturing PMIs are very strong in Europe indicating that market dynamics remain supportive for air cargo carriers in Europe.
- Middle Eastern carriers posted a 17.1 percent rise in international cargo volumes in June 2021 versus June 2019, boosted by strong performances on the Middle East to Asia and Middle East to North America trade routes. International capacity in June was down 9 percent compared to the same month in 2019.
- Latin American carriers reported a decline of 22.9 percent in international cargo volumes in June compared to the 2019 period. This was the worst performance of all regions and a weakening of performance compared to the previous month. International capacity decreased 28.4 percent in June 2021 compared to June 2019. This weak performance is mostly due to local airlines losing market share to carriers from other regions.
- African airlines’ international cargo demand in June increased 33.5 percent compared to the same month in 2019. This was the strongest performance of all regions, but notably on small volumes (African carriers carry 2 percent of global cargo). International capacity in June decreased by 4.9 percent compared to the same month in 2019.