The International Air Transport Association (IATA) said Tuesday (2 March) that global passenger traffic fell in January 2021, both compared to pre-COVID levels (January 2019) and compared to the immediate month prior (December 2020). The association said however that air cargo demand had recovered to pre-COVID-19 levels but capacity constrains from the lack of belly hold cargo presented challenges.
Because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted all comparisons are to January 2019 which followed a normal demand pattern. Total demand in January 2021 (measured in revenue passenger kilometres or RPKs) was down 72 percent compared to January 2019. That was worse than the 69.7 percent year-over-year decline recorded in December 2020. Total domestic demand was down 47.4 percent versus pre-crisis (January 2019) levels. In December it was down 42.9 percent on the previous year. This weakening is largely driven by stricter domestic travel controls in China over the Lunar New Year holiday period. International passenger demand in January was 85.6 percent below January 2019, a further drop compared to the 85.3 percent year-to-year decline recorded in December.
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The year “2021 is starting off worse than 2020 ended and that is saying a lot,” said Alexandre de Juniac, IATA’s outgoing director general and CEO. “Even as vaccination programmes gather pace, new COVID variants are leading governments to increase travel restrictions. The uncertainty around how long these restrictions will last also has an impact on future travel. Forward bookings in February this year for the Northern Hemisphere summer travel season were 78 percent below levels in February 2019.
“To say that 2021 has not gotten off to a good start is an understatement. Financial prospects for the year are worsening as governments tighten travel restrictions. We now expect the industry to burn through US$75-$95 billion in cash this year, rather than turning cash positive in the fourth quarter, as previously thought,” de Juniac added. “This is not something that the industry will be able to endure without additional relief measures from governments. Increased testing capability and vaccine distribution are the keys for governments to unlock economic activity, including travel. It is critical that governments build and share their restart plans along with the benchmarks that will guide them. This will enable the industry to be prepared to energize the recovery without any unnecessary delay,” said de Juniac.
Global standards to securely record test and vaccination data in formats that will be internationally recognised are urgently needed. “These will be critical to restarting international travel if governments continue to require verified testing or vaccination data. IATA will soon launch the IATA Travel Pass to help travelers and governments manage digital health credentials. But the full benefit of IATA Travel Pass cannot be realised until governments agree the standards for the information they want,” said de Juniac.
International Passenger Markets
- Asia-Pacific airlines’ January traffic plummeted 94.6 percent compared to the 2019 period, virtually unchanged from the 94.4 percent decline registered for December 2020 compared to a year ago. The region continued to suffer from the steepest traffic declines for a seventh consecutive month. Capacity dropped 86.5 percent and load factor sank 49.4 percentage points to 32.6 percent, by far the lowest among regions.
- European carriers had an 83.2 percent decline in traffic in January versus January 2019, worsened from an 82.6 percent decline in December compared to the same month in 2019. Capacity sank 73.6 percent and load factor fell by 29.2 percentage points to 51.4 percent.
- Middle Eastern airlines saw demand plunge 82.3 percent in January compared to January 2019, which was broadly unchanged from an 82.6 percent demand drop in December versus a year ago. Capacity fell 67.6 percent, and load factor declined 33.9 percentage points to 40.8 percent.
- North American carriers’ January traffic fell 79.0 percent compared to the 2019 period, up slightly from a 79.5 percent decline in December year to year. Capacity sagged 60.5 percent, and load factor dropped 37.8 percentage points to 42.9 percent.
- Latin American airlines experienced a 78.5 percent demand drop in January, compared to the same month in 2019, worsened from a 76.2 percent decline in December year-to-year. January capacity was 67.9 percent down compared to January 2019 and load factor dropped 27.2 percentage points to 55.3 percent, highest among the regions for a fourth consecutive month.
- African airlines’ traffic dropped 66.1 percent in January, which was a modest improvement compared to a 68.8 percent decline recorded in December versus a year ago. January capacity contracted 54.2 percent versus January 2019, and load factor fell 18.4 percentage points to 52.3 percent.
