The International Air Transport Association (IATA) announced that the recovery in passenger demand which had been slowing since the northern hemisphere’s summer travel season, came to a halt in November 2020, but said cargo demand was improving.
Total passenger demand (measured in revenue passenger kilometres or RPKs) was down 70.3 percent compared to November 2019, virtually unchanged from the 70.6 percent year-to-year decline recorded in October. November capacity was 58.6 percent below previous year levels and load factor fell 23.0 percentage points to 58.0 percent, which was a record low for the month.
Download the IATA passenger market analysis here.
International passenger demand in November was 88.3 percent below November 2019, slightly worse than the 87.6 percent year-to-year decline recorded in October. Capacity fell 77.4 percent below previous year levels, and load factor dropped 38.7 percentage points to 41.5 percent. Europe was the main driver of the weakness as new lockdowns weighed on travel demand. Recovery in domestic demand, which had been the relative bright spot, also stalled, with November domestic traffic down 41.0 percent compared to the prior year (it stood at 41.1 percent below the previous year’s level in October). Capacity was 27.1 percent down on 2019 levels and the load factor dropped 15.7 percentage points to 66.6 percent.
“The already tepid recovery in air travel demand came to a full stop in November. That’s because governments responded to new outbreaks with even more severe travel restrictions and quarantine measures. This is clearly inefficient. Such measures increase hardship for millions. Vaccines offer the long-term solution. In the meantime, testing is the best way that we see to stop the spread of the virus and start the economic recovery. How much more anguish do people need to go through—job losses, mental stress—before governments will understand that?” said Alexandre de Juniac, IATA’s outgoing director general and CEO.
International Passenger Markets
- Asia-Pacific airlines’ November traffic plunged 95.0 percent compared to the year-ago period, which was barely changed from the 95.3 percent decline in October. The region continued to suffer from the steepest traffic declines for a fifth consecutive month. Capacity dropped 87.4 percent and load factor sank 48.4 percentage points to 31.6 percent, the lowest among regions.
- European carriers saw an 87.0 percent decline in traffic in November versus a year ago, worsened from an 83 percent decline in October. Capacity withered 76.5 percent and load factor fell by 37.4 percentage points to 46.6 percent.
- Middle Eastern airlines’ demand plummeted 86.0 percent in November year-to-year, which was improved from an 86.9 percent demand drop in October. Capacity fell 71.0 percent, and load factor declined 37.9 percentage points to 35.3 percent.
- North American carriers had an 83.0 percent traffic drop in November, versus an 87.8 percent decline in October. Capacity dived 66.1 percent, and load factor dropped 40.5 percentage points to 40.8 percent.
- Latin American airlines experienced a 78.6 percent demand drop in November, compared to the same month last year, improved from an 86.1 percent decline in October year-to-year. This was the strongest improvement of any region. Routes to/from Central America were the most resilient as governments reduced travel restrictions—especially quarantine requirements. November capacity was 72.0 percent down and load factor dropped 19.5 percentage points to 62.7 percent, highest by far among the regions, for a second consecutive month.
- African airlines’ traffic sank 76.7 percent in November, little changed from a 77.2 percent drop in October, but the best performance among the regions. Capacity contracted 63.7 percent, and load factor fell 25.2 percentage points to 45.2 percent.
Domestic Passenger Markets
- Australia’s domestic traffic was down 79.8 percent in November compared to November a year ago, improved from an 84.4 percent decline in October, as certain states opened up. But it continued to significantly lag other domestic markets.
- India’s domestic traffic fell 49.6 percent in November, an improvement over a 55.6 percent decline in October, with more improvement expected as more businesses reopen.
Air Cargo demand improves in November
IATA said freight volumes improved compared to October, but remain depressed compared to 2019. Capacity remains constrained from the loss of available belly cargo space as passenger aircraft remain parked. Global demand, measured in cargo tonne-kilometres (CTKs), was 6.6 percent below previous-year levels in November (-7.7 percent for international operations). This was on par with the 6.2 percent year-on-year drop in October. The year-on-year decline is skewed as November 2019 had a boost in demand from the waning US-China trade war. Seasonally adjusted demand (SA CTKs) continued to improve, increasing 1.6 percent month-on-month in November. This was a slight improvement over the monthly growth rate of 1.1 percent in October. Current month-on-month gains indicate that SA CTKs will return to 2019 levels around March or April 2021.
Download the IATA cargo market analysis here.
Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 20 percent in November (‑21.3 percent for international operations) compared to the previous year. That is nearly three times larger than the contraction in demand. The capacity crunch is caused by a 53 percent decrease in in belly capacity. This has only been partially offset by a 20 percent increase in freighter capacity.
Strong regional variations continue with North American carriers reporting year-on-year gains in demand (+5 percent), while all other regions remained in negative territory compared to a year earlier. “Air cargo demand is still down 6.6 percent compared to the previous year, however we are seeing continuing month-on-month improvements. Severe capacity constraints persist as large parts of the passenger fleet remain grounded. This will put pressure on the industry as it gears up to deliver vital COVID-19 vaccines,” said de Juniac.
- Asia-Pacific airlines reported a decline in year-on-year international demand of 9.5 percent in November 2020 compared to the same month a year earlier. This was a 2.2 percent improvement from the 11.7 percent fall in October 2020. While international traffic within the region remains weak (down 19.6 percent year-on-year in November), exports on the Asia-North America and Asia-Europe routes are strong, driven by demand for e-commerce and PPE. International capacity remained constrained in the region, down 25.3 percent. However, this was an improvement over the 28.5 percent fall the previous month.
- North American carriers posted a 1 percent increase in international demand in November compared to the previous year—just the third month of growth in 12 months. This stronger performance compared to the rest of the industry was driven by a less stringent capacity crunch compared to other regions, with international capacity only down 12.7 percent in November. Strong traffic on the Asia-North America routes also contributed to the performance, reflecting rising e-commerce demand for products manufactured in Asia.
- European carriers reported a decrease in international demand of 13.7 percent in November compared to the previous year. This was a 2.7 percent decline in performance compared to October 2020. Air cargo in the region has been significantly affected by the resurgence of the COVID-19 virus and the impact of lockdowns on consumer demand and business activity. Lack of capacity remains a challenge, as international capacity decreased 24.9 percent in November.
- Middle Eastern carriers reported a decline of 2.2 percent in year-on-year international cargo volumes in November, a 1.1 percent deterioration from October. The lack of international connectivity is hampering air cargo recovery in the region, however seasonally adjusted demand remains on an upward trend. International capacity decreased by 18.6 percent.
- Latin American carriers reported a decline of 19.4 percent in international cargo volumes in November compared to the previous year. This was a drop from the 12.2 percent fall in October 2020. Air cargo in the region has been significantly affected by the resurgence of the COVID-19 virus and the impact of lockdowns on consumer demand and business activity. International capacity decreased 24.8 percent in November, an improvement from the 28.9 percent fall in October.
- African airlines saw international demand fall by 1.7 percent year-on-year in November, after three months of positive year-on-year growth. This is primarily driven by a soft performance on the Asia-Africa route, which was down 4.5 percent year-on-year. International capacity decreased by 19.4 percent.