The main trade body for global airlines said this week that international passenger demand in July remained “critically low” while air cargo demand was “relatively stable” but remained at levels below the same month in 2019 due to the COVID-19 pandemic. The International Air Transport Association (IATA) said passenger demand in July measured in revenue passenger kilometres or RPKs, was 79.8 percent below July 2019 levels. This was somewhat better than the 86.6 percent year-over-year decline recorded in June, primarily driven by domestic markets, most notably Russia and China. Markets reopening in the Schengen Area in Europe helped boost international demand there, but other international markets showed little change from June. Capacity was 70.1 percent below 2019 levels and load factor sagged to a record low for July, at 57.9 percent, IATA reported.
“The crisis in demand continued with little respite in July. With essentially four in five air travellers staying home, the industry remains largely paralysed. Governments reopening and then closing borders or removing and then re-imposing quarantines does not give many consumers confidence to make travel plans, nor airlines to rebuild schedules,” said Alexandre de Juniac, IATA’s director general and CEO.
Download the IATA passenger report here.
July international passenger demand collapsed 91.9 percent compared to July 2019, a slight improvement over the 96.8 percent decline recorded in June. Capacity plummeted 85.2 percent, and load factor sank 38.9 percentage points to 46.4 percent.
- European carriers’ July demand toppled 87.1 percent compared to last year, improved from a 96.7 percent drop in June, year-over-year, reflecting relaxation of travel restrictions in the Schengen Area. Capacity dropped 79.2 percent and load factor fell by 33.8 percentage points to 55.1 percent.
- Asia-Pacific airlines’ July traffic dived 96.5 percent compared to the year-ago period, virtually unchanged from a 97.1 percent drop in June, and the steepest contraction among regions. Capacity fell 91.7 percent and load factor shrank 47.3 percentage points to 35.3 percent.
- Middle Eastern airlines posted a 93.3 percent traffic decline for July, compared with a 96.1 percent demand drop in June. Capacity tumbled 85.6 percent, and load factor sank 43.4 percentage points to 38.0 percent.
- North American carriers saw a 94.5 percent traffic decline in July, a slight uptick from a 97.1 percent decline in June. Capacity fell 86.1 percent, and load factor dropped 53.0 percentage points to 35.0 percent, second lowest among regions.
- Latin American airlines experienced a 95.0 percent demand drop in July, compared to the same month last year, versus a 96.6 percent drop in June. Capacity fell 92.6 percent and load factor sank 27.1 percentage points to 58.4 percent, highest among the regions.
- African airlines’ traffic dropped 94.6 percent in July, somewhat improved from a 97.8 percent contraction in June. Capacity contracted 84.6 percent, and load factor fell 47.1 percentage points to 25.4 percent, which was the lowest among regions.
July air cargo demand stable
IATA reported July air cargo demand was stable but at lower levels than 2019. While there is some month-to-month improvement, it was at a slower pace than some of the traditional leading indicators would suggest. This is due to the capacity constraint from the loss of available belly cargo space as passenger aircraft remain parked. Global demand, measured in cargo tonne-kilometres fell by 13.5 percent in July (-15.5 percent for international operations) compared to the previous year. That is a modest improvement from the 16.6 percent year-on-year drop recorded in June. Seasonally-adjusted demand grew by 2.6 percent month-on-month in July.
Download the IATA cargo report here.
Global capacity, measured in available cargo tonne-kilometres (ACTKs), shrank by 31.2 percent in July (‑32.9 percent for international operations) compared to the previous year. This is a small improvement from the 33.4 percent year-on-year drop in June. Belly capacity for international air cargo shrank by 70.5 percent in July compared to the previous year owing to the withdrawal of passenger services amid the COVID-19 pandemic. This was partially offset by a 28.8 percent increase in capacity through expanded use of freighter aircraft. “Economic indicators are improving, but we have not yet seen that fully reflected in growing air cargo shipments. That said, air cargo is much stronger than the passenger side of the business. And one of our biggest challenges remains accommodating demand with severely reduced capacity. If borders remain closed, travel curtailed and passenger fleets grounded, the ability of air cargo to keep the global economy moving will be challenged,” said IATA’s de Juniac.
- Asia-Pacific airlines saw demand for international air cargo fall by 15.3 percent in July 2020 compared to the same period a year earlier. After a robust initial recovery in May, month-on-month growth seasonally-adjusted demand has softened. International capacity decreased 32.0 percent.
- North American carriers reported a single digit fall in international cargo demand of 5.4 percent year-on-year in July. The stronger performance is due in part to strong demand on the transpacific, Asia-North America route, reflecting e-commerce demand for products manufactured in Asia. International capacity decreased 30.9 percent.
- European carriers reported a 22.4 percent annual drop in international cargo volumes in July. This was a slight improvement from June’s performance of -27.6 percent. Demand on most key trade lanes to / from the region remained weak. The large Europe–Asia market was down 20 percent year-on-year in July. International capacity decreased 37.4 percent.
- Middle Eastern carriers reported a decline of 14.9 percent in year-on-year international cargo volumes in July, an improvement from the 19 percent fall in June. Seasonally-adjusted demand grew 7.2 percent month-on-month in July–the strongest of all regions. This recovery was driven by the aggressive operational strategies of some of the region’s carriers. International capacity decreased 27.1 percent, the most resilient of all regions.
- Latin American carriers posted a 32.1 percent drop in year-on-year international demand in July, down from a 28.6 percent decline in June. International capacity decreased 44.5 percent. The drop in both demand and capacity was the most severe of all regions. The COVID-19 crisis is particularly challenging at present for airlines based in Latin America owing to strict lock-down measures. In July the Latin American air cargo market was smaller than the African market for the first time since these statistics have been reported in 1990.
- African airlines posted a contraction of 3.0 percent in July. This was down from a 3.8 percent increase in demand in June. The small Africa-Asia market continued to support the region’s performance. International capacity decreased 33.7 percent.
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