The International Air Transport Association (IATA) announced that passenger demand in September remained highly depressed as a result of the COVID-19 pandemic and the resulting border closures and quarantines. Total demand (measured in revenue passenger kilometres or RPKs) was 72.8 percent below September 2019 levels and only slightly improved over the 75.2 percent year-to-year decline recorded in August. Capacity was down 63 percent compared to a year ago and load factor fell 21.8 percentage points to 60.1 percent, IATA said in a media call on 4 November.
International passenger demand in September plunged 88.8 percent compared to September 2019, basically unchanged from the 88.5 percent decline recorded in August. Capacity plummeted 78.9 percent, and load factor withered 38.2 percentage points to 43.5 percent. Domestic demand in September was down 43.3 percent compared to the previous year, improved from a 50.7 percent decline in August. Compared to 2019, capacity fell 33.3 percent and the load factor dropped 12.4 percentage points to 69.9 percent.
Listen to the IATA media call here.
Download the IATA September Market Analysis here.
Download the IATA September media presentation here.
“We have hit a wall in the industry’s recovery,” said Alexandre de Juniac, IATA’s director general and CEO. A resurgence in COVID-19 outbreaks, particularly in Europe and the US, combined with governments’ reliance on the blunt instrument of quarantine in the absence of globally aligned testing regimes, has halted momentum toward re-opening borders to travel. Although domestic markets are doing better, this is primarily owing to improvements in China and Russia. And domestic traffic represents just a bit more than a third of total traffic, so it is not enough to sustain a general recovery.
“Last week we provided analysis showing that the airline industry cannot slash costs fast enough to compensate for the collapse in passenger demand brought about by COVID-19 and government border closures and quarantines,” de Juniac said. “Some 4.8 million aviation-sector jobs are imperilled, as are a total of 46 million people in the broader economy whose jobs are supported by aviation. To avoid this economic catastrophe, governments need to align on testing as a way to open borders and enable travel without quarantine; and provide further relief measures to sustain the industry through the dark winter ahead. A broader economic recovery is only possible through the connectivity provided by aviation,” said de Juniac.
- European carriers’ September demand collapsed 82.5 percent versus a year ago, which was a setback compared to an 80.5 percent decline in August. Europe was the only region to see a deterioration in traffic compared to August, owing to renewed infections that led to a wave of border closings. Capacity contracted 70.7 percent and load factor fell by 35.1 percentage points to 51.8 percent.
- Asia-Pacific airlines’ September traffic sank 95.8 percent compared to the year-ago period, virtually unchanged from a 96.2 percent drop in August. The region continued to suffer from the steepest fall in traffic as flight restrictions have remained stringent with little re-opening of borders. Capacity plummeted 89.6 percent and load factor shrank 46.8 percentage points to 31.7 percent, the lowest among regions.
- Middle Eastern airlines posted a 90.2 percent traffic decline for September, improved from a 92.3 percent demand drop in August. Capacity tumbled 78.5 percent, and load factor sank 40.9 percentage points to 34.4 percent.
- North American carriers saw a 91.3 percent traffic decline in September, a slight improvement from a 92.0 percent decline in August. Capacity toppled 78.3 percent, and load factor dropped 49.8 percentage points to 33.4 percent.
- Latin American airlines faced a 92.2 percent demand drop in September, compared to the same month last year, versus a 93.4 percent decline in August versus August 2019. Capacity dived 87.9 percent and load factor dropped 29.3 percentage points to 53.3 percent, highest among the regions.
- African airlines’ traffic sank 88.5 percent in September, barely budged from an 88.7 percent drop in August. Capacity contracted 74.7 percent, and load factor fell 39.4 percentage points to 32.6 percent, which was the second lowest among regions.
CARGO
IATA released September data for global air freight markets showing that air cargo demand, while strengthening, remains depressed compared to 2019 levels. Global demand, measured in cargo tonne-kilometres (CTKs), was 8 percent below previous-year levels in September (-9.9 percent for international operations). That is an improvement from the 12.1 percent year-on-year drop recorded in August. Month-on-month demand grew by 3.7 percent in September. Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 25.2 percent in September ( 28 percent for international operations) compared to the previous year. That is nearly three times larger than the contraction in demand, indicating a severe lack of capacity in the market. Strong regional variations are emerging with North American and African carriers reporting year-on-year gains in demand (+1.5 percent and +9.7 percent respectively), while all other regions remained in negative territory compared to a year earlier.
“Air cargo volumes are down on 2019, but they are a world apart from the extreme difficulties in the passenger business,” de Juniac said. “For air cargo, 92 percent of the business is still there, whereas about 90 percent of international passenger traffic has disappeared. Favourable indicators for the peak year-end season will support the continued recovery in demand. Already North American and African carriers are reporting demand gains on 2019. The challenge continues to be on capacity. As carriers adjust schedules to reflect falling passenger demand amid the resurgence of COVID-19, valuable belly capacity will be lost when it is needed the most.”
- Asia-Pacific airlines saw demand for international air cargo fall 14.6 percent in September 2020 compared to the same month a year earlier. This was an improvement from the 16.4 percent fall in August 2020. Demand on routes between Asia–North America and Asia–Africa were strongest. International capacity remained constrained in the region, down 32 percent, despite airlines adding more capacity on many routes.
- North American carriers returned to pre-crisis levels, posting a 1.5 percent increase in international demand compared to the previous year—the first month of growth in 10 months. This strong performance was driven by the Asia-North America routes, reflecting e-commerce demand for products manufactured in Asia. The region’s domestic market also performed robustly. International capacity decreased by 19.7 percent.
- European carriers reported a decrease in demand of 15.7 percent compared to the previous year. Improvements have been slight but consistent amid recovering economic activity and increasing exports, however, all major routes remained in contractionary territory. International capacity decreased 32.8 percent.
- Middle Eastern carriers reported a decline of 2.5 percent in year-on-year international cargo volumes in September, a significant improvement from the 6.7 percent fall in August. The region was one of the most severely affected by COVID-19. However, due to regional airlines aggressively adding capacity following the peak of the crisis, it has seen a sharp V-shaped recovery. International capacity decreased by 23.5 percent.
- Latin American carriers reported a decline of 22.2 percent compared to the previous year. The region’s weak performance is owing to a severe slowdown in economic activity including trade, rather than insufficient cargo capacity. International capacity decreased 32.2 percent.
- African airlines saw demand increase by 9.7 percent year-on-year in September. This was the fifth consecutive month in which the region posted the strongest increase in international demand. Investment flows along the Africa-Asia route continue to drive the regional outcomes. International capacity decreased by 24.9 percent.
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