Domestic Passenger Markets
- China’s domestic traffic was down 33.9 percent in January compared to January 2019, dramatically worsened compared to the 8.5 percent year-over-year decline in December. The fall was owing to stricter traffic controls ahead of the Lunar New Year holiday period amid several localised COVID-19 outbreaks.
- Russia’s domestic traffic, by contrast, rose 5.5 percent compared to January 2019, a turnaround from the 12.0 percent year-to-year decline in December versus the same month in 2019. It was driven by a fall in COVID-19 cases since a peak late in December and by national holidays in the first week of the month.
IATA said January 2021 data for global air cargo markets showed that air cargo demand returned to pre-COVID levels (January 2019) for the first time since the onset of the crisis. January demand also showed strong month-to-month growth over December 2020 levels. Because 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 January 2019 which followed a normal demand pattern. Global demand, measured in cargo tonne-kilometres (CTKs), was up 1.1 percent compared to January 2019 and up 3 percent compared to December 2020. All regions saw month-on-month improvement in air cargo demand, and North America and Africa were the strongest performers. The recovery in global capacity, measured in available cargo tonne-kilometres (ACTKs), was reversed owing to new capacity cuts on the passenger side. Capacity shrank 19.5 percent compared to January 2019 and fell 5 percent compared to December 2020, the first monthly decline since April 2020.
Download the IATA January Cargo Market Analysis here.
“Air cargo traffic is back to pre-crisis levels and that is some much-needed good news for the global economy,” IATA’s de Juniac said. “But while there is a strong demand to ship goods, our ability is capped by the shortage of belly capacity normally provided by passenger aircraft. That should be a sign to governments that they need to share their plans for restart so that the industry has clarity in terms of how soon more capacity can be brought online. In normal times, a third of world trade by value moves by air. This high value commerce is vital to helping restore COVID damaged economies—not to mention the critical role air cargo is playing in distributing lifesaving vaccines that must continue for the foreseeable future.”
January Regional Performance
- Asia-Pacific airlines saw demand for international air cargo fall 3.2 percent in January 2021 compared to the same month in 2019. This was an improvement from the 4.0 percent fall in December 2020. International capacity remained constrained in the region, down 27 percent versus January 2019, which was a deterioration compared to the 26.2 percent year-over-year decline recorded in December. The region’s airlines reported the highest international load factor at 74 percent.
- North American carriers posted an 8.5 percent increase in international demand in January compared to January 2019, far surpassing the 4.4 percent gain in December 2020 compared to December 2019. Economic activity in the US continues to recover and its January manufacturing PMIs reached a record-high, pointing to a supportive business environment for air cargo. International capacity fell by 8.5 percent compared to January 2019. In December 2020, capacity was down 12.8 percent versus the same month in 2019.
- European carriers’ international cargo demand slipped 0.6 percent in January compared to same month in 2019. This was an improvement from the 5.6 percent fall in December 2020 over the year-ago period. International capacity decreased 19.5 percent, a deterioration from the 18.4 percent year-to-year decline recorded for December.
- Middle Eastern carriers posted a 6.0 percent rise in international cargo volumes in January versus January 2019, which was an acceleration over the 2.4 percent year over year gain recorded in December compared to December 2019. Of the region’s key international routes, Middle East-Asia and Middle East-North America have provided the most significant support. January capacity was down 17.3 percent compared to the same month in 2019. This was a slight reduction compared to the18.2 percent decline recorded in December 2020 compared to the year-ago period.
- Latin American carriers reported a decline of 16.1 percent in international cargo volumes in January compared to the 2019 period, which was an improvement from the 19.0 percent fall in December 2020 versus a year ago. Drivers of air cargo demand in Latin America remain relatively less supportive than in the other regions. International capacity decreased 37.0 percent compared January 2019, largely unchanged from the 36.7 percent year-over- year decline recorded in December 2020.
- African airlines’ cargo demand soared 22.4 percent compared to the same month in 2019, eclipsing the 6.3 percent year-over-year increase for December 2020. Robust expansion on the Asia-Africa trade lanes contributed to the strong growth. January international capacity decreased by 9.1 percent compared to January 2019, reduced compared to the 17.8 percent capacity decline recorded in December 2020 versus December 2019.